Behind the shrinking global smartphone shipments: leading mobile phone concept stocks continue to fall

Nowadays, in addition to facing fierce competition in the existing market, domestic and foreign smartphone manufacturers must also deal with the impact of the global chip shortage.

Amid the technological competition among major brands and the market share gains and losses, global smartphone shipments continue to decline. According to the latest report from Canalys, in the third quarter of 2021, global smartphone shipments shrank by 6% year-on-year due to a shortage of components and suppliers' difficulty in meeting smartphone supply.

In addition to the decrease in shipments caused by chip shortages and the impact on the recovery of the mobile phone market, the impact of multiple rounds of epidemics in overseas countries such as India and Southeast Asia since April has also led to poor smartphone production performance and market demand, resulting in a month-on-month decline in smartphone market shipments since the second quarter, and further shrinkage of the market in the third quarter.

Chip shortage + overseas epidemic: Global smartphone shipments fell 6% in Q3

In the Canalys Q3 report, among the top five manufacturers in terms of market share, Samsung ranks first with a share of 23%; thanks to the market impact of iPhone 13, Apple's market share increased from 12% in the same period last year to 15%, returning to second place; although Xiaomi maintained a 14% market share, it fell from second place last year to third place; vivo and OPPO followed closely behind, both tied for fifth place with a 10% share. Coincidentally, their market shares in Q3 2020 also remained consistent, both at 9%. Compared with Q3 2020, although the sales of domestic mobile phone brands vivo and OPPO have increased instead of decreased, the growth rate is still significantly weak compared with Apple.

In the industry chain, smartphone manufacturers are maximizing equipment production, while chip manufacturers on the supply side are also raising prices to curb over-ordering and try to narrow the gap between supply and demand. However, Canalys believes that despite this, the chip shortage will not be alleviated until 2022, and smartphone brands can only share the high cost of global shipping by raising product retail prices.

Coincidentally, Counterpoint Research also lowered its forecast for global smartphone shipments this year from the initial 1.45 billion units to 1.41 billion units, and the growth forecast was also lowered from 9% to 6%.

The agency pointed out that the main reason for the shortage is the supply of DDI and PMIC components, among which only 80% of the key component orders of smartphone OEMs and sellers in Q2 were met, and Q3 may be worse; and only 70% of the component orders of suppliers were met. The final result is a reduction in terminal product shipments, which will be transmitted to other suppliers in the industry chain.

In fact, in the first half of this year, with the stabilization of the epidemic and the introduction of vaccines, the global smartphone market share actually showed signs of a brief recovery.

IDC data shows that global smartphone shipments reached 346 million units in Q1 2021, a year-on-year increase of 25.5%; Q2 shipments were 313 million units, a year-on-year increase of 13.2%. Canalys also showed that global smartphone shipments reached 347 million units in Q1, a year-on-year increase of 27%; Q2 shipments were 316 million units, a year-on-year increase of 12%, but a 9% decrease from Q1.

That is to say, although the mobile phone market began to pick up in the first half of the year, the growth rate in Q2 slowed down significantly compared with the short-term outbreak in Q1, and shipments also declined compared with Q1. In addition to the reduction in shipments caused by the chip shortage, which affected the recovery of the mobile phone market, the impact of multiple rounds of epidemics in overseas countries such as India and Southeast Asia since April also led to poor performance in smartphone production and market demand, resulting in a month-on-month decline in smartphone market shipments since the second quarter, and further shrinking the market in the third quarter.

Low shipments led to a sharp decline in the share prices of leading concept stocks

In fact, the shipment volume of the domestic mobile phone market is not ideal. According to the report of China Academy of Information and Communications Technology, the domestic mobile phone shipment volume in September was 21.44 million units, a year-on-year decrease of 8.1%; while in August, the domestic mobile phone shipment volume was 24.306 million units, also a year-on-year decrease of 9.7%.

According to reports from multiple data agencies, domestic smartphone shipments showed signs of fatigue in the second quarter of this year.

According to the Canalys report, in the first quarter of 2021, China's smartphone market returned to the level of the first quarter of 2019, with shipments of 92.4 million units, a year-on-year increase of 27%. However, in the second quarter, China's smartphone market shipments fell by 17% from the first quarter to 74.9 million units, and the number of manufacturers with shipments exceeding 10 million units decreased from 5 to 3. IDC data also showed that China's domestic smartphone market shipments in Q2 were about 78.1 million units, a year-on-year decrease of 11.0%.

Overall, IDC data shows that the domestic market shipments in the first half of 2021 were 164 million units, a year-on-year increase of 6.5%. However, the driving force of the domestic mobile phone market in the first half of the year mainly came from the better market environment in Q1 this year compared with the same period last year after the epidemic eased. After the Spring Festival peak season, the original blockbuster products in Q2 were absent, and the existing products failed to fully stimulate the replacement needs of most users. Product demand continued to be lower than expected, and suppliers had to slow down the pace of shipments.

The sluggish domestic and even global mobile phone shipments have already shown signs in the secondary market.

Observing the stock price trends of leading concept stocks such as Luxshare Precision, Lens Technology, Everwin Precision, Wingtech Technology, and Transsion Holdings this year, it is found that the highest stock prices mostly appeared around January. Among them, Luxshare Precision's stock price reached 63.15 yuan/share on January 15, Lens Technology achieved 41.05 yuan/share on January 22, Everwin Precision's stock price was 27.8 yuan/share on January 8, Wingtech Technology reached 133.74 yuan/share on January 22, and Transsion Holdings also reached 260.86 yuan/share on February 10.

However, since May, the share prices of the above-mentioned leading concept stocks have been fluctuating downward. As of the close of October 22, Luxshare Precision's price was 37.83 yuan per share, down 40% from its highest point in January.

Lens Technology's price is 19.72 yuan per share, a 52% decrease from January;

Changying Precision quoted 15.15 yuan per share, down 46% from January;

Wingtech Technology's price is 98.00 yuan per share, down 27% from January;

Transsion Holdings quoted 143.52 yuan per share, a 45% decrease from February.

In addition, there are also mobile phone concept stocks that have been falling since last year. Among them, Lingyi Intelligent Manufacturing reached 14.88 yuan per share in December last year, but closed at only 5.94 yuan per share as of October 22 this year, a drop of 60%;

From its high of 66.18 yuan per share in August last year, Xinwei Communication's stock price has fallen all the way to 21.36 yuan per share today, a drop of 68%.

The continued downturn in global smartphone shipments has a direct impact on the share price changes of some leading smartphone concept stocks, and the current unclear stock price trend also reflects to a certain extent the negative sentiment of the capital market towards smartphone shipments. Under the influence of chip shortages and repeated rebounds of overseas epidemics, smartphone shipments in the short term are still not optimistic.