Shangfeng Materials: Stock Price at Safety Margin, Bullish on BT Substrate Localization Trend, Suggest Positioning

English summary

The company's high point has retreated 45%, which we judge is due to short-term trading style. We believe the current stock price has reached a safety margin, and we are bullish on the BT substrate industry localization trend and the company's related business development. We suggest positioning at the current point. Bullish on BT substrate localization trend. Due to rising storage demand and technological iteration (substrate size enlargement), we are bullish on BT substrate demand growth. According to our statistics, Japanese and Taiwanese IC substrate companies' expansion is mainly focused on ABF, which is mainly for computing chip demand; Korean companies' expansion is relatively balanced, and their BT substrate expansion increment is mainly for Samsung and SK Hynix storage expansion. Therefore, we believe that from both national strategy and company operation perspectives, if mainland storage companies expand, the new non-mainland substrate supply they can obtain is overall limited, so mainland supply chains need to be cultivated. At the same time, due to the current substrate shortage, downstream industries are more open to validating mainland supply chains than before. Therefore, we are bullish on the BT substrate localization trend, and the company is expected to be one of the key beneficiaries. The company's IC substrate business has broad development space.…