In October 2021, the electronic industry maintained rapid growth. From January to October, the added value of electronic information manufacturing industry above designated size increased by 16.5% year-on-year, 0.3 percentage points lower than that in the first three quarters. In October, the added value of electronic information manufacturing industry above designated size increased by 14.0% year-on-year, and the growth rate increased by 10.5 percentage points over the same period of last year.
Semiconductors: optimistic about investment opportunities in equipment, materials and automotive chips. Benefiting from domestic substitution, China’s semiconductors are expected to maintain rapid growth: according to SIA statistics, China’s semiconductor sales in October 2021 were US $16.77 billion, a year-on-year increase of 21.1% and a month on month increase of 0.3%. Global semiconductor manufacturers will start building 19 new high-capacity wafer factories by the end of this year and start building another 10 in 2022, thus driving the demand for semiconductor equipment and materials. In addition, the penetration of smart cars has accelerated, and L3 has ushered in commercialization. We are optimistic about investment opportunities related to automotive chips.
Consumer electronics: oppo and Huawei have released folding screen mobile phones, and the cost performance has been continuously improved. The folding mobile phone market has undergone more than two years of technical iteration: the folding mode, design, materials and operating system have been continuously tested and optimized, which has basically met the use needs of consumers; In terms of price, with the continuous participation of market players and the reduction of technical cost, the price of folding screen mobile phones has dropped from 15000-20000 yuan to about 8000 yuan, and the cost performance has increased significantly. Folding screen mobile phones have entered the popularization stage, and the market will usher in a rapid outbreak period. It is suggested to pay attention to the leading enterprises in relevant industrial chains..
VraR: oculus Christmas sales, VR business process accelerated. During Christmas, meta’s virtual reality application oculus reached the top, reflecting oculus’s hot sales during Christmas. In 2021, new VR products appeared frequently, and some VR devices have met the needs of users in immersion, interaction and man-machine design. With the rapid growth of VR ecology, consumer VR equipment will enter a period of rapid penetration. According to omdia’s prediction, by 2025, the number of VR active users will exceed 45 million, and the number of consumer VR devices is expected to increase to 45 million. With the launch of new VR terminals, VR commercialization will accelerate, and the leading enterprises in the emerging field of forward-looking VR / Ar are expected to benefit first.
Investment suggestion: driven by the strong demand for 5g terminals and automobile electrification, the profit side of the electronics industry is expected to maintain rapid growth. At present, the valuation level of the electronics industry is close to the medium and long-term negative standard deviation level, and there is still much room for improvement to maintain the “recommended” rating. Semiconductor maintains a high prosperity. It is recommended to pay attention to image sensor leader Will Semiconductor Co.Ltd.Shanghai(603501) (603501. SH), vehicle specification semiconductor leading enterprise Wingtech Technology Co.Ltd(600745) (600745. SH), wafer OEM enterprise Semiconductor Manufacturing International Corporation(688981) (0981. HK), etc. For consumer electronics, it is recommended to pay attention to VR leading manufacturer Goertek Inc(002241) (002241. SZ) and precision manufacturing leading Luxshare Precision Industry Co.Ltd(002475) (002475. SZ). The LED industry has entered a new business cycle. It is recommended to pay attention to the LED chip leader Sanan Optoelectronics Co.Ltd(600703) (600703. SH), the downstream display leader Leyard Optoelectronic Co.Ltd(300296) (300296. SZ), and the Chinese led solid crystal machine leader Shenzhen Xinyichang Technology Co.Ltd(688383) (688383. SH).
