Red Weekly | Xiong Ying
Whether it is for mobile phone brands or mobile phone parts suppliers, it is particularly important to seize market share. Since 2022, due to various reasons such as economic downturn and repeated epidemics, the mobile phone consumption market has been sluggish and mobile phone shipments have dropped significantly. This impact has also been transmitted to the upstream of the industrial chain. During the interim report season, many mobile phone suppliers such as Qiuti Technology said that due to the drag of mobile phone business, the company's performance has been affected to varying degrees.
On September 6, Huawei launched the Huawei Mate50 series products; two days later, in the early morning of September 8, Beijing time, Apple is also expected to launch its own iPhone 14 series products. Apple and Huawei are connected to each other on the front, and they are full of gunpowder.
Industry insiders analyzed that the release of new products has a significant impact on the differentiation of the Android and Apple's industrial chains, and Apple's new phones are expected to drive the performance of Apple's supply chain; but since Android phones still have a lot of inventory, it will further affect the performance of enterprises in the industrial chain. But the folding screen becomes a clear stream of mobile phone parts.
Android and Apple's industrial chain differentiation:
Apple's new phone is expected to drive fruit chain performance
For September, welcoming Huawei and Apple's new product launch conferences. Wit Display chief analyst said that the impact of new product releases on Apple and Android industry chains is polarized.
"Apple's new phones are expected to drive the performance of Apple's supply chain. Although the mobile phone market is in a downturn, Apple is the least affected mobile phone manufacturer, and is eroding the mid-to-high-end share of the Android mobile phone market. The release of Apple's new phones will drive the shipment of components such as cameras and panels, and the performance of related companies will also be boosted." Linzhi told "Red Weekly".
According to CINNO Research data, in the first half of this year, the sales of smartphones in the Chinese market were about 134 million units, a year-on-year decrease of 16.9%, setting the worst sales performance in the first half of the year since 2015. In addition, the sales of OPPO and vivo both declined by more than 20%, while Apple only fell by 2.9%.
So, why do the industry think that Apple’s new phone release will be expected to drive the performance growth of fruit chains?
According to foreign media reports, Apple is expected to produce a total of about 220 million iPhones in 2022, which is consistent with the production volume in 2021. Tianfeng International analyst , Kuo Mingchi also posted on overseas Internet platforms that channel vendors and scalpers in mainland China are currently very optimistic about Apple's upcoming iPhone 14 series mobile phones, and believe that their demand in the market will exceed Apple's previous generation products.
Linzhi used cameras as an example to analyze to "Red Weekly" that the mobile phone market is sluggish this year, and Android mobile phone manufacturers have slowed down their camera upgrades, and the mid- and low-end models have basically not increased, and even the number of cameras has been reduced. On the contrary, Apple further upgrades mobile cameras and continues to increase the number, so the main increase in the camera market in the mobile phone industry chain will come from Apple.
Apple mobile phone lens supplier Daliguang Chairman Lin Enping previously said that benefiting from the new model's delivery, August will be better than July's revenue.
. In contrast, in the Android phone market, Linzhi said that Android phones have a huge (market) size, but the Android phone market has not improved significantly, and there is still a lot of inventory, which will further affect the performance of enterprises in the industrial chain, and the subsequent performance will continue to be sluggish.
For example, mobile phone brand companies listed on Hong Kong stock in the second quarter "clear inventory" through price cuts and other means, but the inventory is still high. The company's management stated that for inventory provisions, the company will strictly follow the accounting standards of International Financial Reporting Standards , and long-term inventory will make provisions for long-tail products. The company's overseas market inventory was relatively high in the second quarter, and inflation led to a decrease in consumption capacity in overseas markets, and there was also the impact of foreign exchange rates.
Mobile phone industry observer Li Ze (pseudonym), told Red Weekly, "It often takes a certain period of time to transmit from downstream changes to the upstream of the supply chain. Generally speaking, it will be reflected within half a year." This also means that the high inventory of mobile phone manufacturers will continue to affect all links in the supply chain in the second half of the year.
Mobile phone supply business performance in the first half of the year generally decreased
folding screen shipments may be expected to become a new growth point
However, it cannot be ignored that judging from the interim results of major mobile phone parts suppliers in the first half of this year, they have been significantly impacted by the mobile phone business.
For example, in the first half of the year, Sunny Optical Technology achieved operating income of 16.972 billion yuan, a year-on-year decrease of 14.4%; and achieved net profit attributable to shareholders of 1.358 billion yuan, a year-on-year decrease of 49.5%. The decline in mobile phone business is the main reason for the decline in performance. In the first half of 2022, mobile phone-related products contributed 12.756 billion yuan of the company's revenue, accounting for 75.16% of the total revenue, a year-on-year decline of nearly 20%. Sunny Optical Technology also stated in its semi-annual report that the weak demand for smartphone market and the decline in configuration of smartphone cameras have led to a year-on-year decline in the company's mobile phone lenses and mobile phone camera module shipments, and has increased the pressure on average sales prices.
In addition, mobile phone suppliers such as Weil Co., Ltd. and Qiuti Technology also declined in the first half of the year; while mobile phone suppliers such as OFILM , Helitai, and Xinlun New Materials were even more severely affected, and showed a loss in the first half of the year (see the attached table).
