【Short line drive】
On January 17, the MLCC sector rebounded strongly.
MLCC is a multilayer chip ceramic capacitor, which has the advantages of small size, high specific volume, and high precision, and is widely used and is called "industrial rice".
【Core Logic】
1. Demand side: large downstream consumption and rapid development
5G mobile phones: MLCCs are the most used passive components in mobile phones. Compared with traditional mobile phones and smartphones, the amount of stand-alone MLCCs of traditional mobile phones is 290-350, while the amount of MLCCs used by smartphones is 410-450. At present, the penetration rate of 5G mobile phones is in a stage of rapid improvement, which will drive the continuous growth of passive component market demand.
5G base station: Due to the increase in channels and bandwidth, a single 5G base station requires about 15,000 MLCCs and 10,000 resistors, which is about 2-3 times that of 4G base stations. China's 5G base station construction will grow exponentially from 2019 to 2021, and the increase in the use of MLCCs and resistors in single base stations is expected to bring about a continuous improvement in demand for passive components.
Automotive electronics: With the development of vehicle electrification, the demand for passive components such as powertrains, entertainment systems, ADAS systems, and safety systems will increase.
2. Supply side: the rise of local manufacturers is accelerating, and there is broad space for domestic substitution
Together, the five major suppliers Murata, Samsung Electric, Guogeo, Taiyodian and TDK account for about 80% of the market. Imported products are mainly concentrated in the middle and high-end.
Domestic companies such as Fenghua Hi-Tech, Sanhuan Group, Torch Electronics, Hongyuan Electronics, etc. are actively expanding production, and domestic MLCCs will occupy more market share in the future.
Based on the average annual import volume of 2.6 trillion yuan from 2018 to 2020,
【Trend Research and Judgment】
MLCC has obvious cyclical attributes, and the industry has experienced two rounds of upward and downward cycles since 2016, and the core influencing factors are changes in supply, inventory and demand.
In the short term, the industry boom has bottomed out, and MLCC prices and utilization rates are expected to continue to recover as inventories dematerialize further.
In the longer term, the downstream of passive components is optimized in the direction of increasing the proportion of automobiles and industries, and as consumer demand stabilizes, automotive and industrial demand continues to grow rapidly, a new upward cycle is expected to open in 2023.
【Investment Opportunities】
Judging from the growth history of Japanese component giants: manufacturers with vertical integration capabilities of materials, processes and equipment are expected to stand out, and through the expansion and vertical extension of horizontal product lines, the future growth space is huge.
【Related subjects】
Fenghua Hi-Tech, Sanhuan Group, Boqian New Materials, Tajing Technology
【Research report source】
Zou Lanlan of Great Wall Securities and other "Passive Components Industry Review Report: Demand Recovery Boosts Destocking, Rising Prosperity Expectations Strengthen-230106"
Everbright Securities Liu Kai et al. "Passive Components: Stable Growth of Cornerstone of the Electronics Industry, Strong Certainty of Localization - 221012"
Industrial Securities Li Shuangliang et al. "Passive Components Topic 3: Industry Prosperity is Expected to Bottom Out, Domestic Substitution Accelerates - 221019"
| Sector tracking (market heat 44°C/100°C) | ||||
| Strong stocks | Broadcom Integration, Yueling Co., Ltd., United Technology, Baiwei Storage, Taiyong Long March, Resconda, Holitai, Hunan Investment, Songdu Co., Ltd., Xiangcai Co., Ltd., Guosheng Financial Holdings | |||
| Section/Theme | subdivision | disposition | Core logic | Reference target |
| State-owned enterprise reform | State-owned enterprises | 10% | In 2023, the restructuring of central enterprises in the three fields of medical care, military industry and new energy will climax. A new round of state-owned enterprise reform and deepening and upgrading has begun, and the professional integration of central enterprises is expected to set off a new upsurge in many fields. In 2023, the supply chain security of energy, food, military industry and other important industrial chains will be put on the agenda, and it is expected that these areas may become the key areas for the mergers and acquisitions and restructuring of central enterprises. According to the CSRC's emphasis on building a valuation system with Chinese characteristics some time ago, the acceleration of the reform of central enterprises will be of significant significance to improving the valuation of central enterprises. | Linhai Co., Ltd., Guihang Co., Ltd., China Science Biography, China Publishing, Dongxin Heping, CSSC Emergency, Yito Co., Ltd., China Haicheng, CNPC Capital, Sinoma Energy Conservation, Zhongshi Media, CITIC Haizhi, CCCC Real Estate, CNNC, COFCO Capital, China Iron |
