Huawei crisis eased, BOE and other Huawei and 5G concept stocks rose across the board

The highly anticipated meeting between the Chinese and US heads of state at the G20 summit released important information. China and the United States will restart economic and trade consultations on the basis of equality and mutual respect. At the same time, Trump said that American companies can continue to sell components to Huawei!

This is the first time that Huawei's mobile phone business, especially overseas sales, has been greatly affected since May this year, following the escalation of Sino-US trade frictions, Huawei's inclusion in the "Entity List", and the banning of Google's GMS services. In this regard, Huawei founder Ren Zhengfei once said that Huawei's overseas terminal business fell by as much as 40%, then rebounded, and the current decline will be less than 20%, showing signs of recovery.

At the same time, after the Huawei ban, not only Huawei and Chinese industries were affected, but also American supply chain companies suffered heavy losses. Jiwei.com reported that Huawei's 33 core suppliers in the United States, including Micron, Qualcomm, Intel and other companies, circumvented the control of the "Huawei ban" and gradually resumed partial supply to Huawei. It can be seen that Trump's statement that American companies that sell parts to Huawei should be allowed to continue supplying is also closely related to the pressure exerted by local American manufacturers.

In general, at the closing ceremony of the G20 summit, Trump stated that the United States would no longer impose new tariffs on Chinese exports and could continue to sell components to Huawei, which may lead to a reversal in the situation for Chinese semiconductor and industry chain manufacturers.

In this regard, EBSCN Communications Research stated that after the Entity List incident, the capital market generally significantly lowered its overall shipment expectations for Huawei mobile phones. After Trump’s statement, Huawei’s mobile phones may return to shipment expectations of more than 220 million units. Huawei and the 5G replacement wave are expected to drive the consumer electronics cycle to rebound in the third quarter of this year.

At the same time, Jiwei.com reporters noticed that influenced by this good news, as of this morning's closing, the share prices of related concept stocks such as Huawei's supply chain and 5G industry chain exploded across the board and rose sharply.

According to Jiwei.com's analysis, in Huawei's supply chain, many stocks such as Xingxing Technology, Shenzhen Tianma, BOE, Dianlian Technology, and Guanghong Technology hit the daily limit, Luxshare Precision rose more than 8%, and Xinwangda, Sunlord Electronics, Dongshan Precision, Goodix Technologies, Changxin Technology, Skyworks Communications, and Goertek all rose by more than 6%.

In addition, 5G concept stocks also rose sharply. Among them, Shanghai Electric Co., Ltd. hit the daily limit, and Luxshare Precision, Tuowei Information, Dongshan Precision, Shenzhen South Circuit, Jingwang Electronics, and Feirongda also rose by more than 5%.

In this regard, Guosheng Securities Research Report pointed out that Huawei may be lifted from the ban, and Huawei's stocking situation will be eased. At the G20 summit, the US said that it may lift some restrictions on Huawei. This change is believed to ease Huawei's stocking situation in various terminal products to a certain extent, helping Huawei to cope with the ever-changing market demand and the high demand for Huawei's terminal products in the downstream market during this period. Guosheng Securities also believes that with the lifting of the ban on Huawei's sales, the shipment volume of Huawei's consumer electronic terminals is expected to be revised upward again, which is good for the mobile phone supply chain in all links. Therefore, it is also strongly recommended to focus on the strong related targets of Huawei's mobile phone supply chain.