Fenghua Hi-Tech: Equipment for projects under construction has been deployed in advance and will not affect delivery

Recently, Fenghua High-Tech stated in an institutional survey that the main equipment of the company's projects under construction have been deployed in advance according to the project schedule. There are currently no supply difficulties and it will not affect delivery.

As for how to face market competition after the expansion, Fenghua Hi-Tech believes that the company's main product, electronic components, as basic products of the electronic information industry, has a very broad market development space. First, with the high-frequency, intelligent and high-end development of electronic application terminals, the market demand for the number of components of downstream terminal products such as automotive electronics, industrial control, 5G communications, the Internet of Things, new energy and emerging industries will continue to increase; second, my country is still the world's largest electronic product manufacturing center and component application market, and the company's product scale still has huge development space and opportunities relative to market demand; third, the electronic information industry is a strategic emerging industry that the country supports. The country has clearly stated that by 2025, the self-guarantee rate of core basic parts (components) and key basic materials must reach 70%. The Ministry of Industry and Information Technology has issued the "Basic Electronic Components Industry Development Action Plan (2021-2023)", and plans to strive for 15 companies to exceed 10 billion yuan in revenue by 2023. The continued increase in national policy support will further promote the rapid development of the industry.

In recent years, the company and its domestic and foreign counterparts have been actively expanding production. This is because of the long-term optimism about the industry's development track. The company will seize market opportunities, continuously improve the technical level of its products, accelerate the introduction of the company's products in high-end application fields and high-end customers, and continuously increase the market share of the company's products.

Regarding the Xianghe project, Fenghua Hi-Tech said that the application areas of the Xianghe project products cover base stations, mobile phones, smart wearables, industrial control, automotive electronics and other fields. During the specific implementation of the project, the company will continue to optimize the product structure in combination with market changes and further increase the proportion of high value-added products. With the release of the capacity of the Xianghe project, the proportion of the company's high-capacity products will gradually increase.

It is reported that the company's electronic materials mainly include electronic paste, ceramic powder, precious metal powder, etc. The electronic materials used in the company's MLCC products include self-produced and purchased. In recent years, the company has continued to increase its investment in the field of electronic materials, improve the company's electronic material technology and production capacity, and maintain a good and stable cooperative relationship with domestic and foreign electronic material suppliers.

In terms of R&D, Fenghua Hi-Tech said that it will accelerate the construction of reliability testing and analysis centers and high-end pilot platforms based on key laboratories, focus on improving the main business technology and quality, and conduct in-depth research on core technologies such as high performance, miniaturization, high frequency and integration of resistors, capacitors and inductors to form high-end new products with high capacitance, high frequency, high current and high reliability. The proportion of R&D investment in operating income has increased from 3.87% in 2018 to more than 5%. In the future, the company will continue to increase R&D investment to provide strong support for the company's high-end product breakthroughs.

Fenghua High-Tech pointed out that the company has a relatively complete industrial chain. The company's main products, such as MLCC and chip resistors, have a complete range of specifications. It has the ability and solutions to provide overall supporting and one-stop procurement services to global customers. The comprehensive supporting capability is also one of the company's core competitiveness.