The demand for consumer electronics slows down, and the folding screen may lead innovation to break through the bottleneck of mobile phone sales: affected by the weakening effect of the housing economy, the impact of the rebound of the epidemic on both sides of supply and demand, the return of funds caused by the Federal Reserve’s interest rate hike, international tensions, and entering the traditional off-season, the shipment of smart phones continues to decline. In 2022q1, the global shipment of smart phones was 314 million units (yoy-9.09%); In March, China shipped 21.46 million smartphones (yoy-39.15%); In April, China produced 96.14 million smartphones (yoy-3.8%). Folding screen may lead innovation to break through the bottleneck of mobile phone sales. On April 11, vivo released its first folding screen mobile phone xfold, and on April 28, Huawei released its fifth folding screen mobile phone matexs2. The price dropped below 10000 yuan, which is conducive to the improvement of the penetration rate of folding screen models. DSCC predicts that Google will also enter the folding screen market, and its folding screen mobile phone will be mass produced in 22q3.
In April, the consumer electronics index fell by 11.5% and rebounded after hitting the bottom on the 26th: in April 22, the CSI 300 index rose by – 4.89%, the electronics (CITIC) index rose by – 13.22%, the consumer electronics (CITIC) index rose by – 11.5%, the consumer electronics components (CITIC) index rose by – 10.29% and the consumer electronics equipment (CITIC) index rose by – 20.52%. Since the beginning of the year (as of May 13), the CSI 300 index has risen – 19.27%, the electronics (CITIC) index has risen – 33.39%, the consumer electronics (CITIC) index has risen – 37.25%, the consumer electronics components (CITIC) index has risen – 36.58%, and the consumer electronic equipment (CITIC) index has risen – 42.58%. In April, among the constituent stocks of the consumer electronics (CITIC) index, 5 rose positively and 84 rose negatively; Since the beginning of the year, there has been one positive increase and 88 negative increase. In April, the top three net purchases of land stock connect were Lianchuang Electronic Technology Co.Ltd(002036) (146 million yuan), Sunwoda Electronic Co.Ltd(300207) (114 million yuan), Ofilm Group Co.Ltd(002456) (78 million yuan), and the top three net sales were Luxshare Precision Industry Co.Ltd(002475) (1076 million yuan), Goertek Inc(002241) (623 million yuan), Electric Connector Technology Co.Ltd(300679) (210 million yuan). We believe that with the control of the epidemic, the previously suppressed consumption can be gradually released, and the consumer electronics boom is expected to pick up.
The valuation is at a historical low, and the PE percentile in the past 10 years is 5.10%: as of May 17, the PE of the consumer electronics (Shenwan) index is 27.68 times, and the PE percentile in the past 10 years is 5.10%. The consumer electronics sector is in a historically undervalued range.
Investment suggestion: recommend Goertek Inc(002241) , Dongguan Aohai Technology Co.Ltd(002993) , Sunwoda Electronic Co.Ltd(300207) , and pay attention to Dbg Technology Co.Ltd(300735) , sunny optical technology (Hong Kong stock) with high degree of downstream demand certainty; Upstream chips Will Semiconductor Co.Ltd.Shanghai(603501) , Bestechnic (Shanghai) Co.Ltd(688608) , Sg Micro Corp(300661) , etc. are recommended.
Risk warning: downstream demand is less than expected; Risk of rising raw materials and transportation costs; The risk of recurrent outbreaks.
