Zhitong Financial APP learned that the overall performance of the electronics industry in the first half of 2023 was poor because there was no overall strong recovery on the demand side, according to a research report released by Bank of China Securities. However, with some sub-areas taking the lead in improving, the industry Q2 month-on-month improvement trend is more obvious. With the arrival of the traditional peak season in the second half of the year, plate performance may usher in quarter-by-quarter upward, maintaining the industry's "stronger than the market" rating. It is recommended that domestic alternative properties are strong, downstream demand continues to improve or new demand opens the track of incremental space: 1) semiconductor equipment and parts; 2) AI computing industry chain; 3) storage; 4) DDIC industry chain; 5) consumer electronics and XR.
The main points of BOC Securities are as follows:
In the first half of the year, the overall operation of the industry was poor, and the profitability of 23Q2 improved significantly compared with the previous month.
23H1, in the context of global macroeconomic weakness and geopolitical conflicts, the electronic industry is in the bottom range of many downstream areas, and demand continues to be depressed. Revenue point of view, the performance of the industry is not good, 23H1 industry overall revenue of 1.208717 trillion yuan, YoY-5.76%. From the perspective of net profit, the 23H1 industry as a whole achieved net profit of 41.333 billion yuan, YoY-47.33%. But from a single quarter point of view, the electronics industry 23Q2 overall revenue of 629.604 billion yuan, QoQ+8.72%, to achieve a net profit of 25.545 billion yuan, QoQ+61.80%.
Equipment revenue maintained year-on-year growth in the first half of the year, material Q2 profit increased month-on-month.
Semiconductor equipment 23H1 realized revenue of 20.042 billion yuan, YoY+35.8%. Quarterly point of view, 23Q1 revenue of 9.162 billion yuan, QoQ-26.5%;23Q2 revenue of 10.88 billion yuan, QoQ+18.7%. Benefiting from the orders accumulated in the previous period, the revenue of the semiconductor equipment industry increased to a certain extent in the first half of the year compared with the same period last year. The net profit of semiconductor material 23Q2 is 636 million yuan, QoQ+25.7%. Benefiting from the decline in the prices of upstream chemical raw materials, the semiconductor materials industry's homing net profit in the first half of the year increased to a certain extent compared with the same period last year.
The digital chip reverses the loss compared with the loop, while the analog chip is still under pressure.
The digital chip 23H1 achieved a home net profit of 2.198 billion yuan,-79.31% compared with the same period last year. After experiencing a negative home net profit of 22Q4, the performance successfully reversed losses in the first half of 2023, but still failed to reach the average level of 22Q3 and previous quarters. Analog chip 23H1 home net profit-655 million yuan, from profit to loss of 3.429 billion yuan, but Q2 loss has narrowed the trend.
Consumer electronics boom still shows a declining trend, panel large-size prices pick up, LED to meet the marginal improvement.
1) Consumer electronics sector: 23H1 revenue has declined. The net profit of home has increased compared with the same period last year, and the profitability of the industry as a whole has improved. 2) Panel: consumer confidence of 23H1 residents continues to be weak, and the industry is still in a state of loss. However, for the panel industry as a whole, the decline in revenue has slowed down, and demand is expected to recover in the second half of the year. 3) the LED:23Q1LED industry turned from deficit to profit, the profitability was gradually repaired, the overall inventory of the industry was eliminated, and the inventory level gradually decreased.
Investment advice:
It is recommended that the domestic alternative attribute is strong, downstream demand continues to improve or new demand opens the track with incremental space.
Recommended: 1) Semiconductor equipment and components: 688409.SH, 301297.SZ)
2) AI computing industry chain: industrial USI (601138.SH), Shanghai Power Co., Ltd. (002463.SZ), Shennan Circuit (002916.SZ)
3) Storage: 603986.SH, 688110.SH, 300042.SZ, 001309.SZ.
4) DDIC industry chain: Crystal integration (688249.SH)
5) Consumer electronics and XR: smart Cube (301312.SZ), Zhaowei Electronics (003021.SZ), Huaxingyuan Chuang (688001.SH). At the same time, it is suggested that attention should be paid to Huawei's return to the supporting industry chain.
Risk Tips:1) the global economy is declining, consumer electronics demand is not as expected, which is a drag on the progress of industry recovery; 2) the production reduction of the storage and panel industry chain is less than expected, and the price is under pressure again; 3) the breakthrough speed of AI computing technology is not as fast as expected, and the production capacity is limited to shipments; 4) the terminal technology innovation is slow, and the product performance-to-price ratio is too low so that sales fall short of expectations.