21st Century Business Herald reporter Ni Yuqing Zhang Sainan Xi Li Wan Shenzhen and Shanghai report "Our company is planning to recruit Hongmeng developers, and we can feel the momentum of Hongmeng on the front line. The person in charge of the APP of a Shenzhen company said excitedly.
He said that since Huawei chose the "pure Hongmeng" route, not only Internet companies, but also some traditional companies are quite excited. The Android operating system is powerful but not perfect, and the industry expects Huawei to support more features.
The 21st Century Business Herald reporter learned from Huawei insiders that in addition to the mobile phone Hongmeng, the Hongmeng operating system on the PC side is close to completion. HarmonyOS is more independent and moving towards more terminals, which also means a new upgrade of Huawei's software industry chain.
Behind this is the stable fundamentals and accelerated return of Huawei mobile phones.
Ming-Chi Kuo, an analyst at Tianfeng International, pointed out in a report that looking forward to 2024, Huawei will launch the new high-end P series and Mate series, with an estimated purchase volume of 30 million to 40 million components. According to the latest data, Huawei's smartphone shipment target for next year has been raised to 60 million to 70 million units.
This not only provides a solid foundation for the software industry chain, but also brings more opportunities to the hardware supply chain. With the hot sale of Huawei Mate 60 series mobile phones, the popularity of A-share related hardware suppliers has also been driven. Looking back at 2023, a number of niche companies have attracted the attention of funds, such as Huali Chuangtong and OFILM, which have become star companies in Huawei's industrial chain. With the increase in the market's expectations for Huawei's new series of shipments, there is still more room for imagination in Huawei's industry chain.
For more Huawei industry chain companies, 2024 is worth looking forward to.
The manufacturing supply chain is picking up
2023 is a year of overall recession for consumer electronics, but Huawei's industry chain is unique in the industry and capital market.
Soon after Huawei launched the Mate 60 series, there have been many news of additional orders in the supply chain. A person close to Huawei's panel supplier said that related companies do have additional orders, "In 2024, BOE and Visionox will have more flexible OLED orders from Huawei than in 2023." ”
A chip design company told reporters: "Since October 2023, the release of new machines such as Huawei has led to the development of consumer chips, and we are still more optimistic about the recovery of the industry in the future." Another Huawei core supplier told reporters: "The performance in 2024 may have a more obvious recovery." ”
Some people in the industry chain told reporters that the price of some parts has increased by 30% because of Huawei's order. Benefiting from the promotion of popular products, the destocking of upstream suppliers has accelerated, and related parts suppliers have directly benefited.
The 21st Century Business Herald reporter combed through the third quarter reports of 34 major industrial chain companies of Huawei in 2023 and found that 25 companies achieved profitability in the first three quarters, accounting for more than 70%. Among them, five companies, including TCL Technology, Hanbo High-tech, and Huali Chuangtong, performed well, and the net profit attributable to the parent company increased by more than 100% in the first three quarters.
On a month-on-month basis, the recovery trend of the industrial chain is more obvious. Goodix, Xingsen Technology and OFILM's net profit in the third quarter increased sharply quarter-on-quarter, with an increase of 50 times, 15 times and 11 times respectively.
From the perspective of the mobile phone industry chain, the core hardware links are nothing more than panels, display modules, radio frequency devices, optical devices, chips, structural parts, acoustic parts, camera modules, glass covers, batteries, satellite communications, PCBs, etc.
In terms of panels, BOE's third quarter report for 2023 shows that the revenue in the third quarter was 46.337 billion yuan, a year-on-year increase of 12.65%, and the net profit was 286 million yuan, a year-on-year turnaround. BOE said in the conference call that in 2022, the shipment of flexible OLED panels will be nearly 80 million pieces, a year-on-year increase of more than 30%, and the annual flexible OLED panel shipment target in 2023 is more than 120 million pieces.
In terms of satellite communications, Huali Chuangtong is the biggest winner. In October, the company announced that it had received a total amount of purchase orders from a customer for 12 consecutive months with a total amount of about RMB 495 million, exceeding 100% of the company's audited main business revenue in 2022.
Huali Chuangtong is mainly engaged in satellite navigation and satellite communication core baseband chips in the field of satellite applications, which is an indispensable device for smart phones to realize satellite communication functions. Although the company is reluctant to say about the identity of this customer, various sources point to Huawei. From September to October 2023, within two months, Huali Chuangtong has received two orders from this customer.