| estate | Head and private housing enterprises | 10% | The financial sector launched new plans to improve the assets and liabilities of high-quality housing enterprises at the beginning of the year: encourage financial institutions to negotiate independently with high-quality housing enterprises to promote the reasonable extension of stock financing; Increase new financing support such as credit and bonds; Research banks provide loans to high-quality real estate enterprises to reasonably meet the working capital needs at the group level; Support the repayment of overseas debts in accordance with the law, and provide policy support such as foreign exchange management; In the near future, relevant documents will be issued to support the development of the housing rental market, and a 100 billion yuan housing rental loan support plan will be set up to support some cities to pilot market-oriented batch purchase of stock housing and expand the supply of rental housing. Subsequently, the relevant departments drafted the Action Plan for Improving the Balance Sheet of High-quality Housing Enterprises. | Vanke A, Poly Development, China Merchants Shekou, Gemdale Group, Jinke Co., Ltd., Binjiang Group, Xincheng Holdings, Greenland Holdings, Sunshine City, Poly Fa, China Merchants Surplus |
| Post-cyclical plate | 10% | The real estate industry policy supports "promoting industry mergers and acquisitions", and real estate enterprises with advantageous financing, high investment intensity, excellent layout and market-oriented mechanism fully benefit. The National Development and Reform Commission said that in 2023, it will prioritize the recovery and expansion of consumption, supporting consumption such as housing improvement. Policies support "housing improvement", and demand for consumer building materials, homes, furniture, home appliances and other post-cyclical sectors is expected to bottom out. | Jitai Co., Ltd., Oriental Yuhong, Sente Co., Ltd., Huaxin Cement, Fillinger, Del Future, Mousse Co., Ltd., Daya Shengxiang, Kangxin New Materials, Gujia Home Furnishing, Zhongyuan Home, Jiangshan Opai, Hisense Vision, Jiuyang Co., Ltd., Zhejiang Meida, Rainbow Group, Aokema | |
| Digital economy | Information Creation | 10% | In the report of the 20th National Congress, "security" and "technology" were placed in a more prominent position. Under the leadership of party and government departments, eight key industries such as finance, telecommunications, electric power, and transportation have also accelerated the pace of independent and controllable efforts. Compared with party and government electronic office, the value and complexity of government and industry applications are expected to usher in a significant increase, and the construction of information and innovation application ecology is expected to become the focus of the development of domestic information and innovation industry in the next few years. Document No. 79 of 2022 guides the development and progress of the state-owned information and innovation industry, adds quantitative requirements for 2023, and is expected to have more orders and policies around the two sessions. | China Great Wall, Dongfang Tong, Runhe Software, Inspur Information, Baoxin Software, Dingjie Software, Yonyou Network, Zhongwang Software |
| Digital infrastructure | 10% | The Ministry of Industry and Information Technology and other 16 departments "Guiding Opinions on Promoting the Development of the Data Security Industry": By 2025, the scale of the data security industry will exceed 150 billion yuan, with a compound annual growth rate of more than 30%; Support qualified data security enterprises to enjoy preferential policies such as software and integrated circuit enterprises and high-tech enterprises; Accelerate the cross-integration and innovation of data security technology and emerging technologies such as artificial intelligence, big data, and blockchain. The 14th Five-Year Plan for the Implementation of the Strategy for Expanding Domestic Demand regards the construction of new infrastructure as the "foundation for the development of the digital economy". It involves 5G, artificial intelligence, big data, Internet of Vehicles, etc. | Zhewen Internet, OneNet, Huayang Lianzhong, Digital Authentication, Qitian Technology, Shensi Electronics, Desheng Technology, Jincai Internet, Digital Government Communication, Chutianlong, Zhidu Shares, Yuyin Shares | |
| Car | New energy vehicles | 10% | The China Banking and Insurance Regulatory Commission stressed that it will continue to play an important role in supporting financial funds in bulk consumption such as automobiles. The National Development and Reform Commission said it will support consumption such as new energy vehicles in 2023. The National Energy Administration's "Blue Book on the Development of New Power Systems (Draft for Comments)" solicits comments: The transportation sector vigorously promotes the comprehensive replacement of traditional energy vehicles by new energy and hydrogen fuel cell vehicles. The State Administration of Taxation will continue to introduce more new measures to facilitate private tax administration to ensure the implementation of a series of tax support policies such as the car purchase tax exemption policy | Keda Manufacturing, Shengxin Lithium Energy, Enjie Co., Ltd., Xingyuan Material, Tianci Material, BYD, Ganfeng Lithium, Great Wall Motor, GAC Group, Changan Automobile, Tuopu Group, Zhongding Co., Ltd |
