中国-电气设备行业-中国激光：供应链的本地化

Disclosures & Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it. Issuer of report: HSBC Qianhai Securities Limited View HSBC Qianhai Securities at: https://www.research.hsbc.com Equity Research Report AsiamoneyBrokersPoll2020 | 1st Jun–7th AugClick here to vote  China’s laser industry is catching up in technology, enabling it to move away from imports and become self-reliant  We focus on two sub-sectors that are technologically strong and well positioned for pricing power and market share gains  Initiate on Raycus with a Buy; maintain Hold on Han’s Laser Against a backdrop of trade tensions and tariffs on technology imports, Chinese laser companies have been investing heavily in R&D to catch up with global leaders. The result is that, for the first time, they can produce lasers domestically, even some of the most powerful and advanced, and cut their reliance on imports. This sets them up well to adapt independently to the trend of rising complexity in manufacturing, especially in consumer electronics. In smartphones, for instance, the number of drill holes on a circuit board for a 4G phone is 800,000 – but it jumps to 1.2m for a 5G phone. Opportunity 1: We like laser equipment makers, as we expect rapid growth driven by the expansion of lasers into more industries. Competition has intensified, but we foresee consolidation in 2021e as the leading companies gain market share. We prefer those with extensive technical know-how, diversified product lines, and top-tier clients. Opportunity 2: The key component in laser equipment is the laser source, and we favour companies specialising in this segment given (1) high technical barriers for new entrants; (2) the tried and tested strategy of vertical integration to cut costs and improve the products; and (3) local winners have emerged after price competition. Raycus Laser, the second-biggest laser source provider in China in terms of market share, has strong in-house technology. We expect it to become the No. 1 supplier by 2022e, driven by technology advances, vertical integration, and capacity expansion. We forecast a 32% revenue CAGR over 2020-22e and use a mid-cycle average PS of 8.6x to reach our target price of RMB128.90, implying c27% upside. Potential catalysts: a rebound in orders, a stabilising laser source ASP, consensus earnings upward revisions, and government stimulus for Wuhan-based companies like Raycus. We believe Han’s Laser, a laser equipment vendor with the largest market share in China, can maintain its position based on its comprehensive technical know-how, extensive sales and service networks, reputable brand, and top-tier clients such as Apple. Though its 2020e earnings will be impaired by COVID-19, we believe robust printed circuit board (PCB) and mask machine orders should partly offset the impact. We maintain our Hold rating on the shares and raise our TP to R