[Shenwan Hongyuan Home Appliances/Machinery] Continue Strongly Recommending Minbao Optoelectronics: Up 6% Today, Capacity Expansion Steadily Progressing, Average Shipment Price Continues to Rise

English summary

Xiazhi expansion pace: #July expansion to 25 million units, subsequent expansion speed increases month by month, year-end monthly capacity expected to break 50 million units, #by end of 27 over 100 million units (equipment side has made over-expected reserve), expected 27 shipments over 800 million units. Product structure: current drill bit shipments mainly 25-30x diameter (max 63x), #July average shipment price close to 1.7 yuan, year-end expected to exceed 2 yuan; H2 expected 30-40x diameter shipment proportion greatly increase, average shipment price also significantly grow, #current order gross margin over 50% (25 year gross margin about 30%). Currently, #has made significant progress in micro-drill super wear-resistant coating technology for new substrates such as M9/M10, downstream customer feedback good, company has prepared mass production capability in advance. Valuation at low position with high cost-performance. Currently dragged by external sentiment in PCB sector, valuation at low level, company fundamentals have not changed significantly, #corresponding 27 year PE about 18x, with high cost-performance.