As China’s mobile phone terminal market gradually entered the peak sales season in the second quarter, many people in the industry believe that companies in the electronic industry chain are expected to have a better performance in the next few quarters.
In the financial report of the electronics industry in 2021, the trend of the strong and the strong has continued. However, with the influence of factors such as weak demand and continuous changes in the external environment, the development progress of mobile phone external business has become an important variable to support these companies to deal with consumption fluctuations.
Although Apple’s mobile phone continued its market share advantage in 2021, due to its temporary demand change for some wearable products (such as airplads), it still affected some performance of “fruit chain” company.
The manufacturers that have achieved the expansion of automobile business earlier are facing less performance pressure. For example, in the financial report of battery industry chain companies, both the gross profit margin and the proportion of revenue from automobile related businesses are rising significantly; However, due to the extremely low proportion of lens manufacturers from the automotive business, they have made little contribution to the improvement of performance.
Of course, the upstream of the industrial chain will be slightly affected by the terminal resonance. If only looking at the semiconductor and semiconductor material related industries, it will be found that the vast majority of such companies have achieved a fairly high growth rate of deducting non net profit in 2021, and this growth trend will continue to the first quarter of 2022.
According to the analysis of several executives of mobile phone companies to reporters, although the industry is continuously facing a development period of bottleneck, as one of the key entrances to smart life, mobile phone is still a necessity. However, in the follow-up development process, its manifestation may not be just mobile phones. AR / VR, smart watches, etc. will be the development direction of much attention, otherwise it will not attract the automotive industry to join.
From this point of view, the pan mobile phone industry will still be a good industry. For companies in it, it is more important to expand relevant diversified businesses. For example, transferring the technical capacity accumulated in the mobile phone industry chain to the smart car industry will also be a beneficial promotion and supplement to the original automobile supply chain.
significant performance differentiation
In the whole electronic industry chain, the head companies often have achieved relatively excellent performance growth. For example, BOE, Semiconductor Manufacturing International Corporation(688981) , and TCL have achieved year-on-year double growth in net profit deduction.
However, although the “fruit chain” company is one of the wind vanes of the industrial chain to some extent, in 2021, even the leading company has a relatively obvious performance of increasing income without increasing profit.
Lens Technology Co.Ltd(300433) 2021 deduction of non net profit decreased by 72.45%; However, the operating revenue was 45.268 billion yuan, a year-on-year increase of 22.55%. Although the revenue of its three major businesses increased year-on-year, the revenue of small and medium-sized appearance and functional components increased by about 30%.
However, the businesses with a large decline in gross profit margin were small and medium-sized appearance and functional components, down 10.27%, and the business of new materials and other products also fell 10.12%; On the contrary, the gross profit margin of large-size appearance and functional components decreased slightly by 1.09%.
Luxshare Precision Industry Co.Ltd(002475) similarly, the company achieved a 66.43% increase in revenue in 2021; However, net profit after deduction of non-profit decreased by 1.2%. In terms of specific businesses, although the revenue of consumer electronics business, which accounts for 87.46% of the revenue, increased by 64.56% year-on-year, the gross profit margin of this part decreased by 6.48% year-on-year.
Among other businesses, the fastest growing revenue is computer interconnection products and precision components, with a growth rate of 123.11%, but the revenue accounts for 5.1%; Automotive interconnection products and precision components that have attracted much attention now account for 2.69% of revenue, with a growth rate of 45.66%.
Some Hong Kong listed companies have made relatively detailed analysis of financial data. For example, the head companies in the field of optical lenses, SunYu optics and Qiu Ti technology, have talked about the reduction of distribution from end customers or the price reduction caused by competition among manufacturers, which has a certain impact on the company’s performance.
In this regard, Xu Jingjing, senior analyst of the innovation division of sigmaintell, analyzed to the reporter of the 21st Century Business Herald that the end customer reduction mentioned here refers to the reduction of the camera specification of the whole machine in the same series of iterations, not the change of the proportion of the price grade of the whole machine. “This downsizing action will affect that the average unit price of camera chip / lens / module in 2022 is lower than expected, and further affect the revenue level of relevant enterprises.”
She added that the downscaling action was a common case in the industry, which mainly came from the pressure brought by the rise of the overall cost of the whole machine, which prompted the suspension or downscaling of some unnecessary specification upgrades.
In contrast, battery industry chain companies have made more contributions to the business of electric vehicles, thus hedging the performance impact of mobile phone related businesses.
