Hong Kong Stock Concept Tracking | "Replacement" demand accelerates released, national compensation on-line first day mobile phone sales increased by 200% month-on-month, institutions bullish on these stocks (with concept stocks)

On January 20th, the new subsidy for mobile digital purchases landed on JD.com. National subsidy activities in Beijing, Hubei, Jiangsu, Zhejiang, and Shaanxi have all been fully launched on JD.com, with activities in other provinces and cities gradually going online. JD's data shows that as of 12:00 on January 20th, in provinces and cities where the national subsidy has been launched, mobile phone sales increased by 200% compared to the previous period, tablet sales increased by 300%, and smart children's watch sales increased by 100%. The data shows that when consumers on JD.com enjoy the national subsidy to purchase mobile digital products, they prefer mobile phone products in the 3000-4000 yuan price range, tablets in the 3000 yuan price range, smart watches in the 500-1000 yuan price range, and smart bracelets in the 200-300 yuan price range. At the same time, REDMI K80, iPhone16, OnePlus Ace5, Xiaomi 15, OPPO Find X8, iQOO Neo10, and Honor Magic7Pro have become the best-selling mobile phone products; iPad (10th generation), iPad Air 11 inch, and HUAWEI MatePad Air 12 inch 2024 model have become the best-selling tablet products; the best-selling smart watches include Apple Watch Series 10 and HUAWEI WATCH GT4, while the Little Genius Z6Pro children's phone watch has become the most popular product among children's smart watches. Recently, the Office of the Ministry of Commerce and 5 other departments issued a notice on the implementation plan for the new subsidy for the purchase of mobile phones, tablets, and smart watches (bracelets). The plan mentions that individual consumers can enjoy the new subsidy when purchasing three types of digital products (single unit sales price does not exceed 6000 yuan), with a subsidy of 1 unit per person per category. The subsidy amount is 15% of the final sale price after deducting all discounts from production, distribution, and mobile operators, with a maximum of 500 yuan per unit. For consumers, the subsidy in cash is undoubtedly a good opportunity to make a purchase. And in order to obtain the redit of the subsidy, major mobile phone manufacturers are also seizing the market through further price reductions or promotions. Mobile phone manufacturers have responded to the "national subsidy" plan one after another. For example, OPPO announced that the Find X8 series will join the "national subsidy" plan, saving up to 800 yuan; Honor's "New Year Festival" discounts combined with the "national subsidy" offer discounts of up to 1500 yuan. Research firm Counterpoint, when talking about the impact of the mobile phone subsidy policy on the domestic mobile phone market, stated: "This policy has accelerated consumer replacement cycles, especially in the mid-to-high-end models priced between 3000 5000 yuan. It is expected that in the first quarter of 2025, mobile phone shipments in the Chinese market will reach 75-80 million units, an annual increase of more than 10%; actual sales may exceed 80 million units." Looking at the overall mobile phone industry, the total shipment volume of the mobile phone market in China in 2024 is approximately 286 million units, a year-on-year increase of 5.6%, rebounding after hitting bottom two years ago. During the first half of 2024, there was a noticeable release of consumer demand driven by technological innovations such as GenAI (Generative Artificial Intelligence), screens, and battery life; however, in the second half of 2024, especially close to the end of the year, market demand gradually slowed down. According to CINNOResearch's forecast, with the effective promotion of the trade-in policy, the future market sales of smart phones are expected to maintain stable growth, with annual sales expected to reach 312 million units in 2025, an increase of 4%. Sinolink believes that the subsidy of 15% off the price after the original discounts (up to 500 yuan) is a substantial subsidy, stimulating the subsidy plan to drive the recovery of the consumer electronics market in 2025. Morgan Stanley stated that the subsidy reiteration will be a short-term positive catalyst for smart phone OEMs and supply chains, and expects Xiaomi, SUNNY OPTICAL, AAC TECH, BYD ELECTRONIC, and Q TECH to be the major beneficiaries. China Securities Co., Ltd. stated that the consumer electronics industry has entered a new upward cycle in 2025, and in the long term, the growth logic for AI terminals is clear, with the penetration rate of edge-side AI expected to increase significantly in the next year, becoming the biggest driver for the development of the consumer electronics industry. Related concept stocks: ZTE Corporation (00763): In mid-January, Goldman Sachs released a research report maintaining a "neutral" rating on ZTE Corporation (00763) and raising the target price by 14.3% to 28.8 Hong Kong dollars. The firm is optimistic about the growth potential of ZTE Corporation in non-telecommunications fields, but sees short-term unfavorable factors as China's telecommunications companies slow down capital spending in the mid-to-late stages of the 5G investment cycle. The firm is optimistic about the growth potential of ZTE Corporation supported by diversified new businesses and continued technological development. Therefore, the group's earnings forecast for 2025-2026 has been raised by 0.5%, 2.5%, and 2.1% respectively, while ZTE Corporation's revenue for 2025-2026 has also been raised by 0.9%, 1.6%, and 2.3% respectively. AAC TECH (02018): In early January, Lyon released a research report stating that the National Development and Reform Commission announced the expansion of the trade-in subsidy measures to cover more digital products, including mobile phones, tablets, and smart watches/wristbands. The report believes that the Android supply chain, with higher fixed costs, should be more sensitive to this policy, and recommends XIAOMI-W (01810), BYD ELECTRONIC (00285), AAC TECH (02018), and SUNNY OPTICAL (02382) as "outperforming the market". SUNNY OPTICAL (02382): In mid-January, Citi released a research report stating that SUNNY OPTICAL's performance in 2025 will be mainly determined by specificationsUpgrade and expand the development of augmented reality business, with a target price of 67 Hong Kong dollars, rated as "Buy". The company's management team expects that the upgrade will start with high-end products, and the launch of new AI smartphones will also help to drive component upgrades, leading to an improvement in the gross profit margin/average selling price of the mobile phone products. As a result, the yield is expected to increase, and it is estimated that the competitive environment will remain stable in 2024-25.Q TECH (01478): In mid-January, CICC released a research report stating that it maintains a "outperform" rating for Q TECH (01478), optimistic about the profit improvement brought by the upgrade of mobile phone optics in 2025 and the growth of the automotive business. The target price was raised by 32% to HKD 6.42. XIAOMI-W (01810): In early January, CITIC SEC released a research report stating that it maintains a "buy" rating for XIAOMI-W (01810), with a target price of HKD 42. Looking ahead, the bank sees Xiaomi continuing to be the best hardcore technology ecosystem company in China and even globally, with continued vitality in a wider range of areas such as AI smartphones, smart cars, smart homes, AI big models, AI glasses, and embodied intelligence.