Mobile phone camera module shipments prices increased

With the concentrated release of new products by a number of terminal brand manufacturers in the second half of the year, and the increasingly hot competition in the high-end mobile phone market, mobile phone upstream industry chain manufacturers have also ushered in a long-lost rebound market recently.

After mobile phone camera module (CCM) supplier Ofilang (002456.SZ) was reported to have received an order from Huawei in the capital market, mobile phone camera module leaders Sainwoo Optical Technology (02382.HK) and Qiuti Technology (1478.HK) also ushered in a rebound in their share prices.

Recently, Sainty Marine Optical Technology announced that in September mobile phone lens (HLS) and mobile phone camera module shipments increased by 16.9% and 41.4%, respectively.

"China Business News" reporter noted that before Sainy Optical Technology released September product shipments, institutions have been optimistic about Sainy Optical Technology mobile phone lens, camera module market shipments are rebounding, at the same time, multiple sources pointed out that the unit price of mobile phone optical products is also rebounding, does this mean that the industry as a whole is picking up?

Gao Hongxiang, senior research manager of IDC global professional foundry and display industry research team, said in an interview with a reporter from China Business News that from the point of view of supply and demand, the overall demand side has not recovered significantly, and the upstream component price rise is mainly driven by the component manufacturers want to stop their losses. In addition, due to the intensified competition of some downstream mobile phone manufacturers in the second half of the year, orders have rebounded, and some components can be seen in the price increase.

Shipments increased and prices stabilized

On the evening of October 11, Sainty Marine Optical Technology announced the shipment of major products in September, showing that the shipment of mobile phone lenses was 112 million pieces, an increase of 16.9%; The shipment of mobile phone camera modules was 52.238 million units, up 41.4% year-on-year. Shares of Sainty Marine Optical rose 12.23 per cent on the day.

In fact, since May, Sainty Marine Optical Technology mobile phone lens shipments began to increase year-on-year, but the stock price has not been greatly boosted.

On October 11, Haitong International released a report, raising the forecast of Sainyu Optical Technology's net profit this year from 1.034 billion yuan to 1.426 billion yuan, and raising the forecast of Sainyu's net profit next year from 1.693 billion yuan to 2.34 billion yuan. The report mentioned that Sainty Marine has been in a trough in the first half of this year, in the case of improved demand and a low comparison base, with the price increase of camera modules and mobile phone lens products, it is estimated that its earnings will improve.

Sainty Marine Optical joined Apple's supply chain in 2020, starting to supply lenses for ipads and Macs in the first half of 2021, and mobile phone lens modules for iphones in the second half.

In the view of some institutions, Sainy Optical technology shipments are driven by the traditional peak season of the consumer electronics market, and major terminal manufacturers have launched new products.

On October 11, Tianfeng International Securities analyst Guo Ming𠫓¹ also issued a document, benefiting from Apple iPhone and Huawei orders, Sainty Marine Optical Technology is expected to achieve double-digit growth in mobile phone lens and camera module shipment demand in the fourth quarter (compared with the third quarter of 2023), showing the bottom of the cycle

In addition, Guo Mingd «“¹ also mentioned that due to the need to replenish the inventory of Android phones, the Chinese mobile phone market is expected to restart in the fourth quarter of this year

Not only Shun Yu Optical Technology, Lin Enping, chairman of Da Li Guang, also said at the law meeting on October 12 that the demand for new high-end models of customers was better than expected, and began to chase orders, the momentum of pulling goods in October was better than in September, November was also better than in October, compared to the previous quarter, the overall high-end lens demand was warm.

In fact, in the past, by the terminal brand cut orders, the overall shipments of smart phones decreased year-on-year impact, upstream parts manufacturers to stimulate the terminal brand will pull goods, the price of the overall parts of the mobile phone has fallen, and the product unit price of mobile phone camera lenses and modules has continued to decline. Now, some mobile phone parts have begun to raise prices, to a certain extent, is also one of the important signals of the market recovery.

Haitong International Research pointed out that the supply chain survey shows that most camera module manufacturers have raised the price of camera modules for Android (Android) customers by 4% to 6%. For mobile phone lenses, the more reasonable pricing environment and the arrival of the new CIS (image sensor) also saw the price increase of many mid-to-high end lens SKUs (minimum stock units).

In addition, Guo Ming𫠓¹ also said that the price of some lenses and camera modules of Sainwoo Optical Technology has risen (such as the 5P price has risen by 20%), and the cycle trough has passed

Oriental Securities research report pointed out that the mobile phone camera module downregulation downallocation trend will stop, the number of mobile phone cameras, the main camera configuration and the penetration rate of high-end camera modules such as the hidden view will increase, which will bring an inflection point for the mobile phone camera module industry prosperity, and mobile phone camera module and component suppliers are expected to benefit from it.

