Overall performance of the sector: the sector as a whole maintained a high boom, and the net profit increased in 2021. In terms of annual performance, among the 223 companies related to performance given by the electronics industry, 166 enterprises achieved year-on-year growth in net profit, accounting for 74.4%. In terms of performance in the fourth quarter, 142 enterprises achieved positive year-on-year growth in 21q4 profit, accounting for 63.68%. Affected by the covid-19 epidemic, the global foundry capacity is tight, especially the shortage of mature process chips such as power management chips and drive ICs is the most serious, and the product price continues to rise; On the other hand, emerging fields such as automotive electronics, miniled and metauniverse have contributed incremental to the industry, and the domestic substitution process in the fields of superimposed integrated circuits, power semiconductors and passive components has been continuously promoted, driving the performance of the electronics industry to achieve year-on-year growth.
Segment performance: 1) consumer electronics: the net profit attributable to the parent company in 2021 decreased year-on-year, mainly due to the saturation of smartphone penetration on the demand side, the shortage of chip production capacity on the supply side, the rise of raw material prices, and the lack of innovation in the industry. With the active expansion of some wafer foundries, the problem of lack of core and material is expected to be alleviated. With the rapid penetration of emerging applications such as AR / VR, the profitability of the sector is expected to be repaired; 2) Semiconductor: the net profit of 2021 and 2021q4 achieved year-on-year high growth. On the one hand, in the first half of the year, due to the structural mismatch between supply and demand caused by strong downstream demand and limited upstream supply, the shortage and price rise in all links continued, and the industry maintained a high boom; On the other hand, the promotion of domestic substitution has accelerated. Driven by the expansion of Chinese wafer factories, the domestic substitution of semiconductor equipment / materials has accelerated, boosting the performance of listed companies; 3) PCB: the global economy is recovering from the impact of the epidemic. The traditional demand of PCB enterprises has warmed up. Driven by emerging demand such as automotive electronics, miniled and AR / VR, the net profit of Chinese PCB enterprises has increased year-on-year in 2021. After entering Q3, the rise in raw material prices has eased, superimposing the cost pressure of some enterprises to the downstream, so the profit side growth rate has recovered; 4) Passive components: the net profit of the whole year of 2021 and the fourth quarter of 2021 achieved year-on-year growth, and the industry as a whole was at a high level of prosperity. On the one hand, the increased penetration of new energy vehicles and 5g terminals boosted the industry demand. On the other hand, the new input capacity of China’s leading passive components enterprises was released step by step, promoting the acceleration of domestic substitution of key components, which also brought profit increment to the industry; 5) Panel: in the first three quarters of 2021, the revenue and net profit attributable to the parent company hit a record high, mainly because the price of LCD panel continued to rise from 19q3; Starting from 21q3, terminal TV and laptop shipments weakened, and panel prices fell rapidly, but still higher than the same period last year. Therefore, the net profit of 21q4 still increased year-on-year, but fell more month on month; 6) Led: in 2021, the demand for LED products recovered rapidly, while the rapid penetration of emerging technologies such as miniled promoted the strong recovery of LED performance and led the sector to achieve year-on-year rapid growth in 2021. After entering Q3, the prices of upstream drive IC and other parts have warmed up, the cost pressure of downstream led enterprises has slowed down, and the performance has further increased; The net profit of segment 21q4 is negative, which is mainly due to the large amount of asset impairment accrued by Shenzhen Mason Technologies Co.Ltd(002654) , Shenzhen Changfang Group Co.Ltd(300301) and other enterprises.
Investment advice: maintain the recommended rating. From the performance forecast of 2021, the prosperity degree of each sub sector of the electronic industry is quite differentiated, among which the sub sectors such as consumer electronics, display panel and LED driven IC are sluggish, while the prosperity degree of sub sectors such as power semiconductor, automotive electronics and semiconductor equipment / materials is relatively high. In terms of investment direction, it is suggested to grasp two main lines: one is the industry increment brought by power semiconductor, automotive electronics and AR / VR, and the other is the domestic substitution opportunities in key fields such as semiconductor equipment and materials under the tide of wafer factory construction.
Risk tip: domestic substitution is less than expected, and the prosperity of the industry has fallen, etc.
