Zhong Xin Tech-Zhong Xin Tech

Looking back at 2017 and the first quarter of 2018, the overall electronics sector performed well, driven by the continuation of the semiconductor boom and the rise of domestic electronics brands. Especially in 2017, driven by the high economy of consumer electronics, the overall rapid growth of the sector. In 2017, the total operating revenue of the electronics industry was 959.383 billion yuan, with a year-on-year growth of 59.04%. The net profit attributable to the shareholders of the parent company was 59.9.11 billion yuan, with a year-on-year growth of 53.75%. The industry was in a high boom, the overall net profit of the industry grew rapidly, and the profitability of the company continued to improve. Q1 electronics industry in 2018 achieved a total operating revenue of 218.844 billion yuan, a year-on-year growth of 28.51%, realized attributable to parent shareholders net profit of 14.326 billion yuan, a year-on-year growth of 33.01%, the industry still maintained a high growth level in the first quarter. In terms of profitability, the gross profit margin of the electronics industry in 2017 was 22.34%, with a year-on-year growth of 2.23%. The increase in gross profit margin was mainly due to the price increase brought by product innovation in the whole industry, and the recovery of consumer electronics. And the high gross profit margin level was continued in Q1 2018, with 21.60%. The stock performance of Q1 electronics sector fell sharply in 2018, with only semiconductor materials and passive components achieving gains, while all other sectors fell by 2.34% to 15.28%. Since the electronics industry is relatively new and mainly technology-driven, r&d investment is crucial for enterprises to maintain their core competitiveness. In 2017, the r&d investment of the whole industry reached 57.099 billion yuan, up 64.55% year on year, and the R&D investment accounted for 5.95% of the business proportion, reaching the highest level in history. Continued high R&D investment is the key to the global competitiveness of electronics companies, and also gives us confidence in the future of domestic companies. The second half of the electronics sector bullish semiconductor and LED opportunities Looking ahead to the second half of the year, we believe that in the context of the trade war, the chip localization industry chain has medium - and long-term investment opportunities. In addition, we are optimistic about the LED industry, especially the investment opportunities brought by the downstream small-pitch LED screen and general lighting. Finally, we believe that automotive electronics are expected to be the next important force to promote the development of the electronics industry. Semiconductor localization is expected to drive the development of the whole industry chain: according to WSTS data, Q1's global semiconductor sales have increased for 18 consecutive months month-on-month, and the economy is still high. As sales of PCS and mobile phones slow down, the downstream drivers of the IC industry have begun to shift to emerging demands such as automotive electronics, AI and the Internet of things. The wave of foundries in mainland China is expected to drive the leapfrog development of the local industrial chain. Now China has become the world's largest semiconductor market, in strong demand and powerful. Small spacing LED screen and general lighting drive LED boom continued: THE LED industry has recovered healthy development after chip price decline and production cut by large factories. Since 16 years, the demand has been in short supply, and the concentration of the industry has gradually increased. According to CSA data, the ＆#118alue of general lighting market reached 204 billion yuan in 2016, accounting for 47.6% of the overall application market; In the display field, due to the rapid rise of small spacing LED display technology, it accounts for 12.8% of the overall application market. It is expected that in 2018, the LED industry is expected to maintain a high demand trend due to the increasing penetration rate of general lighting and the replacement of small spacing LED displays. The global semiconductor industry is high or sustainable The semiconductor industry has entered a business cycle again since the beginning of 2016, and the future business is expected to continue. According to WSTS data, global semiconductor sales in 2017 increased by 21.6% year on year, exceeding us $400 billion for the first time. As of 2013 Q1, global semiconductor sales have increased for 18 consecutive months on a month-on-month basis. In addition, a number of research institutions, including Gartner and WSTS, have raised the full-year semiconductor revenue growth rate to about 17 to 18 percent. Gartner's forecasts further indicate that investment in the global semiconductor industry will continue to grow sequentally from 2017 to 2019. Global semiconductor capital expenditure to rise 2.9% to $69.937 billion in 2017; It is expected to reach us $73.614 billion in 2018, with a growth rate of 5.3%; It is expected to reach $78.36 billion in 2019, up 6.4%. It can be seen that the global semiconductor industry is relatively optimistic about the development situation from 2017 to 2019. In 2017, the global semiconductor industry was booming, and we believe 2018 is expected to continue. Is the Internet of Things, automotive, medical and other applications. The mainland is playing the role of the third integrated circuit industry transfer undertaker Since Texas Instruments invented the world's first integrated circuit in 1958, the integrated circuit has developed rapidly, with a history of roughly shifting from west to east. Since the 1950s, the integrated circuit has experienced three stages of development, which are: the origin of invention in the United States, accelerated development in Japan, and differentiated development in Korea and Taiwan. The reasons for the previous two semiconductor industry transfers are different in the background of different historical periods: < p > (1) the first industry shift: the United States in search of lower processing costs, technology gradually extradition from America to Japan, the Japanese combines accumulation, home appliance industry at the time of the DRAM market for the United States recognized the PC, the PC industry during the 80 s, Japan in 1986, surpass the United States as the world's largest integrated circuit production country. (2) The second industrial transfer: Japan was affected by the economic crisis in the 1990s, and it was difficult to provide financial support for DRAM technology upgrading and wafer plant investment and construction. South Korea took the opportunity to become the new major PRODUCER of PC DRAM with the support of various conglomerates, while Taiwan took advantage of the Foundry model. In the wafer foundry, chip sealing test field to become the foundry leader. (3) The third industrial transfer: after 2000, the growth rate of computer declined, and the DIVIDEND of PC gradually faded. But since Apple released the first iPhone in 2007, the phone has gradually replaced the computer as the new driver of the integrated circuit industry. The Asia-Pacific region remains the largest market for semiconductor sales. According to WSTS data, the Asia-Pacific region (excluding Japan) accounted for 60.0% of global semiconductor sales in 2017, reaching us $248.8 billion; Sales in the Americas accounted for 21.3%, to $88.4 billion; Europe accounted for 9.2 percent, or $38.3 billion; Japan accounted for 9.3%, or $39 billion. In terms of sales growth, the Asia-Pacific (ex-Japan) region maintained rapid growth on a high sales base, with an annual growth of 19.4% in 2017; Sales in the Americas grew 35.0% year on year; Europe grew 17.1% a year; Japan grew at a slower rate of 13.3%. Today, China has become the world's largest consumer electronics production and consumption country, and the demand for semiconductors is increasing year by year. At the same time, China is also the world's largest semiconductor sales market. In 2016, China's integrated circuit industry has witnessed rapid development, with a market size of 119.859 billion yuan, an increase of 8.7% year on year. Both the scale and the growth rate continue to lead the world. According to statistics, in 2017, the growth rate of China's integrated circuit market is about 9.0%, the market size has reached 1305 billion yuan, is expected to continue to grow by 6.5% in 2018, the market size will be increased to 1,389.8 billion yuan. < p > although the semiconductor industry in China started late, compared with overseas leading company in technology has great difference between process and so on comprehensive strength, but China is relying on the huge market demand and strong policy support, is playing for the third time the role of the integrated circuit industry transfer to undertake, with China's semiconductor industry layout constantly improve, The shift of the integrated circuit industry to China is unstoppable.