Write above: Recently, Chinese connector industry enterprises have released the third quarter report of 2021. From the revenue and growth rate of 2021q1-q3, The revenue of Wenzhou Yihua Connector Co.Ltd(002897) / Electric Connector Technology Co.Ltd(300679) / Cwb Automotive Electronics Co.Ltd(605005) / Shenglan Technology Co.Ltd(300843) / Suzhou Recodeal Interconnect System Co.Ltd(688800) / Shanghai Laimu Electronics Co.Ltd(603633) / Dongguan Dingtong Precision Metal Co.Ltd(688668) / Zhixin Electronics was 3.069 billion yuan (+ 23.94%) / 2.432 billion yuan (+ 30.67%) / 1.011 billion yuan (+ 29.99%) / 940 million yuan (+ 61.62%) / 599 million yuan (+ 31.93%) / 491 million yuan (+ 34.52%) / 421 million yuan (+ 52.75%) / 346 million yuan (+ 45.00%). From the profit and growth rate of 2021q1-q3, the profits of Electric Connector Technology Co.Ltd(300679) / Cwb Automotive Electronics Co.Ltd(605005) / Dongguan Dingtong Precision Metal Co.Ltd(688668) / Zhixin electronics were 283 million yuan (+ 48.96%) / 154 million yuan (+ 30.92%) / 86.1811 million yuan (+ 59.35%) / 47.6749 million yuan respectively (+ 55.15%).
Overall overview: connector coverage is widely used. What is the future development trend? Connectors are electronic components that transmit and exchange current or optical signals between electronic system equipment. They are necessary for the modular design of complex products. It has been widely used in automobile, communication, computer and other consumer electronics, industry, transportation and other fields. Connectors in different application fields need to meet three basic performances: electrical performance, mechanical performance and environmental performance. Due to different application scenarios, the focus of functional characteristics and technical level is different. With the shift of world manufacturing to China, the focus of global connector production has also shifted to China. In 2019, the Chinese mainland connector market accounted for 30% of the world’s market share, and the largest connector sales and production base in the world. The top five application fields and their proportion of connectors are automobile (23.7%), communication (22.2%), consumer electronics (13.1%), industry (12.3%) and rail transit respectively (7.0%) The continuous growth of the industry market and the acceleration of product upgrading will promote the continuous improvement of the technical level of connector related companies and develop towards intelligence, high-speed and miniaturization.
Demand side: the production and sales of new energy vehicles increased by 1.8 times. How about the growth of the segment track? The prospect of connector market is obviously consistent with the development of downstream terminal application industry. The development of terminal application and strong demand in consumer market will directly promote the rapid growth of connector market. ① New energy vehicles: automobile is the largest segment of the connector industry. According to China industry information research network, the industry market scale is expected to exceed 10 billion yuan by 2024. The number of electric drive units and electrical equipment of new energy vehicles has increased greatly, and the internal power and information control are complex. In particular, the high current and high voltage electric drive system puts forward higher requirements for the reliability, volume and electrical performance of connectors, which means that the demand and quality requirements of new energy vehicles for connector products will be greatly increased, The value range of connectors for pure electric passenger vehicles is 3000-5000 yuan, and the value range of connectors for pure electric commercial vehicles is 8000-10000 yuan. With the rapid increase of Shanxi Guoxin Energy Corporation Limited(600617) automobile production, the connector market of new energy vehicles is developing rapidly. ② Consumer electronics: in the digital age, new technologies and products emerge one after another, consumer ideas and consumer demand keep pace with the times, and the demand for consumer electronics products continues to increase. In order to meet the dual needs of consumer electronic products for product performance and ultra-thin thickness, consumer electronic connectors will develop in the direction of diversification, miniaturization, multi-function, good electromagnetic compatibility, standardization and customization in the future.
Supply side: how about the growth ability and business level from the latest financial reports of nine companies? China’s connector market is developing rapidly. In many subdivided application fields, some local enterprises with high technical level and strong independent research and development ability have emerged. In the communication field, it mainly includes Electric Connector Technology Co.Ltd(300679) , Suzhou Recodeal Interconnect System Co.Ltd(688800) , Wenzhou Yihua Connector Co.Ltd(002897) , Dongguan Dingtong Precision Metal Co.Ltd(688668) . Its main products include micro RF connectors, high-speed connectors, cable connector components, etc. among them, the main customers of Electric Connector Technology Co.Ltd(300679) , Suzhou Recodeal Interconnect System Co.Ltd(688800) and Wenzhou Yihua Connector Co.Ltd(002897) include ZTE, Huawei and other smart phone enterprises. In the automotive (new energy / fuel) field, all nine companies include automotive connector business. Their main products are wired to board connector, wire to wire connector, power exchange connector assembly, high-speed data transmission harness connector and cable assembly. Their main customers include Volkswagen, BMW, great wall, Chang’an and other fuel vehicle manufacturers, Byd Company Limited(002594) , Weilai and other new energy vehicle manufacturers and automobile industry chain manufacturers such as Valeo group, United Electronics and Goethe group. In the field of consumer electronics, a total of Wenzhou Yihua Connector Co.Ltd(002897) , Shanghai Laimu Electronics Co.Ltd(603633) , Zhixin electronics, Shenglan Technology Co.Ltd(300843) , Shenzhen Deren Electronic Co.Ltd(002055) 5 companies participated in the competition. Their main products include I / O connectors, TF card connectors, SIM card connectors, etc. their terminal applications are mainly mobile phones and home appliances, and their customers include mobile phone brands and home appliance brands such as ZTE, Yulong Kupai, Hisense, TCL, Xiaomi, goer and Sony.
Risk tip: there is a risk of intensified industry competition, tight chip supply and rising raw material prices
