20210929-招银国际-China_Technology_Sector_Accessing_potential_risks_of_recent_power_shortage_toChina_tech_supply_chain_6页_1mb

报告摘要

China Technology Sector Summary

Core Content

This report provides an analysis of potential risks to the China technology sector due to recent power shortages in Jiangsu and Guangdong provinces. It outlines the impact on production and supply chain operations, identifies companies with high exposure to these regions, and evaluates their valuation and investment ratings.

Main Points

Power Shortage Impact: Recent power outages in Jiangsu and Guangdong have led to production halts or limitations. Although the disruption is expected to be short-term, it remains a concern for the sector, especially as 3Q21 is a restocking peak season for many downstream products.
Sector Weakness: The sector has been weak due to slower-than-expected order restocking, driven by global handset demand weakness and semiconductor shortages from lockdowns in Southeast Asia (e.g., Malaysia and Vietnam).
Investor Recommendation: The report suggests a conservative outlook for the sector in the near term. Investors are advised to accumulate deep-value names by mid-October once there is more clarity on iPhone 13 sell-through and the power shortage's impact.

Key Information

Companies with High Exposure to Jiangsu and Guangdong

Jiangsu

AAC Tech (2018 HK): Acoustics, haptics, optics, casing
FIT Hon Teng (6088 HK): Connectors (PC, mobile, comm)
Q-tech (1478 HK): Camera module, fingerprint, auto cam module
Everwin (300115 CH): Casing

Guangdong

O-Film (002456 CH): Handset Camera, Touch Panel
BYDE (285 HK): OEM Assembly, Casing
Cowell (1415 HK): Camera Module
TK Group (2283 HK): Plastic molding/precision
Lenovo (992 HK): PC Brand

Valuation Table

Name	Ticker	Rating	Mkt Cap (USD mn)	Price (LC)	TP (LC)	Up/Down -side	P/E (x) FY21E	P/E (x) FY22E	P/B (x) FY21E	P/B (x) FY22E	ROE (%) FY21E	ROE (%) FY22E
AAC Tech	2018 HK	Hold	5,752	37.10	45.3	22%	19.2	17.3	1.8	9.1	-	-
Sunny Optical	2382 HK	Hold	28,634	203.20	210.1	3%	36.9	28.9	11.8	9.3	-	-
BYDE	285 HK	Buy	8,120	27.95	49.5	77%	14.3	10.0	2.6	2.2	15.5	18.5
Q-tech	1478 HK	Buy	1,722	11.32	22.0	94%	11.1	9.3	3.1	2.6	23.1	22.8
TK Group	2283 HK	Buy	322	3.01	4.1	36%	4.7	4.7	1.9	1.9	20.0	20.0

Sales Mix Exposure (Figure 3)

Company	Apple	Huawei	Samsung	Other CN Brands	Others	Major Products
AAC Tech	45%	5%	25%	20%	5%	Acoustics, haptics, optics, casing
FIT Hon Teng	40%	3%	-	-	57%	Connector, wireless charging, accessories
Sunny Optical	2%	5%	15%	63%	15%	Camera module, handset lens sets, auto lens/module
BYDE	40%	5%	10%	30%	15%	Metal/glass/plastics casing, ODM/OEM, e-cigarette
Tongda	20%	5%	10%	35%	25%	Metal/plastic casing, waterproof
Q-tech	-	5%	-	85%	15%	Cam module/lens, fingerprint modules, auto cam module
TK Group	10%	-	-	-	90%	Plastic molding, plastic precision
Truly	-	-	3%	62%	35%	Camera modules, fingerprint, display modules
Cowell	90%	-	5%	-	5%	Camera Module
Luxshare	60%	10%	3%	-	27%	Wireless, AirPods, Watch, acoustics/haptics, EMS
Goertek	45%	5%	10%	15%	25%	Acoustics, AirPods, Watch, AR/VR, Wearables
Sunway	45%	5%	10%	30%	10%	Antenna, wireless charging, connector, RF
Lens Tech	50%	5%	10%	20%	15%	Glass/metal casing, EMS

Investment Ratings and Outlook

Hold: AAC Tech, Sunny Optical
Buy: BYDE, Q-tech, TK Group, Cowell, Luxshare, Goertek, Sunway

Conclusion

The report highlights the potential impact of the power shortage on the China tech supply chain and recommends a conservative approach to the sector. Investors are advised to wait for more clarity on iPhone 13 sell-through and the resolution of the power shortage before making investment decisions. The focus is on accumulating deep-value stocks with potential for long-term growth.

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