News_News_Jiangxi Weigao Electronics Co., Ltd | ENIG PCB

Wilco: ROE is higher than the industry average and profitability is outstanding, gradually exploring emerging fields such as automotive electronics

Reprinted from: Jin Jiyan- Welgao: ROE is higher than the industry average and profitability is outstanding. Gradually open up emerging fields such as automotive electronics (https://www.jinjiresearch.com/?p=11955) "Jin Jiyan" Senhai/Author Yang Qi Chaofeng/Editor and Reviewer In recent years, driven by factors such as intelligence and low-carbonization, PCB (printed circuit board) downstream application industries such as 5G communications, cloud computing, smartphones, smart cars, and new energy vehicles have flourished, driving the continued growth of PCB demand. The main business of Jiangxi Welgo Electronics Co., Ltd. (hereinafter referred to as "Welgo") is the R&D, production and sales of printed circuit boards. Its products include double-sided boards and multi-layer boards. The product types cover thick copper plates and Mini LED optoelectronics. boards, planar transformer boards, etc. The products are used in industrial control, display, consumer electronics, communication equipment and other fields. Affected by the active optimization of product structure, Welgo's revenue has declined slightly in recent years, but its net profit has increased steadily and its gross profit margin has increased. By the third quarter of 2023, Welgao’s revenue and net profit will both increase year-on-year. At the same time, Will's weighted average ROE is higher than the industry average, with outstanding profitability and obvious investment value. Welgo continues to increase investment in research and development and enhance its technological innovation capabilities, and its process capabilities are superior to the industry's technical level. After years of accumulation, Welgo has strong competitive advantages in product performance, quality, delivery time and customer service, and has accumulated high-quality customer resources. At present, Welgo is gradually exploring emerging fields such as automotive electronics to lay a solid foundation for performance growth. 1. Net profit increased by 22.08% year-on-year from January to September 2023, with ROE higher than the industry average and outstanding profitability. Printed circuit boards have a wide range of downstream industries, including industrial control, communications, computers, consumer electronics, automotive electronics, network equipment, military aviation, medical equipment, etc. The wide application distribution provides huge market space for the printed circuit board industry and reduces the risks of PCB industry development. In the long term, the overall PCB market demand in various application fields shows a growth trend. As a manufacturer of single-sided, double-sided and multi-layer circuit boards, Welgo's main business is the R&D, production and sales of printed circuit boards. In recent years, Welgo has seized market opportunities and continuously improved its operating performance and profitability. From 2020 to 2022, Welgo's operating income was 524 million yuan, 861 million yuan, and 837 million yuan respectively, with an average annual CAGR of 26.35%; net profits were 49.0224 million yuan, 61.5903 million yuan, and 87.2677 million yuan respectively, with an average annual CAGR of 26.35%. is 33.42%. According to Welgo's 2023 third quarter report data, from January to September 2023, Welgo achieved operating income of 601 million yuan, a year-on-year decrease of 3.74%; net profit was 76.8932 million yuan, a year-on-year increase of 22.08%. Among them, Weigao achieved operating income of 200 million yuan in the third quarter, a year-on-year increase of 8.98%, and its revenue resumed a growth trend; its net profit was 25.3403 million yuan, a year-on-year increase of 48.40%, and its net profit further improved. It should be noted that since 2022, Welgo's operating income has declined slightly mainly because it has implemented a business strategy of optimizing product structure in order to improve the gross profit margin and operating efficiency of its main business, prioritize orders with relatively high gross profit margins, and control Accept orders with lower gross profit margins. From 2020 to 2022 and from January to September 2023, Welgo's gross profit margins were 25.14%, 20.29%, 24.00%, and 24.20% respectively. ROE is an important indicator of a company's profitability and a key criterion for attracting shareholder investment. For listed companies, the higher the ROE, the higher the return to shareholders. In recent years, Welgo's weighted average return on equity has been higher than the industry average, and its profitability is outstanding. According to Oriental Fortune Choice data, from 2020 to 2022 and from January to September 2023, Welgo's weighted average ROE was 26.73%, 22.45%, 20.61%, and 15.12% respectively. During the same period, Welgo's comparable companies in the same industry were Shenghong Technology (Huizhou) Co., Ltd., Aoshicon Technology Co., Ltd. (hereinafter refe