news

our reporter chen jialan reports from guangzhou

this year, the consumer electronics industry has recovered significantly, and the performance of many companies in the upstream industry chain has rebounded significantly.

recently, the semi-annual reports of listed companies have been released in batches, and upstream industry chain companiesluxshare precision（002475.SZ）、lens technology（300433.SZ）、changying precision（300115.SZ）、sunny optical technology(2382.hk), foxconn (2317.tw), and other a-share, hong kong-listed, and taiwan-listed companies have successively "submitted their papers", and their overall performance has shown a trend of recovery, among which most are apple supply chain companies.

a reporter from china business news noted that despite the poor performance of iphone sales, overall, the performance of many apple supply chain companies showed a recovery trend in the first half of 2024, with net profit increasing year-on-year. among them, the good performance of many apple supply chain companies was also driven by the company's non-apple supply chain business.applein order to avoid over-reliance on the company, they have strengthened their diversified business layout.

according to the financial report, luxshare precision achieved operating income of 103.597 billion yuan and net profit attributable to the parent company of 5.396 billion yuan in the first half of this year, with year-on-year growth rates of 5.74% and 23.9% respectively. lens technology's operating income and net profit attributable to the parent company in the first half of the year increased by 43.07% and 55.38% year-on-year, respectively, to 28.867 billion yuan and 861 million yuan. hon hai's revenue in the first half of the year reached 2.875 trillion new taiwan dollars, a year-on-year increase of 4%; net profit was 57.1 billion new taiwan dollars, a year-on-year increase of 25%. everwin precision's revenue increased by 30.15% year-on-year, and its net profit turned from loss to profit year-on-year.

at the same time, sunny optical technology achieved revenue of rmb 18.86 billion in the first half of the year, a year-on-year increase of 32.1%; net profit attributable to the parent company was rmb 1.079 billion, an increase of approximately 147.1% over the same period last year;q technology(1478.hk) the unaudited revenue for the first half of 2024 was approximately rmb7.675 billion, an increase of approximately 40.1% year-on-year.

behind the collective improvement in the performance of these upstream companies in the consumer electronics industry, many companies mentioned the factor of the recovery of the consumer electronics market.

for example, lens technology, which mainly engages in consumer electronics business, mentioned in its financial report that "the consumer electronics market has recovered, driving the value of the industry." wang laichun, chairman and general manager of luxshare precision, talked about the company's operating conditions in the first half of the year in a recent investor survey and said: "in the consumer electronics sector, some unstable short-term factors still exist internationally this year, and the global economy is in a weak recovery state."

sunny optical technology said that the increase in revenue was mainly due to the recovery of the smartphone market, which led to an increase in revenue from mobile phone lenses and camera modules. q technology said that the factors for the recovery in performance include the improvement in the global smartphone market, the increase in the group's cooperation share with major global smartphone brands, and significant progress in the camera module business in the automotive and internet of things (iot) fields, which led to a year-on-year increase of about 30.8% in camera module sales, a significant improvement in capacity utilization compared with the same period, and an increase in the proportion of mid-to-high-end camera module products, which improved the gross profit margin.

gao hongxiang, senior research manager of idc's global professional foundry and display industry research team, analyzed to reporters that the reason for the overall recovery of upstream component manufacturers is that the inventory of component manufacturers has dropped significantly since the second half of last year, the supply chain has also entered a recovery trend, and upstream components have increased in price to varying degrees, which has led to a recovery in the performance of many component manufacturers in the first half of the year.

from the perspective of the global smartphone market, idc data shows that in the first half of 2024, global smartphone shipments reached 574.8 million units, a year-on-year increase of more than 7%. the smartphone market has returned to the growth track after experiencing fluctuations. from the perspective of the pc market, canalys data shows that in the second quarter of 2024, the global pc market is accumulating growth, with shipments of desktops and notebooks reaching 62.8 million units, a year-on-year increase of 3.4%, and has achieved growth for three consecutive quarters.

althoughgoertekrevenue in the first half of the year declined year-on-year, but net profit rebounded sharply. the financial report shows that goertek achieved a net profit of 1.225 billion yuan in the first half of the year, a year-on-year increase of 190.44%. goertek also mentioned: "in the first half of 2024, the global consumer electronics industry has recovered, and the market demand for some emerging smart hardware products has picked up."

non-apple chain business has highlights

previously, apple's financial report showed that its hardware business performance was differentiated, with mac revenue growing for two consecutive quarters, while iphone revenue declined for two consecutive quarters. among them, mac sales increased by 4% year-on-year to us$7.45 billion in the second fiscal quarter of 2024 (the first quarter of the natural year); mac revenue in the third fiscal quarter of 2024 (the second quarter of the natural year) increased by 2.5% year-on-year to us$7.01 billion.

