Mobile Phone Industry Chain Chop Tide? "Freezing" And Slow Growth Curve

In the second quarter of the first quarter, when most of the company's performance increased, the pressure on mobile phone industry chain began to emerge again.

This is also evident from the recent announcement and performance meeting of the relevant listed companies. The global mobile phone lens leader, Dali Li, disclosed in a press conference that the average price and overall volume of the shipment in the next two quarters will be downward.

Many listed companies also pointed out in the performance notice that although the comprehensive recovery and resumption of production has basically been achieved in March, the recent decrease in consumption desire in the downstream industry will lead to a decrease in the company's income. In view of the latest development of the new crown pneumonia epidemic in the world, it is still uncertain whether the rest of the year will continue to impact and adversely affect the needs of the global economy and end users.

It is not difficult to understand that the behavior of cutting orders is mainly related to the closed management measures caused by the epidemic. Especially in the important battlefields of domestic mobile phone manufacturers such as India and Southeast Asia, it is the area where the epidemic is spreading further and has not yet seen the inflection point. The uncertain prospect brings the impact on the industrial chain.

    IDC global hardware assembly research team manager Gao Hongxiang told the twenty-first Century business news reporter that roughly from the two quarter, the main reason for the "freeze" in overseas markets has become the list, which is mainly concentrated on core components such as PCB board. But for the demand of semiconductor products such as chips, mobile phone manufacturers are afraid to rush to chop the bill, so they are still at the level. In the trend of slow growth.

A mobile phone micro special motor assembly line in a factory in Anhui. People's vision

Uncertainty in performance

The news of the list was already scattered in the market near the end of the first quarter, which is related to the operation cycle of the industrial chain.

Prior to this year, the market has predicted that this year will be a key year in the industry cycle, which is also manifested in the industry chain level. Benefiting from the continuation of orders at the end of 2019, a number of recent earnings reports have revealed that the industry chain has been developing towards a good direction. Even some manufacturers suddenly exploded last year, and the first quarter performance in 2020 also achieved a good leap.

In response to the call for resumption of production and recovery, around March, the industry chain basically responded to about 90% recovery rate. But from this time on, overseas epidemic spread gradually, and these places began to enter the first stage of the epidemic.

Against this background, many industrial chain and channel traders who mainly attacked overseas markets such as Spain, India and Africa confirmed to the twenty-first Century economic report reporter that after the blockade strategy began in some overseas countries, the demand for mobile phone consumption in the local market has basically frozen.

"I originally planned to take a trip in Egypt and Kenya in March and continue to expand the market, but now I don't know when I can go." An African channel merchant told reporters that the planned Africa Business Week was scheduled to be officially cancelled in 4-5. Now he can only focus on the subscription business mode, pushing the business of transporting daily necessities to different overseas markets in a period of about 2 months.

But for manufacturers whose main business is the mobile phone industry, it may not be so easy to seek a transfer.

In recent announcements, precision technology manufacturers Rui Sheng Technology said that in the short and medium term, consumer sentiment and end-users' demand for smart phones will inevitably be negatively affected. In a challenging economic environment, the group's primary task is to observe financial discipline, maintain healthy balance sheets and strong cash flow, and further improve operational efficiency through strict cost control and higher automation level. The board also recommends no final dividend in the 2019 fiscal year.

The Group expects that due to the longer waiting time after the Spring Festival, the higher price pressures expected, and the impact of consumers' expectations of lower income on the purchase of smart phones, the income and net profit of Mao Lihe in the first quarter of 2020 will be adversely affected.

Dali light management said at the meeting that the demand for mobile phones in April will be weaker than that in March. The demand in May will be weaker than that in April. The number of new models in the second quarter of 2020 will also decline. At the same time, the demand for products with low and medium specification in 2020 Q2 is relatively strong, which will not be conducive to the company's two quarter shipment price and gross margin performance.

Huang Yuxuan, a research consultant of Ji bang, also admitted that in recent days, the trend of the overall mobile phone market has been revised several times. "We finally estimated that the output of mobile phones will be reduced by 11.3% compared to the same period last year, mainly from the decline of Q1 to Q3." She added that the current forecast for the first quarter will decline by 10%, and that it is more worried about Q2. In April, it benefited from the March emergency list. The channel demand in the market has not yet been reflected back. Orders are continuing. The main worry is the mid May.

Where is the follow up order?

As the market in India and Southeast Asia is affected by the epidemic, various measures have been taken, and the demand for mobile phone industry has begun to weaken rapidly.

Gao Hongxiang analyzed the twenty-first Century economic report reporter. It was also because the overseas market was not affected by the epidemic in the first quarter. In March, many manufacturers were actively preparing for the two markets.

"In the process, we noticed a phenomenon. At that time, many spare parts manufacturers seemed to have higher demand for orders in overseas markets than the demand for mobile phone assembly. Basically before mid 3, demand has been strong. " He said that even if the news of the spread of the epidemic began in Europe and America, the industry chain orders still had a good performance.

This makes him start to worry about whether the next industry will appear "upper (industrial chain upstream) cold and hot" phenomenon. Soon, the multinational blockade policy made the local suddenly frozen, and a large number of spare parts were still stuck in customs during this period.

In late March, the whole machine manufacturer began to adjust the order. Gao Hongxiang is mainly concerned about Samsung's performance. Since its gradual loss in the Chinese market, Samsung has launched many cost-effective products since 2019. To minimize the cost of such products, the ODM generation plant needs to complete the design and assembly.

"Samsung has increased the number of outsourcing since last year, and this year's volume is larger than last year." He pointed out that even at the beginning of the year, Samsung is still increasing orders, but with the freezing of market sentiment, Samsung has cut 2 orders continuously, but it is still larger than last year's total volume.

Gao Hongxiang analysts believe that the order should be cut mainly in the category 4G products. "Because India and Southeast Asian markets are dominated by low and middle level 4G products. There will be about 2/3 demand in the global 5G market this year, and the remaining 5G demand will be in apple and Samsung.

Nomura Securities also pointed out in the research report, after investigation, apple cut 20% in the second quarter, and experience shows that Apple's chop list is usually a series of actions, and it needs to be on the alert in the coming months. At the same time, Apple's supply chain operations will be lower than expected in the first half of the year, and the risk of the third quarter variables should not be underestimated.

Not only is the future order volume suddenly being transferred, but now it is stuck on the "road" component, and it may also become a headache for manufacturers.

Gao Hongxiang believed that, even without the impact of the epidemic, the products that were actively transported to India in the early part of this year were to some extent in order to catch up with the market demand before balancing the cost in April. Therefore, local demand for orders in the future will decline, let alone the consumption demand stagnation caused by the epidemic.

So even if logistics is likely to relax in the near future, there will be no opportunity to be fully digested into the market in advance. This will include goods in transit such as Hongkong, China, India and other customs, local dealer warehouses and so on. He pointed out that the next industry chain manufacturers may also face difficulties in the face of these spare parts products, in the end how to plan in the local product planning and positioning adjustment.

But for the more upstream semiconductor industry, it may not be that difficult. Gao Hongxiang told reporters that even now, the mainstream manufacturers do not have much adjustment to the annual sales target of mobile phones, to some extent, considering the demand for all kinds of chip products.

"Semiconductor is not how much you can get at any time. The strategy of the manufacturer is usually to lock in the capacity of the key components in advance, so it is not easy to adjust such components." He pointed out that, even in the background of continuous cutting of single component manufacturers, the capacity of semiconductors is in a smooth increasing trend.