Huafu Securities: Under the empowerment of AI and the support of three-fold hardware form, foldable screen phones are accelerating their growth.

Huafu Securities released a research report stating that the Huawei Mate XT integrates the latest self-developed high-end materials and patented technologies, breaking the boundaries of smart device forms and accelerating the penetration of foldable screen phones. The Mate XT is equipped with Huawei's powerful AI technology, supporting AI expansion, AI elimination, AI cloud enhancement, and other AI smart experiences. The application of AI technology is expected to become a standard feature of foldable phones. With the combined support of AI technology and innovative forms such as three folds, the improvement of yield rates and price reductions, the overall penetration rate of foldable screen phones is expected to grow rapidly. Companies specializing in foldable device materials and components are likely to benefit significantly from its development. Huawei has released the world's first three-fold screen phone, the Mate XT. As the world's first three-fold phone, the Mate XT is leading the continuous innovation of foldable screen phone forms, opening a new era for three-fold screen phones. The release of this new product signifies Huawei's in-depth research and development in core hardware components such as screen materials and hinge design. The Mate XT's three-fold screen expands to 10.2 inches and becomes as thin as 3.6 millimeters when unfolded, thanks to Huawei's innovative use of multidirectional flexible materials to achieve an ultra-thin design. In addition to being thin, the Mate XT is also impact-resistant and tough, using non-Newtonian fluids and 322cm2 ultra-large UTG glass to form a composite super-tough structure, doubling the impact resistance performance by 75%. In terms of hinges, the Mate XT features the Tian Gong hinge system, allowing the hinge to bend internally and externally for the first time. Additionally, the core components of the hinge system use super strong rocket steel with a deformation resistance strength of 1900Mpa. The Mate XT integrates the latest self-developed high-end materials and patented technologies, breaking the boundaries of intelligent terminal forms and accelerating the penetration of foldable screen phones. With the combination of AI capabilities and three-fold hardware form factor, foldable screen phones are accelerating their growth. With the impressive performance of many brands, foldable screen phones are currently experiencing rapid market penetration. According to Counterpoint data cited by Cai Liangshe, global shipments of foldable screen phones are expected to increase from 13.1 million units in 2022 to 100 million units in 2027, with a CAGR of 50.6% from 2022 to 2027. China has become the largest market for foldable screen phones globally, with CINNO Research data showing that in 2Q4, China's sales of foldable screen phones reached 2.62 million units, with year-on-year growth of 125% and a sequential increase of 11%, marking the fourth consecutive quarter of triple-digit year-on-year growth. The rapid development of foldable screen phones will drive the development of core components such as flexible OLED, screen covers, and hinges in the industry chain. According to UBI Research data cited by Jiwei Net, the shipment of OLED panels for foldable phones will reach 9.94 million pieces by 2024, accounting for 5.2% of the total OLED shipments for smartphones in 2Q4, the second-highest in history. According to CINNO Research data, approximately 1.1 million front covers with UTG technology were used for foldable phones in China in 2022, and this number is expected to grow at a CAGR of 65% to nearly 5 million units by 2025. Looking ahead, with the combined support of AI capabilities and innovative forms such as three folds, coupled with improvements in yield rates and price reductions, the overall penetration rate of foldable screen phones is expected to grow rapidly, and companies specializing in foldable device materials and components are likely to benefit significantly from their development. Investment recommendations: For cover materials, it is recommended to pay attention to the progress of domestication of core raw materials and processing technologies, with related companies such as Triumph Science & Technology (600552.SH), Wuhu Token Sciences (300088.SZ), and Rayitek Hi-Tech Film (688323) being potential candidates. For structural components, it is suggested to focus on the continuous iteration of related materials and supporting processing technologies, with companies like Sichuan Furong Technology (603327.SH), NBTM New Materials Group (600114.SH), Jiangsu Gian Technology (300709.SZ), Shenzhen Pacific Union Precision Manufacturing (688210.SH), Dongguan Golden Sun Abrasives (300606.SZ), and Yuhuan CNC Machine Tool (002903.SZ) as potential candidates. Risk warning: Technological developmentFalling short of expectations upon landing; terminal shipments falling short of expectations; downstream demand falling short of expectations; intensified market competition risk; geopolitical risk; industry prosperity falling short of expectations.Podras indicarme cmo llegar a la estacin de tren?