in the second fiscal quarter of 2024, iphone revenue was $45.96 billion, down nearly 10% year-on-year; in the third fiscal quarter of 2024, iphone revenue was $39.296 billion, down 0.9% year-on-year. apple faces greater competitive pressure in the chinese market. in the second fiscal quarter of this year, apple's sales in greater china fell 8% to $16.37 billion; in the third fiscal quarter, apple's revenue in greater china fell 6.5% to $14.73 billion.

the reporter noticed that although apple's iphone hardware performance was poor, the performance of many apple supply chain giants was good. among them, the good performance of some apple supply chain companies was also driven by the growth of non-apple supply chain businesses.

companies such as luxshare precision, lens technology, hon hai, and goertek have always been highly dependent on apple due to their high sales to apple. however, these "apple supply chain" giants are now also using diversification strategies to reduce their dependence on a single large customer and seek more stable and sustainable growth.

from the 2024 semi-annual report, for example, lens technology's revenue growth also benefited from the assembly business of non-apple customers and the new energy business automobile business. lens technology mentioned that the company accelerated the development of the odm or oem model of vertical integration of the industrial chain and mass production of smartphones, payment terminals, pcs, laptops,smart homein 2021, lens technology invested 3 billion yuan to build the first phase of the lens smart terminal intelligent manufacturing project in xiangtan, starting with mobile phone assembly and entering the fields of smart wearables, tablets/laptops, automotive electronics, etc. at present, the customers of lens' complete machine assembly orders in xiangtan include xiaomi, meizu,niowait.

lens technology's semi-annual report also showed that in the first half of 2024, the company's revenue from smart cars and smart cockpit products reached 2.7 billion yuan, compared with 2.28 billion yuan in the same period last year.

for example, hon hai's main businesses include four categories: "consumer smart products", "cloud network products", "computer terminal products" and "components and other products". the reporter sorted out hon hai's financial reports and learned that in the first half of 2024, the two major categories of "cloud network products" and "components and other products" had obvious sales. hon hai's cloud network product revenue was nt$863.7 billion, compared with nt$656.4 billion in the same period last year. components and other products revenue was nt$178.8 billion, compared with nt$148.5 billion in the same period last year.

hon hai group spokesperson wu junyi said that driven by strong customer demand, hon hai group's ai server revenue in the second quarter increased by more than 60% month-on-month, accounting for more than 40% of hon hai's overall server revenue. it is expected that the strong demand for ai servers will continue, and the view that ai servers will contribute 40% of this year's server revenue remains unchanged. wu junyi also predicted that in terms of the performance of the four major product areas, the cloud network product category and components and other product categories are expected to perform better than expected this year, which will be the two major driving forces for this year's performance growth.

for example, luxshare precision's automotive business segment accounts for the smallest proportion, but it is a highlight of its performance in the first half of the year. luxshare precision's semi-annual report shows that in the first half of 2024, the automotive business segment achieved revenue of 4.756 billion yuan, a year-on-year growth of 48.30%, far higher than the year-on-year growth rates of the two major business segments of consumer electronics and communications.

in recent years, goertek has turned to the vr/ar industry, but it has not yet brought it good results. goertek's main businesses include three major business sectors: precision components, intelligent acoustic systems, and intelligent hardware. goertek's semi-annual report shows that the revenue of its intelligent hardware business, which mainly focuses on vr equipment and game consoles, fell by 32.31% year-on-year in the first half of 2024, dragging down the company's performance. according to a research report by huachuang securities, the decline in the performance of this business was mainly affected by factors such as the normal decline in the volume of game console assembly projects in the later stage of the product life cycle.

major general ding, a senior industrial economist and founder of ding technology, analyzed to reporters that the improvement in the performance of apple supply chain companies is related to the gradual recovery of the consumer electronics industry since this year, and is also related to these companies actively adjusting their business structure and strategically upgrading in the direction of diversification and high-end development. this shows that these companies are gradually forming more diversified and higher value-added growth drivers while stabilizing the fundamentals of apple's business.

it should be noted that these "apple supply chain" giants who have actively deployed diversified businesses are also facing challenges in their development. for example, luxshare precision's current automotive business accounts for only 4.59% of its total business, and it is still a challenge to reach its goal of 200 billion yuan in 10 years. lens technology's current automotive business accounts for less than 10% of its total business, and goertek's smart hardware business accounts for nearly half of its revenue. however, due to the fact that the development of the xr industry has not been as expected, it has now become a drag on the company's performance.

regarding the reasons for the diversification of the layout of the apple supply chain, major general ding said: "what companies need to do is to make themselves flexible in business adjustments through technological innovation and business expansion, rather than putting all their eggs in one basket."