Mobile phone concept stocks Q1 performance review: 80% of companies have positive profit growth

According to the report of the China Academy of Information and Communications Technology, from January to March 2021, the total shipments of the domestic mobile phone market totaled 97.973 million units, a year-on-year increase of 100.1%. Among them, the shipments of 5G mobile phones totaled 69.846 million units and 64 new models were launched, accounting for 71.3% and 52.5% respectively. In terms of new models, a total of 122 new models were launched in the first quarter, a year-on-year increase of 48.8%.

Recently, Jiwei.com has counted the performance of mobile phone concept stocks in the first quarter of 2021. Overall, the performance of most mobile phone concept stock companies has achieved positive growth. On the one hand, the epidemic in the first quarter of last year caused a decline in mobile phone shipments, and the profit scale of manufacturers in the industrial chain shrank. They were generally in a loss state in the single quarter, resulting in a low base in the same period last year; on the other hand, mobile phone manufacturers have been intensively launching new products since the beginning of the year, and the recovery of demand has led to a continuous increase in sales in the domestic mobile phone market.

However, affected by the shortage of parts, fewer 5G application scenarios and the lack of "killer" applications, reports from multiple research institutions have shown that Q2 mobile phone shipments will decline. In addition, the mobile phone market is still under pressure from stock competition. Most mobile phone concept stock companies have focused their performance growth on new business areas such as smart wearables and new energy vehicles, and the competition track is far more than just a single mobile phone business.   

Total revenue of 462.5 billion yuan: 90% of companies achieved positive revenue growth

First of all, from the revenue point of view, among the 195 mobile phone concept stock companies counted, the total operating income in the first quarter of 2021 was 462.533 billion yuan, of which 9 companies exceeded 10 billion yuan, most of which were Apple concept stock companies, with a total revenue of 261.393 billion yuan, accounting for 57% of the total revenue. The first-ranked Industrial Foxconn had a revenue of 98.379 billion yuan, almost twice that of the second-ranked BOE A.

In addition, there are also 9 companies with revenues of 5-10 billion yuan, with a total revenue of 62.032 billion yuan. Although the gap between companies in this echelon and industry giants is not that big, and it can be said that any company has the potential to become the next giant, in the consumer electronics field where there are wolves in front and tigers behind, it is still very difficult for suppliers to achieve cross-level breakthroughs.

There is no doubt that the revenue of most companies is still concentrated below 5 billion yuan, with as many as 177 companies. Among them, there are 15 companies with revenue less than 100 million yuan, namely Riku Optoelectronics, National Technology, Lantech Optics, Helin Micronano, Tanaka Precision Machinery, Minxin Co., Ltd., Yitian Co., Ltd., Xinge Micro-Equipment, Oat Technology, Shihua Technology, Fangbang Co., Ltd., Tengjing Technology, Bioo Intelligent, Hekoda, and *ST Danbang.

However, as the epidemic gradually eased and market demand rebounded, many companies still achieved significant revenue growth. According to statistics, among the 195 companies, 90% (184) of the companies achieved year-on-year revenue growth. Among them, 32 companies achieved a year-on-year growth of more than doubled, 66 companies achieved a growth of 50%-100%, and 86 companies achieved a growth of less than 50%. Among them, Yuhuan CNC had the largest growth rate, mainly due to the impact of the epidemic in the same period last year, as well as the benefit of 5G commercial development and smartphone upgrades, which enabled its revenue to achieve a 4-fold year-on-year growth.

It is worth mentioning that the first domestic lithography company, Corechip Micro-Equipment, which successfully landed on the Science and Technology Innovation Board not long ago, also achieved a significant increase of 273.17% in revenue. At the same time, from 2017 to 2019, its revenue compound annual growth rate reached 201.98%.

Among the 11 companies whose revenue declined year-on-year in Q1, perhaps the impact of the epidemic in the first quarter of last year had already had a significant impact on their revenue. The year-on-year decline in revenue of the 11 companies was all within 100%, and the decline was not serious.

