Ping An Securities: Subsidy policies for mobile phones and other devices are released, optimistic about the replacement cycle under the background of AI.

Ping An Securities released a research report stating that national subsidies and regional subsidies range from 10% to 20%. Subsidies are beneficial for reducing consumer purchasing costs and stimulating the demand for mobile phone purchases. With the continuous increase in the global penetration rate of AI smartphones, although there has not yet been a truly heavyweight AI application, Android manufacturers have already laid out AI applications in advance around three major categories of commonly used functions: AI imaging, intelligent calling, and intelligent search. Apple has the performance-leading self-developed A-series and the IOS ecosystem has also laid a more solid foundation for AI applications. It is expected that in the future, based on the ecosystem's enhanced integration of software and hardware, a multi-dimensional approach will be used to strengthen the foundation of AI hardware and software. Event: On January 8th, the National Development and Reform Commission and the Ministry of Finance issued a notice regarding the implementation of large-scale equipment renewal and consumer old-for-new policy by 2025, providing subsidies for the purchase of new digitalequipment such as mobile phones. Key points of Ping An Securities: Subsidies for the purchase of new mobile phones, with each subsidy not exceeding 500 yuan On January 8th, the National Development and Reform Commission and the Ministry of Finance issued a notice regarding the implementation of large-scale equipment renewal and consumer old-for-new policy by 2025, providing subsidies for the purchase of new digital products such as mobile phones. According to the notice, individual consumers purchasing smartphones, tablets, smart watches, and bracelets, among three types of digital products (with a single retail price not exceeding 6000 yuan), will be subsidized by 15% of the product's selling price, with each consumer able to subsidize one item for each product type, with each subsidy not exceeding 500 yuan. Before this, regions such as Jiangsu and Guizhou had also introduced some regional subsidies: 1) Jiangsu Province: The subsidies are aimed at individual consumers. The subsidized range includes smartphones, tablets, digital cameras, and other 3C digital products. The subsidy standard is 15% of the product's transaction price, and could be discounted up to 1500 yuan at the highest. The activity took place from November 27th, 2024 to December 31st, 2024, and ends when the subsidy limit is reached. 2) Guizhou Province: The subsidies are aimed at individual consumers. The subsidized range includes smartphones, tablets, and other 3C digital products. The subsidy standard is 20% of the product's transaction price, but limited to domestic smartphones and tablets under 3000 yuan. Each customer can buy only one smartphone or tablet, with a maximum discount of 600 yuan per item, and a maximum discount of 2000 yuan per item for laptops and home appliances. The activity took place from December 1st, 2024 to December 31st, 2024. 3) Jiangxi Province: The subsidies are aimed at individual consumers. For consumers who purchase smartphones and tablets from participating merchants, a subsidy of 15% of the final transaction price will be provided, with each subsidy not exceeding 1000 yuan. Each consumer is limited to participating once (can only buy one smartphone or one tablet). Coupons are available starting at 10:00 am each day, and are valid on the same day. The number of coupon amounts is limited, and will be given out on a first-come, first-served basis. In summary, the national and regional subsidies range from 10% to 20%, and the subsidies are beneficial for reducing consumer purchasing costs and stimulating the demand for mobile phone purchases. The rise of mobile big models is on the horizon, with the continuous increase in the global penetration rate of AI smartphones With the rapid development of generative AI technology and the continuous increase in computing power, in order for AI to achieve large-scale expansion and maximize its technological potential, it must rely on the coordinated work of cloud and end devices. Looking into the future, the scale of AI inference will far exceed that of AI training, with the cost disadvantage of cloud inference becoming prominent. By diverting AI computing workloads from the cloud to the end devices, it will bring cost, energy consumption, and performance advantages. The focus of AI development is shifting towards end devices such as smartphones and PCs. Currently, many flagship Android smartphones, including the Vivo X100 series, OPPO Find X7 series, etc., have already implemented LLM with 7 billion parameters. In order to meet the demand for larger-scale local deployment of LLM, flagship mobile phone SoCs will upgrade their AI computing capabilities as their main direction. The global penetration rate of AI smartphones continues to increase. According to IDC's forecast, with the rapid iteration of new chips and user scenarios, coupled with the accelerated development of mobile big models, the next generation of AI smartphones is expected to enter a rapid growth phase starting from 2024. It is estimated that the global shipments of AI smartphones will reach 234 million units in 2024, and is expected to increase to 827 million units in 2027, with a compound annual growth rate of 100.7% from 2023 to 2027. In terms of the domestic market, it is estimated that by 2024, the shipments of AI smartphones in China will reach 40 million units, and is expected to increase to 150 million units by 2027, accounting for 51.9% of the overall market share of smartphones in China, with a compound annual growth rate of 96.8% from 2023 to 2027. Investment Recommendations: Focus on the increase in AI smartphone penetration rate It is recommended to pay attention to companies in the industry chain such as Luxshare Precision Industry (002475.SZ), Goertek Inc. (002241.SZ), Lens Technology (300433.SZ), Lingyi Itech (002600.SZ), Suzhou Dongshan Precision Manufacturing (002384.SZ), Avary Holding (002938.SZ), Zhuhai CosMX Battery (688772.SH), Shenzhen Sunway Communication (300136.SZ), Shenzhen Pacific Union Precision Manufacturing (688210.SH), etc. Risk Warning: 1) Product technology update risk: The electronics industry products are updated rapidly, with new technologies and processes emerging constantly. If a company cannot continuously update competitive products, it will weaken the company's competitive advantage; 2) Macroeconomic fluctuation risk: If the global economic growth rate slows down, market demand will inevitably slow down or even shrink. The decline in global consumer electronics demand is expected, and the recovery of the semiconductor industry may be slower than expected; 3) Trade friction risk: If trade protection policies are implemented regionally, it may potentially affect related public companies.Performance of the department has an impact.Bonjour, comment a va aujourd'hui?