Semiconductor: 21H1 industry is booming, under the background of shortage and rising prices, it is expected that the performance of related companies will achieve rapid growth compared with the same period last year and month-on-month.
In the first half of 2021, chips such as MCU, power management, MOSFET and discrete devices were obviously out of stock, the price was increased and the delivery period was prolonged. In this context, the profitability of some semiconductor companies has greatly improved. At the same time, local manufacturers have ushered in the development opportunity of accelerating domestic alternatives. We are optimistic about the performance of related companies, such as SMIC (expected Q2 revenue year-on-year + 38% earnings 40%), Huahong Semiconductor (estimated Q2 return net profit year-on-year + 90%-120%), North Huachuang (the company expects Q2 return net profit 30% year-on-year), Huafeng Measurement and Control (estimated return net profit compared with the same period last year), Starr Semiconductor (estimated return net profit compared with the same period last year), Hengxuan Technology (estimated revenue from Q2 compared with the same period last year), Weir shares (estimated return net profit from Q2 compared with the same period last year + 120% 160%), Zhuo Shengwei (estimated net profit from Q2 compared with the same period last year + 200 million 250%), Zhaoyi Innovation (estimated net profit from return to home of Q2 + 80% compared with the same period last year).
Looking to the future, we think that the shortage of the industry may reach a peak in Q3, the shortage of Q4 chips may be alleviated gradually, and mobile phones and AIoT will continue to drive the follow-up demand. Under the background of the current Sino-US hard science and technology bifurcation and the shortage of chips from overseas manufacturers, it is recommended to focus on: 1) Northern Huachuang, Micro and Micro, Huafeng Measurement and Control, etc., related to equipment localization; 2) benefit from 5G, AIoT, cloud computing, automotive electronics and other downstream high-growth and out-of-stock and domestic alternative design companies such as Hengxuan Technology, Zhaoyi Innovation, Zhuoshengwei, Weir, Fuhanwei, Jingchen, Starr Semiconductor, etc. (3) SMIC, Huahong Semiconductor, Changdian Technology, Tonfu Micropower, Huatian Technology, etc., which are developed in the technical layout of characteristic process manufacturing and advanced packaging.
Consumer Electronics: sales of Q2 phones are relatively low, and it is expected that the performance of related companies will be under pressure periodically. We are optimistic about the high certainty brought by the pull of Apple chain in the second half of the year.
In the first half of 2021, the sales of mobile phones Q1 increased sharply compared with the same period last year, while sales of mobile phones and headphones Q2 were relatively low. In this context, the growth rate of Q2 performance of some industrial chain companies is expected to slow: such as Lixun Precision (estimated Q2 homing net profit is expected to be + 1% compared with the same period last year), BYD Electronics (Q2 homing net profit is expected to decrease by 40% compared with the same period last year), Pengding Holdings (Q2 homing net profit is expected to decrease by about 17% and 38% compared with the same period last year), Dongshan Precision (Q2 return net profit is expected to be + 10% year on year), Tsinghua Holdings (expected Q2 return net profit year-on-year + 10%).
Looking forward to the second half of the year, we are optimistic about the overall performance of the consumer electronics sector driven by the release of new 2021H2 products.
1) Mobile end: the new Apple iPhone phone in 2021 is expected to be released in the third quarter. The start of the industrial chain will lead to the increase of related companies' profit margins and profit margins. It is recommended to pay attention to Lixun Precision, Gale shares, Pengding Holdings, Leiyi Manufacturing, AAC Technology, Shunyu Optical Technology and so on.
2) AIoT end: new products continue to be released iteratively, and the Android brand market for smart headphones continues to grow. It is recommended to pay attention to Hengxuan Technology, Walker, Gale shares, etc. The smartwatch industry has accelerated growth, including Samsung, Xiaomi, Huawei, OPPO and so on. 2021 is expected to be the first year of Android. It is recommended to pay attention to Hengxuan Technology, Gale shares and so on. Apple's products continue to iterate, while production capacity is transferred to mainland China. Pay attention to Lance Precision, Lance Technology, etc. The long-term trend of AR/VR has been established. Apple, Sony and others are expected to release new products in 2022. It is recommended to pay attention to Gore shares, Shunyu Optical Technology, Weir shares and so on.
Electronic components plate: benefit from the continued trend of the boom, Q2 performance has a high degree of certainty, with medium-and long-term layout value, it is recommended to find a bargain layout. Among them
1) Security: security demand continues to recover in the post-epidemic era. Considering the cardinal number, it is expected that the performance growth rate of leading companies in 2021 will be high before and after low growth. In the medium to long term, security leaders will actively enter the digital transformation market will open up more space, and the 5-10 years dimension is optimistic about the growth trend of security leaders. Firmly recommend Haikangwei (expected Q2 return net profit year-on-year + 15%-25%) and Dahua shares (expected Q2 return net profit year-on-year + 0%-10%).
2) passive components: the rising price trend of the industry is slowing marginally. In the medium to long term, local companies are actively promoting the landing of new production capacity. Fenghua Hi-Tech, Sanhuan Group, Shunluo Electronics and other companies are expected to benefit deeply from the domestic substitution trend of passive components. Among them, Fenghua Hi-Tech (estimated Q2 return net profit year-on-year + 80-120%), Sanhuan Group (estimated Q2 return net profit year-on-year + 50%), Shunluo Electronics (the company expects Q2 to return to its home net profit of + 30% compared with the same period last year);
3) Panel: the price of the TV panel continued to rise in June, with a month-on-month ratio of 1.1% to 2.5%, which has significantly converged; in the short term, the relationship between supply and demand in the industry has eased and tends to be balanced. In the future, under the background of reshaping the industry pattern, Shuangbiao is expected to release profits steadily. We are firmly optimistic in the medium and long term, and suggest that we continue to pay attention to BOE and TCL technology.
4) in the short term, the increase in the price of copper clad laminate has led to a high certainty improvement in the profitability of related companies. It is recommended to pay attention to Kingboard laminate (it is estimated that the net profit of H1 will be + 380,450% compared with the same period In the long run, the downstream demand is the core driving force, and the product structure is upgraded to the main growth momentum. In the second half of the year, we focus on the warming of communications infrastructure construction and the upgrading of server platforms. In a longer period, we recommend that we pay attention to structural upgrades such as automotive electronics, HDI, semiconductor board, and Shengyi Technology (Q2 homing net profit is expected to be + 500.55% compared with the same period last year), Shennan Circuit and so on.
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