However, in the near future, Sunny Optical Technology's performance may be expected to usher in a turning point. The company said in the matter of supplying lenses for the iPhone series, "Communication with the 'North American Big Customers' is progressing smoothly and we have begun to initially participate in the new mobile phone order."
. According to Mingchi Kuo, Sunny Optics' high-order wide-angle 7P lens (used for two high-order iPhone 14 Pro) and lower-order wide-angle 7P lens (used for two lower-order iPhone 14) have shipments of 50%-60% and 55%-65% respectively. It is not difficult to see that Sunny Optics has become the largest supplier of 7P lenses for iPhone14 series wide-angle cameras, and its supply proportion has significantly surpassed Daliguang and Yujingguang.
It is worth mentioning that in the context of the decline in domestic and foreign mobile phone sales demand in the first half of this year, the performance of mobile phone supply business still grew rapidly.
Furong Technology interim report shows that its operating income in the first half of this year was 1.143 billion yuan, a year-on-year increase of 47.2%; its net profit attributable to shareholders was 240 million yuan, a year-on-year increase of 87.2%. The reason why the company's performance has achieved counter-trend growth is partly due to its core customers, high-end models such as Samsung S series and folding series, and the company's aluminum structural parts sales increased by 27.5% year-on-year.
In the mobile phone market where it is going on a "downhill" road, the folding screen is indeed a clear stream. Statistics released by CINNO Research show that the cumulative sales of foldable screens in the domestic market in the first half of this year reached 1.3 million units, exceeding the 1.16 million units of the year last year.
CICC also pointed out that 2022 will usher in the "first year of folding screens" for real-scale shipments, and folding screen mobile phones will usher in explosive growth. According to the latest forecast of Counterpoint Research, the global foldable smartphone market will grow by 73% this year from 9 million units last year to 16 million units.
layout camera and other automotive parts field
"second curve" offsets the negative impact of the mobile phone market
Li Ze told Red Weekly that in the short term, it is difficult to make a breakthrough in the mobile phone market shipment volume, and the smartphone industry will inevitably face a new round of market adjustment period. He predicts that it may take 3 to 5 years to usher in the next round of recovery in mobile phone shipments.
Linzhi told Red Weekly that the stagnation of mobile phone shipments over a long period of time will cause a certain degree of valuation of the mobile phone industry chain, which also requires the company to find new growth points. Mobile phone parts suppliers have also begun to transform to non-mobile phone businesses, such as automotive business, VR, AR business, Internet of Things business, etc.
Affected by the new energy vehicle boom, mobile phone suppliers' transformation into their automobile business has also attracted the attention of many investors. "Red Weekly" found that many investors asked mobile phone suppliers such as Visinox and OFILM for the latest progress in the automotive industry. Research institutions also expressed their optimism about mobile phone suppliers' layout in the automotive field. Puyin International's research report pointed out that under the leadership of China's new energy vehicle market, global new energy vehicle sales will still show relatively strong growth in 2022. The demand for car camera will also rise.Keep confident that car cameras take over smartphones to drive industry growth.
But there are also different voices in the market. For example, Qiu Boyuan, fund manager of Nanjing Kangzhuang Asset Management Co., Ltd., pointed out to Red Weekly that although you can feel that mobile phone suppliers are accelerating their layout in the field of new energy vehicle parts, this will not change the development trajectory of the mobile phone industry chain companies.
Qiu Boyuan takes cameras as an example. The shipment of smartphones in 2022 is expected to be 1.3 billion units, but the annual passenger car shipment of the same period is expected to be 100 million units. Judging from the penetration rate of new energy vehicles, , the world only accounts for 20%, which is 20 million units, which shows that the market space is relatively limited.
In addition, Qiu Boyuan also pointed out that some spare parts on smart cars may not be taken away by mobile phone suppliers. Automobile assembly plants have their own standards when selecting spare parts. Specifically, they may not pay attention to mobile phone suppliers, but if a company originally supplied goods to foreign-funded car companies, or has already supplied goods to other mainstream domestic brand car companies, it can be favored by new OEMs. It is not difficult to see that for mobile phone suppliers who have just entered the field of new energy vehicle parts, seizing the market still faces many challenges.
However, judging from the performance of many mobile phone suppliers, mobile phone suppliers that have earlier deployed other automotive businesses have seized the initiative.
For example, Ofilm, whose performance plummeted due to the delisting of fruit chains. The interim report pointed out that smart car products contributed 596 million yuan of OFILM's revenue in the first half of the year, and the revenue share of smart car products increased from 3.53% in the same period last year to 7.66% in the first half of this year. At the same time, Ofilm has also set a "small goal" to strive to achieve industry-leading revenue scale of smart car business by 2025.
In addition, Hongruan Technology's intelligent driving and other IOTs contributed 26.4097 million yuan in the first half of this year, an increase of 102.51% year-on-year, of which the front-mounted revenue was 7.0756 million yuan (including one-time project costs). The company's intelligent driving front-mounted business is on the eve of revenue increase.
(This article has been published in "Red Weekly" on September 3. The article mentions stocks for example analysis only and does not make trading suggestions.)
