Bank of China International: lifting the EDA ban and the US-Vietnam trade agreement is good for the consumer electronics supply chain in the short term.

Bank of China International stated that against the backdrop of the lifting of the EDA ban in the United States and the US-Vietnam trade agreement reached on the same day, investor sentiment has turned favorable towards the previously sluggish consumer electronics industry. Although the stock prices of many consumer electronics companies are still below the levels before April 2, the bank believes that with the upcoming second quarter performance for 2025 expected to exceed expectations due to limited impact of actual tariffs and early stocking by American customers, the current uptrend still has room for further growth. The bank pointed out that the stock prices of most consumer electronics companies are still below the levels of April 2. Taking into account that 1) the short-term impact of tariffs on the industry's commonly used pricing model with markups is limited; 2) early stocking by American customers after the start of the tariff war may result in positive surprises in the second quarter financial reports of supply chain companies in 2025; 3) the positive sentiment boost from the lifting of the EDA ban and the preliminary US-Vietnam trade agreement, the bank believes that valuations will continue to recover. In the medium term, the bank believes that closely monitoring the evolution of tariff policy, the sustainability of demand, and whether the release of AR glasses can exceed expectations is crucial. Among supply chain stocks, the bank favors Sunny Optical, AAC Technologies, and BYD Electronics.