How long have you not changed your phone?
In the Weibo poll initiated by Sanlian Life Weekly, 59% of people voted for "two to three years" and 21% voted for "one year". There are even many people, including post-00s, who admit that they have not changed their mobile phones for four years.
Today's smartphones are becoming like PCs, gradually fading the aura of fashion, personality, and face, and returning to the attributes of daily tools.
2021 is the fourth year of continuous decline in global smartphone shipments, and perhaps the "hard days" are still to come compared to the seven-year trough that PCs have experienced.
According to data previously released by the China Academy of Information and Communications Technology, mobile phone shipments in the domestic market in January were 33.02 million units, down 17.7% year-on-year; shipments in February were 14.86 million units, down 31.7% year-on-year.
So far this year, there is also news that Apple may cut the production of 20 million newly released iPhone SE; Tianfeng International analyst Guo Mingxi also said that China's major Android phone brands have cut about 170 million orders so far this year, accounting for 20% of the original shipment plan in 2022.
In this context, chip manufacturers and ODM manufacturers that relied on the mobile phone industry in the past have also been impacted, including Weier shares, Zhuoshengwei, Wingtech Technology, etc. The stock prices of companies have fallen by nearly 40% since the beginning of the year, far exceeding the average 13% decline of A-share listed companies; there are Huawei Hubble, Xiaomi, Vivo and other "star shareholders" to support the RADIO frequency manufacturer Weijie Chuangxin broke on the first day of listing, closing with a decline of 36%. How much has the downturn in the mobile phone market affected these companies? Are there quality companies that have been wrongfully killed?
01
Mobile phones follow in the footsteps of computers
Mobile phone factories reduce shipments, reduce configuration, and the downturn will spread to the entire industrial chain
Mobile phones and computers seem to be the opponents of the king. The rise of smartphones in 2011-2017 was precisely the era of declining computer sales.
And in those depressed years, the first to feel the cold was the sales end. Taking Beijing's computer city as an example, in 2015, Zhongguancun e-World announced its closure; in 2016, Hailong Electronic City was closed for transformation; in June 2019, Bainaohui closed its store and changed owners of Dinghao Building in the same year.
Nowadays, mobile phone stores have also ushered in a wave of store closures, door-to-door customers no longer buy mobile phones but have become mainly mobile phone repair and purchase accessories, many stores can not sell a mobile phone a day, and it has become normal to transfer or close stores under the income.
Compared with past mild recessions, this wave of production cuts at the beginning of this year is quite radical.
The main reason is that the launch of 5G mobile phones last year, coupled with the extraordinary stockpiling of mobile phone manufacturers to compete for the market vacated by Huawei, makes Q1 2021 a rare peak season for stockpiling in recent years, and the shipment base is high. There are traces of a sharp year-on-year decline in January-February 2022.
Stimulated by the above short-term factors, the decline has been amplified.
The impact of the longer-term, but also the deeper factors, one on the supply side, mobile phone manufacturers "Jiang Lang is exhausted", insufficient innovation, lack of attractiveness, memory, camera, screen, running speed and other technical points have been relatively mature, improve the marginal effect brought by these technical points weakened; second, on the demand side, people found that the social value of changing mobile phones can be weakened, the practicality of mobile phones gradually ranked to a higher priority, coupled with people's consumption ability to reduce, thereby reducing the frequency of replacement of electronic products.
Third-party statistics show that the replacement cycle of domestic consumers has been extended to 28 months to 30 months, and foreign consumers are generally in 35-40 months.
Consumption is sluggish, and in the next few years, if there is no eye-catching innovation, the mobile phone industry will inevitably go the same way as computers.
To make matters worse, rising parts and material costs are increasing the production costs of mobile phone manufacturers, and this pressure is easily "repulsed" if it is passed on to consumers through price increases. Therefore, it can be seen that some mobile phone manufacturers, in addition to cutting orders, have also begun to reduce the specifications and configuration of mobile phones to control costs.
Whether it is reducing shipments or reducing configuration, it is not good news for upstream hardware manufacturers.
02
Assessment of the extent to which the "Big Three" are affected
The 40% slump during the year is busy diversifying
The orders from mobile phone manufacturers have not only created mediatek and Qualcomm, two major mobile phone chip giants, but also brought the miracle of increasing the market value from 5 billion to 180 billion in three years to Zhuoshengwei, an RF manufacturer in A-share listed companies.
