The National Development and Reform Commission and the Ministry of Finance issued a notice regarding the implementation of large-scale equipment upgrades and Consumer replacement policies by 2025, mentioning that subsidies will be implemented for purchasing new digital products such as Smart Phones. For individual Consumers purchasing Smart Phones, tablets, smart watches, and bracelets, with a single selling price not exceeding 6,000 yuan (RMB), a subsidy of 15% of the product selling price will be provided. Each Consumer can receive a subsidy for one item per product category, with a maximum subsidy of 500 yuan per item. The shares of mobile phone and device stocks were pressured in the morning market, with Xiaomi (01810.HK) down 4.7%, ZTE (00763.HK) declining nearly 4.1%, Sunny Optical (02382.HK) plunging 7.7%, AAC Technologies (2018.HK) falling 5.5%, while COWELL (01415.HK) dropped 6.7%.

CMB International recently released a report stating that the National Development and Reform Commission announced on January 3 that it would expand the national subsidy program to more product categories, including Smart Phones, tablets, and smart watches, which was earlier than market expectations. Although some provinces in mainland China began expanding their subsidies for Smart Phones/tablets from August last year (10 to 20% of the average selling price; up to 600 to 2,000 yuan), it is believed that other provinces will accelerate the implementation of the policy, which will boost the overall demand for Smart Phone replacements in the short term.

The bank also listed the forecast of the market share of domestic mobile phone equipment suppliers' brand customer sales composition from last year:

Shares │ Apple │ Huawei │ Samsung │ Other brands │ Other

AAC Technologies (02018.HK) │ 25% │ 10% │ 10% │ 43% │ 12%

FIT HON TENG (06088.HK) │ 25% │ - │ - │ - │ 75%

Sunny Optical (02382.HK) │ 5% │ 5% │ 15% │ 60% │ 15%

BYD Electronics (00285.HK) │ 60% │ 5% │ 5% │ 15% │ 15%

Tongda (00698.HK)│5%│5%│5%│50%│35%

Qiu Titanium (01478.HK)│-│5%│-│85%│15%

Dongjiang Group (02283.HK)│10%│-│-│-│90%

Xinyi (00732.HK)│-│-│3%│62%│35%

COWELL (01415.HK)│90%│-│5%│-│5%

Luxshare Precision Industry (002475.SZ)│60%│10%│3%│-│27%