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Original title: Decoding the A-share Apple Industry Chain Company Annual Report: What are the variables under cold market reception as performance has risen?
Why is the performance of Apple’s industrial chain soaring, but “not good” in the secondary market?
Apple’s recent quarterly report performed well. In the fourth quarter of 2020, the company’s revenue was $ 111,439 million, a year-on-year increase of 21%. Revenue broke the $ 100 billion mark for the first time, setting a record.
Against the backdrop of global economic development hampered by the epidemic, Apple’s single-quarter revenue has delivered results that exceed market expectations. It is worth noting that the Chinese market has contributed a lot to this, and Apple’s sales in Greater China soared 57%. Cook said China’s iPhone performed very well, with record updates.
Under the new pattern of great division of labor in the global industrial chain, A-share-related companies also got a share of this feast.
According to Wind data, as of January 31, 31 of the 41 companies in Apple’s A-share industry chain announced their 2020 performance forecasts. Among them, 21 achieved pre-rise performance, 2 returned losses, 2 continued to make profit and 2 forecast Compared to the same period last year (19 companies performance growth), overall profitability has improved.
However, although the performance forecast is better than market expectations, many leading companies in Apple’s industry chain have recently slumped in an eventful period and their stock prices have continued to decline. GoerTek, Dongshan Precision, Luxshare Precision and Lens Technology share prices have fallen and the market is in the sector, the continuity of the titration is doubtful.
Is Apple’s industrial chain short-term fluctuations or is there a fundamental change? Differences are coming.
The main advantages are highlighted
According to the data, 16 of the 21 companies with a pre-happy performance are expected to increase their net profit by more than 50% last year. Among them, Changjiang Electronics Technology’s net profit growth rate is the fastest, and it is expected to make a net profit of about 1.23 billion yuan, a year-on-year increase of 1287.27%.
Changjiang Electronics Technology is a leader in domestic semiconductor packaging and testing. Apple’s US official website announced the list of the top 200 global vendors in 2018. Changjiang Electronics Technology first appeared on Apple’s vendor list. The previous annual report showed that the company’s overseas sales accounted for about 80%.
The performance forecast shows that during the reporting period, Changjiang Electronics Technology actively seized market opportunities and increased its expansion efforts. There was strong demand for orders from key international and domestic customers, and the company’s revenue increased significantly year over year. At the same time, each factory continued to increase cost control and operating expense control, which improved overall profitability.
However, it should be noted that Changjiang Electronics Technology’s strong profit growth last year is closely related to the enthusiasm of the entire packaging and testing market. The company previously stated that due to the iterative impact of 5G communication technology, domestic terminal manufacturers continue to move their supply chains to the country under the trend of domestic substitution, and the demand from the packaging and testing market is gradually increasing. The company’s production capacity in the first three quarters of 2020 is relatively saturated, revenue and net profit reached a record.
The second-largest growth rate is Changying Precision, which is expected to achieve a net profit of about 530 million yuan to 650 million yuan last year, an increase from 532.28% to 675.44% year-on-year. The company said that the adjustment of the product structure has achieved results, and notebook, tablet and laptop products have increased significantly, which has a positive impact on efficiency. According to last year’s semi-annual report, Changying Precision’s sharp rise in net profit may be closely related to increased demand for wearable devices.
Last year’s earnings growth rate exceeded 100% Other companies such as Ai Shide, Lens Technology, BOE A, BYD, Anjie Technology, Wansheng, Goertek, Tianyin Holdings and Dongshan Precision.
It is worth mentioning that, as the main supplier of Apple’s glass cover, Lens Technology’s supply share in Apple’s supply chain has been steadily increasing. In August last year, the company acquired 100% of the shares of Kesheng Taizhou and Keli Taizhou held by Catcher Technology for 9.9 billion yuan, thus cutting off the iPhone metal case production business.
He noted in the annual report that the company timely and reliably ensured a large number of delivery needs of intermediate customers and expanded the company’s market share in the global field of high-end segmented products. It is expected to achieve a net profit of 4.89 billion yuan to 5.06 billion yuan, an increase of 98% -105% year-on-year.