For example, the net profit of 3 Kairuide Holding Co.Ltd(002072) 021 increased by 14.18%, deducting the non net profit increased by 101.72%. Specifically, in terms of the proportion of revenue by products, electric vehicle batteries had the highest year-on-year growth, with a single revenue growth rate of 6.41%, and other businesses had a single revenue growth rate of less than 1%, of which mobile phone digital and notebook computers had a growth rate of about 0.5%; In addition, the revenue of intelligent hardware decreased by 8.05% year-on-year. Of course, the mobile phone digital category contributes 55% to the company’s revenue, and the high growth electric vehicle battery revenue accounts for 7.85%, which still has great room for growth.
In terms of gross profit margin, electric vehicle battery is still the single business with the highest growth in Sunwoda Electronic Co.Ltd(300207) year-on-year, with a year-on-year increase of 13.98%, but the base is low, which is – 0.87%; The gross profit margin of mobile digital category increased by only 0.15%, but it was the main support of gross profit margin, which was 18.39%; The gross profit margin of intelligent hardware and notebook computers fell slightly by less than 1%.
break through on the road
If the distribution of the electronic industry chain is more likely to be affected by the current environment, the overall distribution of the electronic industry chain will be more vulnerable. Actively diversify and introduce Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) into the terminal company as soon as possible.
Goertek Inc(002241) is undoubtedly an unusual part of the “fruit chain”. In 2021, the company achieved a year-on-year increase of 38.91% in net profit and 35.47% in revenue; It is estimated that the company’s net profit in the first half of this year will be reduced by 35% – 55% year-on-year.
In the recent performance exchange, executives of the company said that the good performance of the performance mainly comes from the rapid growth of VR. At present, VR products are very popular. At the same time, TWS smart headset and game console business are advancing normally, and we have seen beneficial growth.
Looking ahead, the company believes that there is still room for growth in the TWS market. Game console products officially entered mass production last year, with full orders, and the game console business has a long cycle and high stability.
Lingyi Itech (Guangdong) Company(002600) ‘s performance is showing the growth potential of automobile business other than mobile phones. In 2021, the company’s revenue increased by 7.97% year-on-year, but the deduction of non net profit decreased by 61.9%.
However, from the perspective of revenue composition, consumer electronics business accounted for 95.53% of the company’s revenue, with a year-on-year increase of 9.65%; The automobile business revenue, accounting for 1.46%, increased by 141.54% year-on-year. In terms of products, the revenue of charger and boutique assembly business also increased by 48.6% year-on-year.
Shenzhen Goodix Technology Co.Ltd(603160) executives also said in recent investor exchanges that the company’s current revenue still depends on a few products and mobile phone market. When the external situation leads to changes in the smart terminal market pattern and intensified market competition, it will affect the performance in 2021. In this regard, the company is reducing the risk of single market and customer dependence, and the application market is gradually expanding from mobile phones to new markets such as PC, wearable, IOT and automobile. We are also actively exploring the international market.
“The overall market of smart phones will not grow significantly in the future. It is normal to maintain the existing scale or even decline slightly. Therefore, to continue to grow in the mobile phone market, the company can no longer rely on a single product. We should continue to expand the application of more new products in mobile phones.” In addition to the previous ten years, many executives say that the demand for smart phones will be upgraded to the same field as that of cars in the next ten years.
Of course, in the first quarter of this year, although the mobile phone market is still under pressure, the performance of electronic industry chain companies is not completely unable to rebound. In fact, some companies have reversed in the financial reports released in the first quarter of this year. As China’s mobile terminal market gradually entered the peak sales season in the second quarter, many people in the industry believe that companies in the electronic industry chain are expected to have a better performance in the next few quarters.
Luxshare Precision Industry Co.Ltd(002475) financial report shows that the growth rate of the company’s revenue in the first quarter of 2022 is close to 98%, and the net profit deducted from non net profit increased by 30.56% year-on-year. The company said that the reason for the growth of revenue was the large growth of consumer electronics, computer interconnection products and precision components.
In addition, according to the analysis of China Merchants electronics team, the company’s performance in the first quarter benefited from the better performance of watch and automobile businesses. At the same time, the company’s mobile phone assembly business has turned into profit in the fourth quarter of last year. This year, the company evaluated the good performance of iPhone 13pro and added orders, resulting in performance exceeding the expected period.
In the face of the changing environment, Xu Jingjing told reporters that the changes facing Shanghai have little impact on the production of China’s mobile phone supply chain, mainly due to the extension of the logistics cycle. This is mainly because relevant industrial chain enterprises have made sufficient plans, such as arranging workers to settle in the factory in advance and point-to-point work mode, which can ensure the normal production of the factory.
“Considering the instability of the external environment, it is necessary to have a certain inventory, which needs to be implemented according to the actual situation of each company.” She added that there are two suggestions for supply chain manufacturers: first, strengthen diversified strategic cooperation with head customers and bundle sales of multiple parts; Second, continuously improve the competitiveness of their products and reasonably distribute production capacity.
