Industry status: No. 1 in mainland China and No. 2 in the world
GDSY CCL Technology Group is the largest CCL manufacturer in Mainland China and the second in the world. The world's largest CCL manufacturer is HKJT CCL Technology Group.
GDSY's main business structure: copper clad laminate accounts for over 70% and PCB over 20%
According to data in 2019, GDSY copper clad laminates accounted for more than 70% of its operating income and PCB operating income accounted for more than 20%. Copper clad laminates and PCBs are the company's two main businesses.
Profitability continues to improve, gross profit margin and return on net assets rank first in the industry
From 2015 to 2019, GDSY's profitability continued to improve, with gross profit margin increasing from 18.8% to 26.6%, net profit margin from 7.3% to 11.8%, and return on net assets from 12% to 19%.
Competitive advantages of the company: strong management capabilities, business cyclical decline
The company's net profit attributable to the parent company in 2013 increased by 72% year-on-year, far higher than the 4% of the industry leader HKJT Group, mainly due to the countercyclical growth brought about by the optimization of GDSY's internal management. From 2018 to 2019, the cycle of the copper clad laminate industry has declined, and the superimposed sweaters and other factors have led to a sharp decline in demand. However, the company has maintained a stable business through the detailed management of management, sales, production and other links. The cyclical trend reflects the company's strong ability to resist cyclical fluctuations, which is an important competitive advantage of the company.
The driving factors of the company's future development (development logic)
1. The global copper clad laminate market will maintain a growth rate of 5.7%-10.7% in the next five years. The company's market share has room for improvement
The global copper clad laminate industry will maintain a growth rate of 5.7%-10.7% in the next five years, and the overall market size will continue to expand in the future. In addition, GDSY's market share has increased from the previous single digits to 12%, and there is room for improvement in the future. The agency predicts that the future market share is expected to increase to 15% to 20%. The expanding CCL market size overlaps the company's market share. The increase in the rate will help the company's continuous growth.
2. The localization rate of high-frequency and high-speed copper clad laminates is extremely low, and there is a large domestic substitute space in the future
High-frequency and high-speed copper clad laminates are the fastest growing area of fine molecules. In 2018, the global sales of special and special resin-based copper clad laminates were US$2.962 billion, a year-on-year growth rate of 31.7%, an increase of 15.3% from 2017, and high-frequency and high-speed products The proportion of sales increased from 18.5% in 2017 to 23.9% in 2018. It can be seen that the growth rate of high-frequency and high-speed copper clad laminates is rapid and accelerating.
High frequency and high speed copper clad laminates are monopolized by American and Japanese manufacturers. GDSY has been certified by Huawei
High-frequency copper clad laminates are mainly divided into polytetrafluoroethylene (PTFE) and hydrocarbon copper clad laminates according to the material. The production process of high-frequency laminates is complex, the material and processing certification cycle is long, special formulas are required, and there is a very high barrier to entry. Monopolized by American and Japanese manufacturers, Rogers, Park, Isola of the United States and ZTE Chemicals of Japan have a global market share of up to 90% and are in a monopoly position.
GDSY breaks the monopoly of the United States and Japan. GDSY has a technical foundation in three varieties of hydrocarbon, PTFE, and thermosetting materials. In 2017, the company and Japan Zhongxing Chemical reached a PTFE technology transfer agreement to obtain a complete formula, production process, equipment technology, raw material manufacturer information, etc. GDSY has been able to produce high frequency copper clad laminates of PTFE and hydrocarbons. Some of the company's high-end products can be benchmarked against Rogers' corresponding products in performance.
Some products of GDSY have some gaps with Rogers, but the gap is not too big. The performance of GDSY's PTFE products has reached the top level in the world, and the performance of high-frequency and high-speed copper clad laminates produced by GDSY is comparable to Rogers's high-frequency and high-speed boards. The company's products have been certified by important customers such as Huawei.
GDSY has been able to stably produce and supply high frequency copper clad laminates. In August 2019, GDSY has been able to produce 60,000 to 80,000 square meters of high frequency copper clad laminates per month. The GDSY high frequency copper clad laminate project currently plans to produce 1.5 million per year. In November 2018, the first phase of the plant was successfully trial-produced, with a planned production capacity of 1 million square meters per year, and a planned production capacity of 500,000 for the second phase. The second phase is under construction.
GDSY has formed a barrier to competition in the field of high-frequency copper clad laminates. Looking at the country, GDSY is currently the only manufacturer in the field of high-frequency copper clad laminates that can meet customer needs in terms of production capacity and technology. It is not only technologically leading, but also far in terms of production capacity. Far ahead of other domestic manufacturers.
High-frequency copper clad laminates will gradually be replaced by domestic products due to external factors. GDSY is the domestic leader
The localization rate of high-frequency and high-speed copper clad laminates is extremely low, and due to supply chain security considerations, more companies will choose domestic suppliers in the future, and there is broad room for domestic substitution. In addition, GDSY, the leading domestic high-end copper clad laminate in China, has been able to produce high-frequency and high-speed copper clad laminates. Domestic customers have very few high-frequency and high-speed copper clad laminate suppliers. It is difficult to find other domestic high-frequency and high-speed copper clad laminate manufacturers in the short term. Technology is expected to share the huge dividend of domestic substitution of high-frequency and high-speed copper clad laminates.