Brokerage Morning Meeting Highlights | 3C Equipment Demand May Enter an Upward Cycle

Yesterday, the market fluctuated throughout the day, with the ChiNext Index leading the decline. The total turnover of the Shanghai and Shenzhen markets was 1.19 trillion yuan, a decrease of 161.9 billion yuan from the previous trading day. In terms of the market, the hot spots were chaotic, with more stocks falling than rising, and over 3500 stocks in the entire market fell. In terms of sectors, the Little Red Book concept, photovoltaic equipment, TikTok concept, and tourism sectors led the gains, while other sectors such as power equipment, new stocks, oil and gas, and PCB led the declines. At the close, the Shanghai Composite Index fell by 0.43%, the Shenzhen Component Index fell by 1.03%, and the ChiNext Index fell by 1.82%. At today's brokerage morning meeting, China Securities Co., Ltd. pointed out that demand for 3C equipment may enter an upward cycle; CICC stated that the Federal Reserve may still cut interest rates twice in the first half of this year; CITIC SEC stated that the accelerated landing of terminal AI applications may lead to a simultaneous increase in volume and price in the PCB sector. China Securities Co., Ltd.: Demand for 3C equipment may enter an upward cycle China Securities Co., Ltd. pointed out that in 2024, with the launch of Vision Pro and AI systems, Apple will usher in CEO Cook's "year of innovation." For 3C equipment, due to the software iteration being the main driver of innovation for Apple in 2024, the demand for hardware driven by hardware iteration is limited, and the demand for 3C equipment is relatively stable. However, the new AI system and MR new series released will lay a good foundation for the next round of innovation cycle. Looking ahead to 2025 and beyond, with the accelerated iteration of hardware modules and the continuous advancement of production line automation, the demand for 3C equipment in 2025 is worth looking forward to, and subsequent new products and hardware iterations are expected to continue, leading to a possible upward cycle in the demand for 3C equipment. CICC: The Federal Reserve may still cut interest rates twice in the first half of this year CICC stated that the month-on-month core CPI increase in the United States in December slowed from 0.3% in the previous month to 0.2%, and the year-on-year increase slowed from 3.3% to 3.2%, both below market expectations. The most watched non-rental service inflation by the Federal Reserve has fallen, while core goods and rental inflation remain moderate, with no signs of re-acceleration. Despite strong non-farm payrolls last Friday, inflation continues to slow, indicating that the economy has not shown signs of overheating. This is good news. U.S. bond yields fell and U.S. stocks rebounded. CICC maintains its previous judgment that the United States is likely to achieve a "blonde" economy, and the market may have overestimated the upward risk of inflation in the United States. CICC believes that there is a high probability that the Federal Reserve will skip a rate cut in January, but there is still a possibility of a rate cut in March. CICC maintains its view that the Federal Reserve may still cut interest rates twice in the first half of this year. CITIC SEC: The accelerated landing of terminal AI applications may lead to a simultaneous increase in volume and price in the PCB sector CITIC SEC pointed out that the AI wave is surging. Overseas, on the cloud side, NVIDIA's GB200 is accelerating shipments, GB300 is entering the countdown to release, and under the trend of diversified computing power, Amazon, Google, and AMD-related computing power products are entering a volume phase; domestically, the demand for domestic computing power continues to expand, and with product iteration and upgrades, 2025 is expected to accelerate volume. On the terminal side, AI has reached a critical node in landing, and wearable devices such as AI smartphones and AI glasses are expected to enter a period of accelerated volume. As the AI industry closes the loop, the industry will gradually enter a virtuous cycle. CITIC SEC believes that the benefit logic of the PCB industry will continue in the cloud side and gradually expand to the terminal side. In terms of the cloud side, the AI server and switch/optical module PCB market are rapidly expanding, with clear HDI trends, broad space for domestic replacement in packaging substrates, and manufacturers with leading technology, production capacity, and active cooperation with large customers are expected to benefit first. On the terminal side, the accelerated landing of terminal AI applications may bring a simultaneous increase in both volume and price in the PCB sector, CITIC SEC is optimistic that leading companies in the fruit chain will fully release profit elasticity. This article is reprinted from "Cai Lianshe", edited by GMTEight: Xiao Yi Chen.