The terminal decline has slowed down, and some manufacturers are still cautious

It is worth noting that from the perspective of terminal product market shipments, the recovery trend of the entire industry is still weak, and the smartphone market continues to decline, but the decline is slowing down and has begun to show signs of stabilization.

Market research agency Canalys recently released the latest data pointed out that in the third quarter of 2023, the global smartphone market fell only 1%, and the decline has slowed down. Driven by regional recovery and demand for new product upgrades, the global smartphone market achieved double-digit sequential growth in the third quarter before the peak season.

Canalys analyst Liu Yixuan further noted: "New product launches from Huawei and Apple ignited the market during the quarter, overshadows updates to many vendors' flagship series. Huawei's new Mate series, which is equipped with the latest Kirin chip, has aroused a warm response from consumers in China. Carriers are racing to stock Huawei equipment to meet the surge in demand. At the same time, Apple is beefing up its new iPhone 15 series with better performance and features to keep stimulating demand. In addition, Samsung is reducing its focus in the entry-level market to continue to ensure profitability; Xiaomi and Transsion quickly seized on the rebound in emerging markets, offering competitive products and channel cooperation strategies. If Xiaomi and Transsion can successfully continue their strategy, these short-term gains could turn into sustainable growth opportunities."

The market decline has eased, to a certain extent is a precursor to a better market, but there are still manufacturers remain cautious, Canalys forecast points to a slowdown in the medium and long-term growth of the smartphone market.

Zhu Jia Tao, an analyst at Canalys, said, "Vendors should remain cautious about the market rebound. Global macroeconomic and geopolitical uncertainties make the recovery and channel operations in emerging markets exceptionally fragile. Careful monitoring of inventory turnover and end demand is essential to avoid turbulence from high inventories."

Mr. Zhu also noted that "manufacturers are strategically re-establishing their channels and component inventories to cope with potential demand recovery and supply chain cost increases." The current surge in short-term orders is accompanied by structural component shortages that may result from previous reductions in supply capacity, posing planning and production challenges."

Terminal active stocking, a variety of parts now price trend

Not only are the prices of mobile phone camera lenses and modules rebounding, but the prices of mobile phone parts such as memory and panels are also stabilizing.

Zhou Hua, chief analyst of CINNO Research, said that entering September, driven by the traditional peak season of the third quarter, the demand for various mobile phone panels is still strong, and the supply shortage of some products is not reduced, especially LTPS (low temperature polysilicon, a kind of LCD panel) and flexible AMOLED panels are the most significant. Among them, LTPS head manufacturers have successfully raised prices on low-cost products of the brand; The main manufacturers of flexible AMOLED panels will also gradually start to increase the price of low-cost products in order to recover long-term cash flow losses; a-Si panel South China market demand continues to be strong, some panel manufacturers in the South China market to increase prices slightly.

"In the first half of this year, the market was sluggish, and many orders received by upstream manufacturers were losing money, so when downstream demand began to increase, parts manufacturers no longer wanted to lose money, so they began to raise prices." Gao Hongxiang analysis to reporters, the current downstream consumer demand as a whole is still relatively weak, but due to increased competition from terminal manufacturers, especially Huawei 5G return competition, coupled with millet and Transtone are increasing the competition in the Indian market, but also driving upstream components shipments, driving component product prices to rise.

And Gao Hongxiang still predicted to reporters, "Huawei's total shipments this year will not increase too much, it is estimated that it will increase by 7% to 8% over the same period last year, but because Huawei's shipment target volume next year will be very large, for this reason in the active stock, the demand for parts is also a lot."

In fact, with the release of Huawei and Apple new products and the increasingly fierce competition in the high-end mobile phone market, the share prices of many upstream industry chain manufacturers have rebounded and ushered in a long-lost market. Recently, Oufei Light harvested six boards in the capital market, and the news pointed to receiving a large number of Huawei camera module orders. Qiu titanium Technology stock price also changed the continued downturn ushered in a rebound, although Qiu titanium Technology in September mobile phone camera module still declined year-on-year.

Fingerprint recognition chip leader Hutop Technology (603160.SH) stock price not only rebounded, but also was sent to agents and customers notice of price increases. However, Huiding Technology later responded to the rumors of price increases circulating in the market in the transaction announcement, saying that the company's optical fingerprint chip under the screen did not issue a price increase notice letter to agents and customers.

Benefiting from the stabilization of downstream consumer electronics shipments, some upstream industry chain enterprises disclosed the third quarter performance also has a good trend, such as Lens Technology (300433.SZ) achieved double growth in revenue and net profit in the third quarter, Lishun Precision (002475.SZ) also predicted a profit of 2.685 billion yuan to 3.325 billion yuan in the third quarter. Year-on-year growth of 2.61%~27.08%.