On August 30th, the consumer electronics sector continued to strengthen, with Fenda Technology (002681.SZ) achieving a triple-digit gain. By noon, Yingtang Zhikong gained 20.08%, Zhideli gained 20.02%, Jiebang Technology gained 16.61%, and Jingyan Technology gained 14.79%. In addition, multiple stocks such as Lingyi Zhizao also achieved 10CM gains.

Upon review, it can be found that the consumer electronics industry has continued to benefit recently. News of Huawei's upcoming three-foldable screen phone has garnered market attention, while rumors that Apple has obtained a patent for a smart ring have also been widely circulated, reigniting speculation in the consumer electronics sector.

Consumer electronics market recovery is improving

In the first half of 2024, the main operating indicators of the consumer electronics industry improved significantly compared to 2023, with steady growth in key product output and continued recovery in the domestic demand market.

According to data from the National Bureau of Statistics, China continued to consolidate its position as the world's largest producer of consumer electronics products in the first half of this year, with mobile phone production reaching 752 million units, an increase of 9.7% year-on-year. Among them, smartphone production reached 563 million units, up 11.8% year-on-year, with year-on-year growth rates 2.8 percentage points and 9.9 percentage points higher than the same period in 2023, respectively. Microcomputer production reached 157 million units, an increase of 1% year-on-year, reversing the previous negative growth trend.

Encouragingly, both the domestic demand market and foreign trade exports are showing signs of recovery. On the domestic front, data from the China Academy of Information and Communications Technology shows that domestic mobile phone shipments reached 147 million units in the first half of 2024, an increase of 13.2% year-on-year. In terms of exports, China Customs data shows that China exported 366 million mobile phones in the first half of this year, up 4.9% year-on-year, with export value reaching RMB 388.28 billion. Laptop computer exports reached 68.7 million units, up 2.5% year-on-year.

Markets for mobile phones, PCs, and new terminals have entered a recovery and uptrend cycle, which has also boosted the performance of listed companies in the industry chain. According to disclosed semi-annual financial reports, BOE Technology Group Co., Ltd. (000725.SZ) achieved revenue of RMB 93.39 billion in the first half of the year, an increase of 16.47% year-on-year. Net profit attributable to shareholders of listed companies reached RMB 2.284 billion, a significant increase of 210.41% year-on-year. Luxshare Precision Industry Co., Ltd. (002475.SZ) achieved revenue of RMB 103.6 billion in the first half of the year, an increase of 5.74% year-on-year. Net profit attributable to shareholders of listed companies reached RMB 5.396 billion, an increase of 23.89% year-on-year. Goertek Inc. (002241.SZ) achieved net profit attributable to shareholders of listed companies of RMB 1.225 billion in the first half of the year, a significant increase of 190.44% year-on-year. Additionally, companies such as Chunqiu Electronics and Changying Precision have turned losses into profits year-on-year.

New products emerge in an endless stream, filling the market with a sense of technology

It is worth mentioning that the third quarter marks the peak season for consumer electronics, with major manufacturers successively launching new products and technologies, which is expected to continue driving the industry chain into a prosperous cycle.

Foldable screen phones represent a new form of smartphones. Since the second half of last year, companies such as Huawei, Honor, OPPO, vivo, and Xiaomi have driven technological upgrades, addressing issues such as thickness, weight, and cost associated with early-stage foldable screen phones. According to IDC data, the Chinese foldable phone market maintained triple-digit year-on-year growth in the second quarter of this year, reaching 104.6%, with shipments exceeding 2.5 million units.

Recently, the industry has seen further positive developments. Huawei is set to launch a three-foldable screen phone in September, which aims to serve as a premium alternative to tablets such as iPads, meeting users' dual demands for large screens and portability. According to foreign media reports, Apple is also researching the production of foldable iPhones, with an official launch potentially as early as 2026.

Currently, manufacturers such as Honor, Xiaomi, vivo, and Samsung have already launched multiple foldable screen phones, and they are actively pushing forward with research and development for three-foldable screen phones.

IDC analysts believe that as more and more manufacturers continue to release new-generation foldable screen products, the Chinese foldable screen phone market is expected to continue growing rapidly in the second half of the year, and the development momentum may be better than that of the global foldable screen phone market.

In addition to three-foldable screen phones, Apple's research and development of smart rings has also attracted significant market attention. It is understood that Apple has obtained a patent for a smart ring that can track the wearer's health and physiological data and can also interact with other products in the Apple ecosystem.

Numerous new products are set to be launched, and technology enthusiasts are eagerly anticipating them, making the consumer electronics market full of potential in the second half of the year and beyond.

Institutions generally optimistic about sector layout opportunities

With technological upgrades and the benefit of trade-in policies for consumer goods, the market is generally optimistic about the development of the consumer electronics industry.

Huafu Securities stated that the consumer electronics industry is currently at a triple inflection point, with short-term stabilization and recovery, the advent of an industry innovation cycle, and continuous catalysis from new products launched by technology giants. In the short term, consumer electronics end-user demand is rebounding. In the long term, AI-enabled smart terminals are expected to drive accelerated replacement of mobile phones and PCs.

Guotai Junan Securities noted in its research report that the peak season for consumer electronics in the third quarter of this year is expected to drive demand upwards across the board, including products such as mobile phones, PCs, and general-purpose servers. GF Securities analysts believe that they continue to be optimistic about the recovery of consumer electronics innovation demand, self-sufficiency and control, and the AI-driven benefit chain.

From a market perspective, as of noon on August 30th, the consumer electronics sector led the gains, with notable performance in concepts such as foldable screen phones, AI glasses, and mixed reality. In terms of individual stocks, Fenda Technology achieved a triple-digit gain, Yingtang Zhikong and Zhideli both achieved 20CM gains, and Shenzhen Technology and Lingyi Zhizao also achieved 10CM gains, while Goertek Inc. surged by nearly 9%.