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Hardware Technology - Stay defensive amid tech uncertainties

2019/6/11 6:10:25 来源:招商证券 作者: 人评论

作者:Kevin CHEN,Clint SU时光:2019年06月10日重要性:普通报告行业评级:公司评级:相干股票代码:浏览权限: 该文章钻石卡、金卡、银卡客户可浏览全文摘要:Report title:Hardware Technology - Stay defensive amid tech uncertainties Analyst:Kevin CHEN,Clint S…

作者: Kevin CHEN,Clint SU
时光: 2019年06月10日
重要性: 普通报告
行业评级:
公司评级:
相干股票代码:
浏览权限:   该文章钻石卡、金卡、银卡客户可浏览全文
摘要: Report title:Hardware Technology - Stay defensive amid tech uncertainties
Analyst:Kevin CHEN,Clint SU
Report type:Industry
Date:20190610
[Summary]

■ Recent news suggest possible easing of US sanctions on Huawei, but disruption and earnings revision are still likely for 2Q/3Q19
■ Prefer Telecom names as defensive play; maintain BUY on China Unicom (762 HK), China Telecom (728 HK), China Tower (788 HK)

Huawei pressure easing, but 2Q/3Q19 revisions likely

Tech hardware sector rebounded today (June 10), helped by expectations of US rate cuts and possible easing of Huawei sanctions (link). This follows recent news of Huawei restoring memberships at Wi-Fi Alliance, Bluetooth, SD Association, and Android Q Beta. It appears pressure on Huawei and suppliers may lessen near term. Still, we expect supply chain disruptions and earnings revisions for 2Q/3Q19 ahead. Huawei has reportedly cut its 2H19 smartphone forecast by 20-30%, while a number of US companies have trimmed their guidance outlook (figure 2).

What’s next? Google/Asia supply chain ban still possible

On hardware front, Huawei likely stockpiled enough components to sustain production for at least 6-12 months. For software, Google continues to provides Android updates to Huawei phones on a 90-day reprieve, but Huawei’s overseas smartphones business (~50% handset sales) could suffer meaningfully once the temporary license expires mid-August. There are also risks of component ban by other suppliers along the Asia supply chain, including TSMC (2330 TT) as the sole 7nm foundry, and Samsung (005930 KS) for memory/logic IC and components.

Valuation attractive, watch for buying opportunity

Market concerns for Huawei sanctions have weighed on the tech hardware sector, resulting in attractive valuation for some component suppliers, such as Sunny Optical (2382 HK). While Huawei accounts for 25-30% its total revenue, we believe the Huawei downside will be mitigated by share gains at Samsung (~10% revenue) and Oppo/vivo/Xiaomi (1810 HK) (OVX ~30% revenue). Assuming 50% of Huawei order loss in 2H19 were recovered at other customers, there could be a 10% downside to our earnings estimates and TP for Sunny Optical, still at >30% share price upside.

Uncertainties remain; prefer Sunny Optical

We continue to expect volatilities for tech hardware ahead, as trade tension and US sanctions may erode the strength of 2H19 recovery. For Hardware, we prefer Sunny Optical given our expectation of its margin improvement from 2H19, with attractive valuations (13x 2020E P/E). We believe further downside remain for Apple (AAPL US) and suppliers (such as AAC Tech), as the next US tariff hike (hearings on June 17) could hurt iPhone sales.

[投资评级界说]

公司短期评级

以报告日起6个月内,公司股价相对同期市场基准(沪深300指数)的表示为尺度:激烈引荐:公司股价涨幅超基准指数20%以上
谨慎引荐:公司股价涨幅超基准指数5-20%之间
中性:公司股价更改幅度相对基准指数介于±5%之间
回避:公司股价表示弱于基准指数5%以上

公司长期评级
A:公司长期竞争力高于行业均匀程度
B:公司长期竞争力与行业均匀程度分歧
C:公司长期竞争力低于行业均匀程度

[重要声明]
报告中的内容和看法仅供参考,并不组成对所述证券买卖的出价,在任何情形下,本报告中的信息或所表述的看法并不组成对任何人的投资建议。

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