Brokerage Morning Meeting Highlights | The future of PCB will be more similar to semiconductor, and the value will steadily increase.

Yesterday, the market hit bottom and rebounded, with a total turnover of 1.78 trillion yuan in the Shanghai and Shenzhen markets, a decrease of 125.4 billion yuan compared to the previous trading day. In terms of sectors, Hainan, precious metals, retail and other sectors led the gains, while diamond cultivation, banks, and silicon sectors led the declines. At the close of trading yesterday, the Shanghai Composite Index fell by 0.23%, the Shenzhen Component Index rose by 0.29%, and the Growth Enterprise Index fell by 0.02%. At today's morning meeting of securities firms, CICC pointed out that the Federal Reserve may hold steady in January, with the next rate cut possibly in March; China Securities Co.,Ltd. believes that in the future, PCB will become more similar to semiconductors, with the value steadily increasing; Galaxy Securities stated that the expectation of a price increase in tinplate cans is sufficient, and industry value regression is anticipated. CICC: Federal Reserve may hold steady in January, next rate cut possibly in March CICC pointed out that as expected, the Fed cut interest rates by 25 basis points at the December meeting, but the number of officials opposing the rate cut has increased to two, indicating that the threshold for further rate cuts is rising. At the same time, Powell's statements are not strong, and the Fed's announcement of starting short-term Treasury bill purchases has helped alleviate market concerns. The previously fully priced-in "hawkish rate cut" expectations have reversed, intensifying market volatility. Looking ahead, considering the downward pressure on the economy and employment, it is expected that the Fed will continue to cut rates in 2026; but considering the persistence of inflation, the pace of rate cuts is slowing. It may hold steady in January, with the next rate cut possibly in March. China Securities Co.,Ltd.: PCB will become more similar to semiconductors in the future, value steadily increasing China Securities Co.,Ltd. believes that with the demand for HDI backplanes and Cowop process upgrades, PCB will become more similar to semiconductors in the future, with the value steadily increasing. Secondly, Amazon, META, Google and other self-designed chip capabilities are weaker than NVIDIA, so they have higher requirements for materials such as PCB and more elastic value. As the requirements for short-distance data transmission continue to increase, PCB continues to upgrade, driving upstream upgrades in the industry chain, with copper-clad laminates upgrading from M6/M7 to M8/M9. With the continuous increase in the global market share of domestic PCB companies, and driving the domestication of upstream industry chains, starting from copper-clad laminates, it further increases the domestic share of high-end resins, fiberglass cloth, copper foil, and others. Galaxy Securities: Expectation of tinplate can price increase sufficient, anticipating industry value regression Galaxy Securities stated that the domestic competition pattern of tinplate cans is optimized, and the profit center is expected to move up: By 2023, the market size of tinplate cans in China will reach 44.7 billion yuan, with a compound annual growth rate of 8.3% from 2018 to 2023, and the market size is expected to reach 77.6 billion yuan by 2030. The capacity situation and downstream demand of the tinplate packaging industry will directly determine the industry average price trend. 1) The digestion of industry capacity is highly related to the industry average price. 2) Market concentration directly determines the industry's pricing ability and profitability. Compared to overseas tinplate can markets, the competition pattern in the Chinese market is relatively decentralized before 2025, and there is an oversupply situation. From 2024 to 2025, the industry capacity will enter a digestion stage, with the completion of the acquisition of COFCO PACKAGING by ORG Technology, the industry's competition pattern will be further optimized, with the top 3 companies accounting for over 70% market share, with a unified demand for profit restoration among the leading companies, in 2026, the pricing for downstream customers such as beer and carbonated beverages is expected to increase, driving industry profitability improvement and value regression. This article is reprinted from "Cai Lianshe", GMTEight editor: Xu Wenqiang.