Total profit in Q1 was 31.29 billion yuan, and mobile phone shipments in Q2 may decline

In terms of net profit, mobile phone concept stock companies achieved a total net profit of 31.29 billion yuan in the first quarter of 2021, and 80% of companies achieved positive growth. Among them, BOE A's profit level and growth rate exceeded those of Foxconn and Luxshare Precision, ranking first with a net profit of 5.182 billion yuan. According to it, this is mainly due to the upward trend of product prices, the release of new project capacity, and changes in the scope of mergers.

Among them, there are 7 companies with a net profit scale of more than 1 billion yuan, and all of the above companies have achieved positive growth, with a total net profit of 15.481 billion yuan, accounting for nearly half of the total profit. There are 47 companies with a net profit of 100 million to 1 billion yuan, among which only Shenzhen South Circuit, Goodix Technology, and Holitech have a slight decline in growth rate, and the year-on-year decline is more than 25%. In addition, as many as 122 companies have a profit range of less than 100 million yuan. The number of companies with a year-on-year decline in this range has increased significantly, but there are still companies including Hengxuan Technology, Hesheng Shares, Korui Technology, Sanlipu, Jingce Electronics, Guangdong Junya, Shenzhen Textile A, and Tanaka Precision Machinery that have achieved ultra-high growth rates of 5 to 10 times.

In addition, 19 companies suffered losses. The companies with the largest losses were Visionox and Dongxu Optoelectronics, both of which suffered losses of more than 400 million yuan, while the losses of the remaining companies did not exceed 100 million yuan. Regarding the performance of increased revenue but not increased profits, Visionox said that the recognized investment income of associated companies decreased compared with the same period last year, and the research and development expenses increased compared with the same period last year. Compared with its peers in the industry such as BOE and Shenzhen Tianma, Visionox can be said to have always been at a competitive disadvantage. Although its outstanding performance mainly relies on government subsidies, its revenue growth has slowed down in recent years, and its profitability is relatively weak. After deducting non-recurring gains and losses such as government subsidies, its non-net profit has been in a loss state for many years.

For Dongxu Optoelectronics, the decline in the yield of some of its products in the first quarter led to a decline in gross profit margin. In addition, the decline in orders for high-end equipment and new energy vehicle businesses further reduced net profit. Its revenue and net profit in 2020 have already declined sharply, and the net profit loss was as high as 4 billion yuan.

Both companies are display panel manufacturers. However, their performance has not increased but decreased when the panel industry is experiencing the longest price increase cycle in a decade, while their peers have not only turned losses into profits, but also increased their business scale. For Visionox and Dongxu Optoelectronics, the reduction in orders due to the epidemic is obviously not a strong reason for their performance losses. The low gross profit margin caused by insufficient product competitiveness and weak "hematopoietic" ability may be the essential reasons.

Finally, let's look at the ranking of net profit growth. The most eye-catching one is Hengxuan Technology, which was listed not long ago. Benefiting from the explosion of the TWS headset market, its audio chips grew rapidly, and its net profit in Q1 increased by more than 40 times. Kerry Technology, Hesheng Shares, Tongfu Microelectronics and Huagong Technology also achieved a year-on-year growth of 10 to 20 times.

At the same time, there were 79 companies with an increase of 1 to 10 times, and 70 companies with an increase of less than 1 time. Among the 41 companies with a year-on-year decline, the companies with the largest losses were Baoming Technology, Longli Technology, Tianjue Technology and *ST Danbang, with declines of 387.16%, 457.93%, 1006.82% and 1114.47% respectively.

Overall, from the first quarter of 2021, the performance of most mobile phone concept stock companies has achieved positive growth. On the one hand, the epidemic in the first quarter of last year caused a decline in mobile phone shipments, the profit scale of manufacturers in the industrial chain shrank, and they generally suffered losses in the single quarter, resulting in a low base in the same period last year; on the other hand, mobile phone manufacturers have been intensively releasing new products since the beginning of the year, and the recovery of demand has led to a continuous increase in sales in the domestic mobile phone market.  

However, data from the China Academy of Information and Communications Technology show that in April this year, the total shipment volume of the domestic mobile phone market was 27.486 million units, a year-on-year decrease of 34.1%. The latest report from market research firm Digitimes Research shows that due to the shortage of semiconductor components, the shipment volume of smartphones of mobile phone brands such as Xiaomi, OPPO, and vivo will decline in the second quarter of this year, and is expected to pick up again in the second half of the year.