Huanxu Electronics (601231): Multi-product strategy calms and iterates to consolidate the leading position of SIP technology

Huanxu Electronics (601231): Multi-product strategy calms and iterates to consolidate the leading position of SIP technology

Investment highlights: Annual report: 2018 revenue of 335.

500 million, an annual growth of 12.

94%; Net profit attributable to shareholders of listed companies.

800,000 yuan, compared with December 2017.

1.4 billion, down 10 a year.

21%; net profit attributable to shareholders of listed companies in place of non-recurring gains and losses11.

94 ppm, a 10-year increase of 10.


  Benefiting from the multi-product strategy, in the fourth quarter of 2018, revenue and net profit rose consecutively from the previous month, and the consumer electronics industry chain stood out.

Affected by factors such as exchange rate fluctuations, rising material costs, and inadequate operating rates during the off-season, the average operating profit and net profit attributable to mothers decreased by 30% in the first half of 2018.

In 2018, the revenue of Huanxu Electronics was the highest in September, and then in October, the revenue in November decreased slightly from the previous month, and it increased by 1% in December to reverse the decline.

2018Q4 operating income was 114.

40,000 yuan, an increase of 19 in ten years.

83%, an increase of 22 from the previous month.

08%, net profit attributable to mother 4.

0 million yuan, deducting non-net profit 4.


The products that have significant effects during the off-peak season are mainly Apple Communication Modules and Apple Watch SiP Modules, which account for less than 50% of revenue. The multi-product strategy reduces quarterly volatility.

  From Apple Watch to Airpods, Universal has benefited from the trend of miniaturization of high-end wearables.

The Apple Watch 4 has increased heart rate sensing and fall detection around the previous generation, and continues to advance intelligently.

In 2017, 17.66 million were watched, and in 2018, it is expected to increase by more than 52% in advance.

Due to the increase of the ECG detection function of the new generation of products, the compact package has been improved, and the increase in product value has also benefited Universal Asahi Electronics.

With the miniaturization of the Airpods design, Global Asahi Electronics continues to participate in the Airpods Sip module manufacturing.

Huanxu Electronics will occupy a major share of Apple’s two most successful wearable products.

  Deepen the multi-industry chain and layout.

The company’s European, American, and domestic joint ventures are in the capacity reserve period, and the global layout strategy is clear. It is expected that the market service capacity will be further improved gradually in the coming year to gain more market share.

1) Cooperate with consumer electronics customers to establish new production lines.

2) In February 2019, a dual joint venture agreement with Qualcomm’s subsidiary plans to invest in a joint venture in Brazil to develop and manufacture SiP module products with all-in-one functions, replacing smartphones, the Internet of Things and other related equipment.

3) Zhongke Hongtai Electronics Co., Ltd., a joint venture with Zhongke Shuguang, was registered and established in Kunshan in March 2019, and is committed to producing secure and controllable server products.

4) For industrial products, establish a production base near Mexico to serve new customers.

5) Automotive electronics, the company has existing bases in the Americas and Asia, and builds bases in Europe to better serve local customers.

In August 2018, a wholly owned Sun company acquired the target company located 上海夜网论坛 in Poland.




, To quickly improve the EMS factory layout.

6) Shenzhen and Kunshan expanded production to serve non-SiP customers.

  Revise down earnings forecast and maintain overweight rating.
2018 revenue and net profit were basically in line with expectations.

Based on the changes in the product structure in 2018 and lowering the non-recurring profit forecast, the net profit forecast for mothers will be from 14 in 2019/2020.

100 million points down to 14.


3 trillion, new revenue forecast of 580 trillion in 2021, net profit forecast of 18.

300 million.

The current sustainable development is 24 times PE in 2019. We are optimistic about the development of the company’s SiP packaging business and the improvement of profitability.