A major reason for the increase in commodity prices comes from the mismatch of global supply and demand during the period. With the increase in global vaccination rates, the constraints on supply will gradually disappear, and supply will gradually return to a level that can meet demand. Subsequent superimposition of the Fed's tightening of monetary policy As expected, we believe that the stage of rapid rise in commodities is coming to an end.

　　At the same time, the State Council recently proposed “highlight key comprehensive measures to protect the supply of bulk commodities, curb unreasonable price increases, and strive to prevent transmission to consumer prices”. A series of price stabilization measures are expected to be introduced, and the overall prices of bulk commodities are expected to fall.

　　In the manufacture of CCL, the cost mainly depends on the price of copper foil. Among them, the price of copper foil depends on the price change of LME copper, which is obviously affected by the bulk commodity market.

　　Therefore, when the rising tide of bulk commodities gradually subsides, CCL costs are expected to fall, and the profitability of the PCB industry is expected to gradually improve.

　　The concentration of the domestic PCB industry is expected to increase further in the post-era

　　From a global point of view, the trend of the global PCB industry concentrating on the mainland has not changed. On the contrary, due to China’s better control measures, China’s PCB output value in the global proportion has accelerated; from a domestic point of view, the increase in commodity prices in the first half of the year CCL prices have risen sharply, and some small and medium-sized enterprises are unable to absorb costs and are forced to suspend production. The concentration of the domestic PCB industry has shown a further trend of concentration.

　　In general, considering the changes in the global PCB competition pattern and domestic factors, the overall output value and pattern optimization of the domestic PCB industry are developing in a good direction, and the bargaining power relative to the upstream and downstream will also increase in the future.

　　21Q1 PCB company inventory hoarding is obvious, interim report performance release or exceed expectations

　　As the cost of upstream raw materials has risen a lot, most PCB companies in 21Q1 have shown obvious warehousing behavior to minimize the impact of rising costs. This is reflected in the sharp increase in inventory and the sharp decline in operating cash flow on the balance sheet.

　　From a financial point of view, in the output value released in 21Q2, its cost calculation adopts the first-in-first-out method. Therefore, its cost is calculated in 21Q1, which will be significantly lower than the actual cost of 21Q2. Therefore, PCB companies report performance release or exceed the market expected.