| consume | Baijiu | 10% | Combined with the current epidemic trend in various places, the progress of payment collection in the opening red, the inventory price order, etc., and considering that the market has full pessimistic expectations for the opening red and the Spring Festival sales, the Spring Festival sales trend is expected to be better than the market expectations. At present, when entering the peak season preparation period, it is necessary to pay attention to the channel payment situation, inventory pressure and price changes; In the long term, we need to pay attention to the pace of consumption repair under policy fluctuations, and there may be some pressure in the first quarter or at the reporting end. The industry recovery is likely to start in Q2. | Drunkard wine, Jinhui wine, golden seed wine, Jinshi Yuan, Shede wine industry, Gujing Gongjiu, Shunxin agriculture, Luzhou old cellar, Shuijingfang, Kouzi cellar, Shanxi Fenjiu, Yingxing tribute wine, Wuliangye |
| aviation | 10% | Approaching the Spring Festival holiday, fundamentals are expected to usher in substantial improvement. The Civil Aviation Administration of China said that it will strive to recover to the pre-epidemic level of about 75% this year and strive to achieve breakeven; Strive to have 258 certified transport airports by 2023; Lift load factor restrictions and other control measures to restore the international aviation market in a sound and orderly manner | Shanghai Airport, Juneyao Air, CITIC Haizhi, Xiamen Airport, China Eastern, Air China, Baiyun Airport, China Southern Airlines | |
| Department stores | 10% | Benefiting from the advent of holidays such as New Year's Day and Spring Festival and the boosting effect of consumption voucher issuance in some regions, the overall performance of the retail sector is still relatively good. From the perspective of subdivision tracks, optional products such as gold jewelry and alcohol chains with increased consumer demand have greater potential. | Suning Tesco, Easyhome, Yonghui Supermarket, ZTE Commercial, Zhongbai Group, Hualian Shares, Shandong Gold, China Gold, Chow Tai Fook, Chow Dasheng, Chao Hongji | |
| Medical beauty | 10% | At present, the domestic medical beauty industry is still in the early stage of development, and new materials are expected to create new demand by educating consumers with differentiated efficacy. Light medical aesthetic items are non-general anesthesia medical aesthetics, which are less affected by policies than surgery; Moreover, the demand for medical beauty consumption suppressed by the epidemic in the early stage has not disappeared but been postponed, and consumption is expected to rebound after recovery. In the long run, under the compliance of policy supervision and compliance, accelerate industry integration, promote the healthy development of the industry, and concentrate market share to leading enterprises | Meditech, Samsung Medical, Yibai Pharmaceutical, Sinopharm Hyundai, Nanjing Pharmaceutical, Buchang Pharmaceutical, Fosun Pharma, Jimin Medical, Jingfeng Pharmaceutical | |
| Military | Military equipment | 10% | Ukraine took the initiative to increase the fight against Russia after getting the latest military aid and arms, legislating to allow foreigners to participate in the Ukrainian army, the Ukrainian defense minister said that "Ukraine is a de facto NATO member", and the Donetsk war continued. Except for epidemic prevention and visa in China, Japan and South Korea; On the issue of North and South Korean nuclear missiles, East Asia is ostensibly calm. However, the strategic intention of the United States to deliberately support Japan (including Taiwan) to provoke trouble has been clear, and Japan and Britain "can send troops to each other" is the first thorn. In the context of economic recovery, China will be more resolute in responding to external provocations | AVIC Electronics, Hongda New Materials, Aerospace Communications, Aerospace Power, Sichuang Electronics, China Satellite, Aerospace Changfeng, Gaussian Bell, CSSC Defense, Kailong Shares, Guangwei Composite Materials, Bangyan Technology |
Note: This table subjectively screens the sectors suitable for attention in the short and medium term in the future according to the market situation, shows our prediction of the value of sector allocation through the "allocation plan", and reflects our thinking on the current market trend through the "market heat". This table does not provide guidance on the allocation of capital positions.
Risk warning: The content of the review is for reference only and does not represent any advice and basis for anyone.
Investors do so at their own expense and risk. The stock market is risky, trade with caution!