Cameras are also expected to be upgraded. Ming-Chi Kuo revealed that Huawei will launch the P70, P70 Pro and P70 Art in the first half of 2024, and the series of mobile phones will be equipped with periscope cameras, and due to the use of its own Kirin chip, it is estimated that the shipments of the P70 series in 2024 will increase by 100% year-on-year.
In terms of cameras, OFILM has attracted the most attention, and its performance has improved significantly. In the first three quarters of this year, the revenue was 10.819 billion yuan, a slight decrease of 0.05% year-on-year, and the net profit loss was 299 million yuan, a year-on-year decrease of 91%. According to some news, OFILM's camera module has entered the supply chain of Huawei's mobile phone Mate 60 series, and accounts for the vast majority of the share, including rear cameras, front cameras, and fingerprint modules, with a single value of 500-600 yuan.
Overall, Huawei's Mate60 series mobile phones are back strongly, which is expected to continue to drive the consumer electronics industry chain to bottom out. Looking forward to 2024, market participants believe that Huawei's Mate60 series is expected to return to the mainstream echelon of mobile phones, bringing performance resilience to the consumer electronics industry.
Upgrading of the software industry chain
It is worth noting that Hongmeng has also led to the upgrading of Huawei's software industry.
It is understood that the HarmonyOS can be basically divided into two categories, the first is the consumer-oriented operating system and application development, led by Huawei, and the second is the industry-oriented application handed over to the OpenHarmony open source organization, absorbing major professional software companies to develop for specific industries, and Huawei will provide support.
First of all, the consumer-oriented market, it has been clear that HarmonyOS will no longer be compatible with Android in the future, forming an "independent" ecology, so developers need to develop applications for the HarmonyOS operating system alone, and in the past six months, major APP applications have continued to join, and each will start development based on the version of HarmonyOS NEXT.
On December 9, Yu Chengdong, Executive Director of Huawei, said at the 2023 Huawei Pollen Annual Meeting that Huawei will launch very leading, innovative, and disruptive products in 2024, and will launch products with HarmonyOS native applications and native experiences in 2024. According to Huawei's latest data, nearly half of the top 20 mobile Internet applications have started HarmonyOS native application development, including Meituan, Bilibili, Xiaohongshu, Weibo, AutoNavi, McDonald's, miHoYo, Qunar, etc.
Guotai Junan's computer team once pointed out in a research report: "After reviewing the development history of the operating system, we can find that once the market pattern of a certain track operating system is determined, there is almost no possibility for the latecomer to turn around." For example, Android is very strong on mobile phones, but it still can't compete in the PC market. If a new operating system can grasp the opportunity of the Internet of Everything and lower the threshold for the combination of software and hardware, then it is possible to cultivate a series of explosive innovative applications based on edge hardware, so as to grasp the right to speak in the industry ecology in the next ten or twenty years. ”
Obviously, Huawei will not be absent, but it will take a process to gradually transition to "pure Hongmeng". A software veteran analyzed to reporters: "Huawei has the confidence to decide not to be compatible with Android, which means that there is a comprehensive preparation and supporting industrial upgrading behind it." However, it should be noted that there are many levels of Android's business ecology, including development tools, application ecology, developer ecology, etc., in the process of Hongmeng incompatibility, the progress of operation compatibility and development compatibility needs to be further observed, which is a gradual process, not a rapid one-size-fits-all. ”
Secondly, for industry-oriented Hongmeng applications, iSoftStone and Chinasoft International are all partners. An iSoftStone insider told reporters that it has cooperated with Hongmeng for mining, electric power, etc., which is also iSoftStone's advantageous industry. Chinasoft International focuses on water conservancy and other fields, and Chinasoft International insiders told reporters that Chinasoft International hopes to form a benchmark in the industry and develop on the edge side, terminal side, and cloud side, which has a lot to do with Hongmeng's distributed capabilities.
According to a number of brokerages, among the listed companies in Huawei's Hongmeng ecological chain, the companies in the field of HarmonyOS include Runhe Software, Jiulian Technology, iSoftStone, Thunderda, Chuanzhi Education, ArcherMind Technology, and Tuowei Information;
However, the relevant persons in charge of many companies have said that the proportion of business revenue related to Hongmeng is not large, so the virtual and real in the Hongmeng software industry chain also need to be distinguished. But there is no doubt that Huawei is sparing no effort to advance software and fight for the future in the direction of product technology that integrates software and hardware.
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