Dongshan Precision: IC carrier board project equipment is undergoing commissioning

On March 31, Suzhou Dongshan Precision Manufacturing Co., Ltd.(stock code: 002384, stock abbreviation: Dongshan Precision) held its first extraordinary shareholders 'meeting in 2023 to discuss the "Proposal on Providing Guarantees for Financing of Subsidiaries to Banks and Other Financial Institutions" was reviewed and voted on, and Aijiwei participated in the shareholders' meeting as its institutional shareholder.

Guarantees for two subsidiaries

Dongshan Precision was listed on the Shenzhen Stock Exchange in 2010 and its current business covers three major sectors: electronic circuits, optoelectronic displays and precision manufacturing. In recent years, Dongshan Precision has actively explored new tracks in the new energy vehicle industry and built an industrial development pattern with consumer electronics and new energy vehicles as the core.

In March this year, Dongshan Precision announced that it plans to provide new guarantees with a total amount of no more than RMB 700 million for financing to banks and other financial institutions for subsidiaries Chaowei Microelectronics (Yancheng) Co., Ltd. and Yancheng Dongchuang Precision Manufacturing Co., Ltd.

The announcement shows that the previous guarantee amount of Chaowei Microelectronics (Yancheng) Co., Ltd. was 600 million yuan, and this time an additional 200 million yuan was added, with a total guarantee amount of 800 million yuan. The previous guarantee amount of Yancheng Dongchuang Precision Manufacturing Co., Ltd. was 00,000 yuan (the object of this new guarantee), and the guarantee amount was 500 million yuan this time, with a total guarantee amount of 500 million yuan.

Yancheng Dongchuang Precision's main business includes the manufacturing and sales of automobile parts and accessories, general equipment, communication equipment, etc. Chaowei Microelectronics's main business includes the manufacturing and sales of electronic components, power electronic components, electronic products, etc.

Chaowei Microelectronics has an IC carrier board project under construction. Official news from Yancheng in February showed that the project has a total investment of 5 billion yuan, a registered capital of 100 million US dollars for the first phase, and 1000 sets of advanced equipment such as laser drilling have been newly installed. Completed and put into operation in the second quarter of this year. After the first phase of the project is put into operation and reaches efficiency, it can produce an annual output of 100,000 square meters of FCBGA and FCCSP IC carrier boards and 750,000 square meters of ultra-fine circuit boards.

At the meeting, Dongshan Precision's Secretary of the Board of Directors said that the IC carrier board project has not yet been put into production and the equipment is being put into operation for debugging.

Seize the opportunity of new energy vehicles

In December 2022, Dongshan Precision announced that it expects the company's net profit this year to be approximately 2.33 billion yuan to 2.43 billion yuan, an increase of 25.10% to 30.47% over the same period last year. The reasons for the change in performance are mainly based on two points: the revenue and profits of the electronic circuit business in the core industry have achieved stable growth; the new energy and automobile business have been solidly advanced, new products and new customers have been introduced smoothly, and revenue and profits have increased significantly.

The electronic circuit business is the cornerstone of Dongshan Precision, and its business structure has been improved and optimized through multiple mergers and acquisitions. In 2016, it completed the acquisition of 100% equity of MFLX Company and added FPC products; in 2018, it completed the acquisition of Multek, filling its business gap in the field of rigid printed circuit boards.

At present, according to the customization needs of different downstream terminal products, Dongshan Precision can provide one-stop solutions covering the design, research and development, and manufacturing of electronic circuit (PCB) products. The products are widely used in mobile phones, computers, ARVR, wearable devices, servers, communication equipment, new energy vehicles, industrial control equipment, etc. In terms of performance, electronic circuit products account for a large proportion of Dongshan Precision's operating income in the medium to long term. Taking the first half of 2022 as an example, electronic circuit products accounted for 62.21% of operating revenue.

Currently, many PCB companies plan to build factories in Southeast Asia and other places. Dongshan Precision said at the meeting: The company currently has no plans to build factories in Southeast Asia. quot;

In fact, in recent years, Dongshan Precision has maintained great enthusiasm for new energy business.

Dongshan Precision said at the meeting that the company's consumer electronics currently accounts for a large proportion. Although the automobile business accounts for a small proportion, the prospects are good. The company is also stepping up its layout to strengthen the automobile business. Dongshan Precision pointed out that compared with traditional vehicles, new energy vehicles are new things, product structures are constantly innovating, and the entire industrial system is in an open state.

In this regard, Dongshan Precision also regards new energy vehicles as an important driving force and continues to increase the number. For example, it and its wholly-owned subsidiary Suzhou City Yongchuang Metal Technology Co., Ltd. established a company in Shanghai to develop Dongshan Precision's new products and services in fields such as smart new energy vehicles; established a subsidiary in Mexico to further consolidate and enhance cooperation with North America. Cooperation with customers in new energy vehicles and energy storage and other industries; established a wholly-owned subsidiary in Kunshan City, Jiangsu Province to better get close to new energy vehicle customers and their Tier One manufacturers and shorten the transportation radius of large products; Acquired Aranda, AutoTechUS, and AutoTechMexico overseas through wholly-owned subsidiaries.

In addition, Dongshan Precision also acquired a 100% stake in Suzhou Jingduan.

Dongshan Precision said on the investor interaction platform that it is currently actively deploying base construction in Lingang (Shanghai), Kunshan (Suzhou) and Mexico. The future product plan of the Kunshan factory is mainly for stamping parts for new energy vehicles. The planned production time of the Mexican factory is in the second quarter of this year, and the construction of the Shanghai Lingang factory has not yet started.

In addition, the Dongshan Precision Conference revealed that the Kunshan base is expected to be put into production this year.