[key points of investment]
The size of the connector market benefits from the strong demand in downstream applications and is expected to continue to grow. The connector is the electronic basic component to realize the power, signal transmission and exchange of electronic equipment. According to bishop & Associates, the global connector Market in 2021 was US $77.99 billion, with a year-on-year increase of 24.3%. In 2021, the size of China’s connector market was US $24.978 billion, with a year-on-year increase of 23.8%, ranking first in the world. With the development of automobile electrification and intelligence, the continuous promotion of global 5g communication, computer and data center construction, and the demand in aerospace, rail transit and other fields, the connector market scale is expected to continue to grow.
Electric and intelligent vehicles are one of the biggest highlights, and domestic connector manufacturers are expected to benefit directly. With the development of China’s manufacturing industry, especially taking the opportunities of technological iteration in the field of communication, the rise of new forces of China Shanxi Guoxin Energy Corporation Limited(600617) automobile manufacturing, and the transfer of electronic manufacturing service capacity, local enterprises in China’s communication, automobile, consumer electronics and other industries are rising rapidly. With the advantages of strong process control and cost control ability, price advantage, closer to customers and rapid and flexible response, Chinese connector manufacturing enterprises have rapidly formed large-scale, and have strong market competitiveness in manufacturing cost and product quality. We believe that the development of electric and intelligent vehicles and the continuous improvement of the market share of domestic automobile brands are very similar to the continuous improvement of smartphone penetration and the market share of domestic smartphone brands in the past. Review the development history of domestic consumer electronic parts manufacturers. Domestic parts manufacturers, represented by connectors, which promote the development of automobile electrification and intelligence, are expected to continue to benefit.
[configuration suggestions]
The core path to increase the share of domestic brand products is the continuous improvement of product performance and the recognition of suppliers by downstream customers. The R & D and manufacturing capabilities of domestic connector manufacturers continue to improve, and some performance parameters can be directly compared with overseas leading manufacturers such as tel.n and aph.n.
We believe that domestic connector manufacturers have more advantages in rapid response and customer service. Under the background of continuous improvement of downstream domestic market share, especially under the development trend of automobile electrification and intelligence, domestic connector manufacturers are expected to benefit directly. Be cautious about Electric Connector Technology Co.Ltd(300679) ( Electric Connector Technology Co.Ltd(300679) ), Suzhou Recodeal Interconnect System Co.Ltd(688800) ( Suzhou Recodeal Interconnect System Co.Ltd(688800) ), Zhejiang Yonggui Electric Equipment Co.Ltd(300351) ( Zhejiang Yonggui Electric Equipment Co.Ltd(300351) ). It is suggested to pay attention to Avic Jonhon Optronic Technology Co.Ltd(002179) ( Avic Jonhon Optronic Technology Co.Ltd(002179) )
[risk tips]
Downstream market demand is lower than expected
Upstream raw material prices rise
