400 billion Consumer Electronics leaders investigated Apple's industrial chain has fallen. These three new tracks have become safe havens.

The consumer electronics sector suffered a sharp setback at the start of trading today, with most of the stocks floating green, and the overall decline of the plate was once more than 4%. Individual stocks, 400 billion "fruit chain" leader Lixun precision after the opening of trading by a large single sell-off is almost touched the limit, the highest market value evaporation of about 37 billion. As of press time, Lixun's share price rebounded, narrowing its decline to 4.33%, trading at 55 yuan, with a turnover of 7.879 billion and a turnover rate of 2.09%.

On the news side, according to the website of the Ministry of Commerce, on January 21, 2021, the United States International Trade Commission ((ITC)) decided to launch a 337 investigation into specific electrical connectors and cage assemblies and their products. Lixun Precision Industry Co., Ltd., Dongguan Lixun Precision Industry Co., Ltd.

There is a lot of bad news that Apple's industrial chain has been hammered one after another.

According to public data, the investigation actually began on December 18, 2020, when Amfino submitted an application to the US International Trade Commission, alleging that five companies, including Lixun Precision and its subsidiary Dongguan Lixun Precision, had infringed their patent rights by exporting, importing or selling specific electrical connectors and shells and their components and downstream products in the United States, and requested the US International Trade Commission to issue a limited exclusion order and prohibition order. In other words, after a month of process approval, the US International Trade Commission finally decided to launch the investigation.

In this regard, Lixun Precision has issued a statement on the investigation, the company said that a total of five US patents are involved in the investigation, involving conductive plastic technology and terminal horizontal injection molding technology, which are independently developed and designed by the company and used in high-speed external IO connector products. After a preliminary judgment, this 337 investigation will not have a substantial impact on the company's current production and operation.

It is worth noting that the consumer electronics sector was significantly weaker on Friday before today's collective slump. In the afternoon of January 21, there were rumors in the market that Oufeiguang would sell its factory in South China to Lixun Precision, causing the stock to hit the limit in late trading. Later, Lixun Precision responded: "the situation is not true." Ou Feiguang also said that it is not clear about the source of the news, and there is no such information at present.

But this did not reassure the market. Consumer electronics fell sharply when trading opened on January 22nd, with little resistance, falling by 3.73% in more than an hour. Since then, the decline has narrowed to 2.2% as the index picks up. During this period, a number of concept stocks collectively fell, Lance Technology dived down 9.37%, Sheng Hong Technology, Industrial Union, Gale shares, Lixun Precision and so on fell on the same day.

As of noon today, Ofeiguang shares fell 5.39% again to 11.24 yuan per share, a cumulative decline of 19.94% in the past three days. The share price has fallen by as much as 42% since it was reported in September 2020 that it will be kicked out of the "apple industry chain" news.

Data show that Ofeiguang's main business products include image modules, optical lenses, microelectronics and touch products. With the advantages of optical innovation and core customer advantages accumulated in the consumer electronics field, Ofeiguang has realized the upgrade from single-shot to dual-camera and multi-camera, and relies on the self-developed AA focusing process, high automation level of production line and large-scale production capacity. It has become the mainstream supplier of duplex and multi-camera modules in the industry, and the shipments of camera modules rank first in the world.

In addition, Lance Technology, another core stock in the sector, fell more than 13% in intraday trading on Friday, closing down 9.3%, compared with 199 billion yuan closed on January 21, and lost 18.5 billion yuan in one trading day.

For the consumer electronics sector has recently been frequently hammered by bad news, the industry believes that this may be related to the high expectations of the sector in the early days of the market. Therefore, in the absence of further exceeding expectations and the overall valuation is already high, as soon as there is a change in the market, it will have a greater negative impact on the stock price. China International Capital Corporation pointed out in a recent research report that after the release of iPhone in October, Apple's industrial chain has entered a window phase of lack of catalysts.

Plate differences pay more attention to the three new tracks

Although the share price of the "fruit chain" leader has adjusted significantly recently, the consumer electronics index has continued to fluctuate sideways since mid-July 2020, falling 1.81 per cent in the range from July 16 to the end of 2020. In 2021, the consumer electronics index began to rise steadily, still up 5.3% year-to-date. In many second-level sub-plates, the performance is not weak, ranking upper-middle.

Fu Chuxiong, an analyst at Yinhe Securities Electronics Industry, said that working from home and learning have promoted the rapid growth of consumer electronics demand, and the prosperity of the semiconductor industry has bottomed out in 2020. It is expected that the gap between supply and demand will continue to increase in the first half of 2021, leading to a continuous increase in the unit price and contract manufacturing costs of related parts, and the electronic plate is expected to rise in both volume and price.

In addition, some people in the industry have also pointed out that as the overseas epidemic situation is gradually controlled, the upgrading of superimposed industries and consumption, the prosperity of the consumer electronics industry will resonate with technological innovation. For the whole year of 2020, the increase is not large, while the segment that just started to rise in January and hit an one-year high, its fundamentals are more likely to continue to improve in 2021.

So, for the consumer electronics sector, how should investors layout in 2021?

Financial Associated Press comprehensive study of a number of brokerages found that brokers are generally optimistic about 5G mobile phones, wireless charging, smart wearable equipment three major tracks.

As for 5G mobile phones, he Chen, director of the large Manufacturing Center of Caixin Securities Research and Development Center, said that as the overseas epidemic is gradually under control and the construction of foreign base stations is gradually promoted, the demand for replacement of foreign smartphones is expected to come. Smartphone sales are expected to grow by 10% year-on-year in 2021 compared with 4G innovative areas such as RF front ends, antennas and non-metallic structures.

In terms of wireless charging, wireless charging has made great breakthroughs in consumer electronics charging protocol, development direction of transmitter, magnetic material of receiver, charging speed and charging scene. The future of 5G coincides with the expansion of wireless charging. More than 50% of 5G smartphones on the market have Qi-certified wireless charging capabilities, and wireless charging penetration continues to increase as conditions are ripe.

In terms of smart wearable devices, the epidemic has led to a stronger consumer demand for health monitoring. many manufacturers have recently released new smartwatch products, and there are a number of excellent smartwatch products on the market for consumers to choose from. Smartwatch is expected to usher in a period of outbreak. After the slowdown of mobile phone innovation, peripheral accessories such as wearable devices have become a new growth point for consumer electronics. At present, the penetration rate of TWS headphones is only about 15%, there is still a lot of room for growth, and smartwatches will be the next growth point in the wearable field after TWS headphones.