As a supplier of mobile phone brands such as Samsung, Xiaomi, vivo, etc., in 2017-2021, The compound growth rate of revenue is as high as 51%, the compound growth rate of net profit attributable to the mother is as high as 66%, and the ROE is maintained at more than 40%, and the fundamentals are "perfect" in the eyes of investors.
On March 31, Tianfeng International analyst Guo Mingxi said that China's major Android mobile phone brands have cut orders, and the amount reached 170 million, accounting for 20% of this year's shipment plan.
According to this data, Zhuoshengwei, whose customers cover the world's major Android mobile phone manufacturers, will face no small challenge. Because in addition to RF switches, other products of Joyson Micro, such as power amplifiers (PA), low-noise amplifiers (LNA), SAW filters, RF front-end modules, etc. are also mainly aimed at the mobile phone market, which is also the place where it is most criticized by the market - high dependence on mobile phones.
However, it should be noted that in 2017-2021, when the performance of Zhuosheng micro broke out, the mobile phone market has fallen into a state of continuous shrinkage, and the real growth of Zhuosheng micro is due to the rise of domestic Android mobile phone brands on the one hand, on the other hand, its core product RF switch has opened a window for domestic substitution.
In other words, the performance of Joyson Micro and mobile phone shipments are not positively correlated.
From 2020 onwards, Joyson Micro launched RF module products, and in 2020, the first half of 2021 to obtain revenue of 278 million, 662 million, revenue accounted for from 10% to 28%, is expected to 2021 this business revenue growth rate of 300% -400%, becoming a new growth pole. The market size of RF modules is several times that of RF switches, and the domestic replacement space is larger, so there is no need to be too pessimistic about Zhuoshengwei due to the reduction of mobile phone shipments.
Another A-share listed company, Wingtech Technology, is not very optimistic. At present, it mainly has two major businesses, one is the communication business, that is, to provide ODM services for smart phones, tablets, laptops and other products, and the other is the semiconductor business.
Although Nexperia, a subsidiary of Wingtech Technology, is the leader of automotive semiconductors, benefiting from the trend of doubling the demand for power devices in automobile electrification and intelligence, the communication business accounting for 80% and 60% of the revenue and operating profit is still the pillar of performance, and in the case of solidification of the mobile phone ODM pattern and insufficient new downstream orders, the communication business will inevitably drag its legs.
In the first three quarters of 2021, Wingtech Technology achieved total revenue of 38.646 billion yuan, an increase of 0.8% year-on-year; achieved a net profit of 1.974 billion yuan, down 14% year-on-year. Performance has been reflected.
Weier shares also encountered investor voting in the context of the market downturn, and its CIS and TDDI products are very dependent on the mobile phone market.
Take TDDI, industry insiders pointed out that year-to-date, Chinese brand manufacturers' mobile phone shipments have been disappointing, dragging down the demand for TDDI chips for mobile phones, and related TDDI chip suppliers are facing pressure to reduce quotations in the second quarter.
However, Weir shares realized early on that consumer electronics is "unreliable" and has completed the transformation in the past two years. For example, its automotive CIS has made breakthroughs in many regions in Europe, america, Japan and South Korea; security CIS has become a supply in major customers in Europe and the United States, and several famous European brands have changed from three supplies to one supply; and cultivated emerging high-speed growth businesses, including MCU, RF, Mosfet, IGBT, SiC and other product lines.
At present, Weir's mobile phone CIS accounts for less than 50%, and the company plans to further reduce the proportion of consumer electronics on the basis of the current 40%-50% revenue share.
On the whole, in the case of the shrinking mobile phone market, according to the degree of impact on performance, Wingtech Technology > Zhuosheng Micro >Well shares. The latter two in the field of mobile phones still have room for domestic substitution, Wingtech Technology's ODM business is relatively less likely to go further, will face the threat of reduced mobile phone shipments; although Zhuoshengwei still sticks to the mobile phone market, but the ceiling of new products is high, the growth rate is fast, and the follow-up promotion is worthy of attention; Weier shares are gradually platformized, expanding multi-field and multi-products, and the anti-risk ability is higher.
This article is written by | Gu Tianjiao Source | Talent Magazine
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