Another capital market concern is Apple’s TWS headset provider Goertek. Recently, the company’s stock price plummeted due to alleged cash flow constraints, and then it quickly released a 2020 performance bulletin in response to market inquiries. The express report shows that the company’s annual operating income was 57.613 million yuan, a year-on-year increase of 63.92%, and net profit was 2.855 million yuan, an increase of 122.94% year-on-year.
On the second day after the publication of the aforementioned performance bulletin, Goertek’s share price finally rallied, showing the attractiveness of high-performance growth to the market.
Rugged autumn
Although the Chinese market has supported Apple’s eye-catching earnings report, the A-share industry chain company also delivered a report card that beat expectations. However, it cannot be ignored that Apple’s industry chain of A shares is currently in trouble. Apple cut orders, supply chain transfer risks, a major inventory crisis, and industry chain rumors of knock-out known targets, which will add to the future trend growth of the performance of related sectors There are some uncertainties.
On January 21, some media reported that OFILM’s South China plant (OFILM Guangzhou) was about to be sold to Luxshare Precision. The target was also said to be affiliated with OFILM’s cell phone camera modules division (CCM division) and was part of Apple’s supply chain. In September last year, OFILM’s touch business was rumored to be kicked out of the “Apple industry chain.” However, Ou Feiguang denied the earlier news.
In the evening of the next day, although OFILM released an annual report forecasting a significant increase in performance: achieving a net profit of 810 million to 910 million yuan, an increase of 59% -78% year-on-year, Oufeiguang shares the price still fell, and the stock price has fallen in recent days, almost 30%.
Coincidentally, on the night of January 27, GoerTek announced the resignation of its CFO, and then investors questioned Goertek’s financial troubles. There is even a post on the media platform, where it is indicated that the company uses long-term financing through the issuance of convertible bonds to solve the lack of operational liquidity. The next day, this one hundred billion leader also fell to the limit.
The trend of the Wind Apple Index is also trending down. Compared to the high point in November last year, the index has fallen 17%. The downward trend since December has been more pronounced.
At the same time, in the fourth quarter of 2020, fund institutions have significantly reduced their holdings in Apple’s industrial chain. The CICC research report noted that the main targets for the funding reductions include Luxshare, Goertek, Xinwei, Pengding, Lens and other related targets in Apple’s industrial chain, and many of them are prime targets.
Why is Apple’s industry chain performance skyrocketing, but “not good” in the secondary market?
In this regard, Hu Yujing, a consumer electronics researcher at the CICC, analyzed that the main reason was the lack of significant performance catalysts in the smartphone market entering the “empty window period” at the end of the year. At the same time, it was also affected by rumors of a slowdown in AirPods shipment growth. Also, AIoT’s innovative products like AR / VR have yet to be shipped on a large scale, and the market has a strong wait-and-see sentiment.
At the same time, many rumors of order cuts are also a negative factor in the recent secondary market. However, in response to these rumors, the industry has different interpretations.
A 21st Century Business Herald reporter noted that, in response to rumors of Apple’s “court orders,” the recent Lens Technology conference call denied this. As for the reason for the rumors, some insiders said that fluctuations in the industry chain used to be relatively large in the first and second half of the year, but have now stabilized. The possibility of short positions may be around the first. quarter, so some rumors will appear at this time, hoping to get lower trading chips, but they will not affect the long-term trend of the industry.
In response to recent frequent news about the removal and transfer of Apple’s supply chain, some industry experts discussed the journalists: “Apple allows suppliers to control and balance each other while transferring the premium capabilities of parts technologically higher to prevent the risk of excessive concentration of the supply chain. These rumors are actually a reflection of Apple’s multi-vendor strategy. “
Despite rumors and shocks, looking to the future, market participants generally believe that there is no need to worry too much about seasonal fluctuations. The iterative momentum of new consumer electronics products is expected mid-year, and Apple’s supply chain fundamentals remain optimistic about the steady growth of Apple’s supply chain.
However, this judgment is obviously based on Apple’s sales expectations.
China Securities Investment noted that in 2021, the share of the iPhone will rise further, with annual shipments expected to reach 220-230 million, a year-on-year increase of about 15%. Due to the low base in the first half of 2020, Apple will continue to usher in a good growth trend in the next quarter and will continue to be optimistic about the sales of Apple’s new 5G phones and increasing its share in China.
(Author: Zhang Sainan Editor: Wu Yanling)
