Jinwu Financial News | The mobile industry chain is collectively rising, with BYD Electronic (00285) increasing by 12.74%, Cowell (01415) rising by 8.35%, Fit Hon Teng (06088) up by 6.58%, AAC Tech (02018) increasing by 6.29%, Q Tech (01478) up by 4.19%, and Sunny Optical (02382) rising by 3.18%.

Goldman Sachs indicated that the growth of China's smart phone market is slowing down in 2024, with shipments in October decreasing by 1% year-on-year, while the growth from January to October is 6% year-on-year. The monthly shipment volume peaked in May and has been declining month by month from June to October. It is expected that year-on-year growth will continue to be pressured in November and December due to the high base effect from last year. Nevertheless, the trend of camera specification upgrades is evident, with the penetration rate of cameras over 20 million pixels rising to 52% in 2024 so far, an increase compared to 39% and 31% in 2023 and 2022, aligning with Goldman Sachs' expectations for the upgrade of smart phone camera specifications in China.

The firm believes that despite the slowdown in market growth, the upgrade of camera specifications shows that there is still a growing consumer demand for high-end features. The overall market is expected to decline by 1% year-on-year in the fourth quarter. In the 5G mobile phone market, shipments in October grew by 1% year-on-year, with a penetration rate reaching 90%. The number of new models of 5G smart phones launched decreased by 29% year-on-year, indicating a reduction in new entrants to the market and a stabilization of the competitive landscape. The firm recommends focusing on companies that excel in camera upgrades and the advancement of 5G technology, such as Hon Hai Precision, AAC Tech, and Largan Precision, which have advantages in technological innovation and market adaptability and are expected to gain more market share in the future.

In addition, according to media reports, Apple has placed an order for M5 chips with Taiwan Semiconductor, and the production of related chips is expected to start in the second half of 2025, with the first devices equipped with M5 chips possibly being launched at the end of 2025 or the beginning of 2026.