Tianfeng International’s latest survey shows that due to the negative impacts of traffic control, self-isolation and mask shortages after the pneumonia outbreak, the resumption rate of major CCM suppliers of Chinese mobile phone brands will generally be low after starting work on

micronet news (text/holly), today (5th), Tianfeng International analyst Ming-Chi Kuo released the latest forecast. He said: Chinese Android brand lens suppliers will face three major potential risks in the first half of this year.

The three potential risks are:

(1) The resumption rate of major module manufacturers (CCM) after starting work on February 10

(2) The demand for Chinese Android brands is lower than expected

(3) Potential price competition

It is reported that Ming-Chi Kuo The basis for judging the trend of China's Android mobile phone brand lens manufacturers is Largan's fundamental changes, because the company is a leading manufacturer in terms of technological advantages, customer coverage and market share.

According to his speculation, Largan's Q1 and first half of 2020 revenue and profits may be significantly lower than market estimates. The above three risks may reduce Largan's shipments and capacity utilization and have a negative impact on the company's revenue and profitability. It is estimated that Largan's 2020 Q1 revenue will decline by 45–50% (vs. market consensus decline of 25–30%).

He also analyzed the above three potential risks in detail:

CCM’s low resumption rate after the start of construction on February 10th will pose a severe challenge to Largan in Q1 2020 . Tianfeng International’s latest survey shows that due to the negative impacts of traffic control, self-isolation and mask shortages after the pneumonia outbreak, the resumption rate of major CCM suppliers of Chinese mobile phone brands will generally be low after starting work on February 10, including Lijing (35–45%), Sunny Optical (30–40%), OFILM (45–55%) and Qiu Titanium (30–40%).

The demand for mobile phones in the Chinese market is lower than expected, which is Largan's challenge to in Q1 and Q2 of 2020. Ming-Chi Kuo pointed out in a previous report that mobile phone shipments in the Chinese market fell by approximately 50–60% during the 2020 Spring Festival. In addition, according to surveys, before the outbreak of the pneumonia, Largan's orders for Chinese Android mobile phone brands had been reduced by 20-25%. After the outbreak of the pneumonia, due to the sharp decline in online and offline mobile phone sales, Largan is expected to have China's Android mobile phone sales in the Q1 quarter of 2020. Brand orders will eventually be reduced by 40–50%.

Potential price competition will be detrimental to Largan and the overall profitability of the lens industry.. Based on past experience, when demand for mobile phone lenses begins to decline, Largan will start a price war to obtain more orders to increase production capacity utilization. Largan is advantageous in winning orders due to its cost advantage, but it is detrimental to the overall profitability of Largan and the lens industry.

In addition, judging from the changes in Largan's fundamentals, Chinese Android brand lens suppliers will face severe challenges in the first half of this year. Sunny Optical, AAC Technology, Xingjuyu, Yujingguang, Xinjuke and Sekonix included.

(proofread/Jurnan)