The rise of the supply chain LED September into the season

Although due to TV backlight adjustment and off-season factors, Taiwan's chip and packaging industry was generally sluggish in July and August, but accelerated lighting start-up and peak season overlap still hopes to maintain the high boom in the third quarter. According to our recent research, Philips, Cree, and Everlight have all launched new products with lower price of LED bulbs. LED lighting has entered a period of rapid increase in penetration rate. International manufacturers generally look forward to LED lighting penetration in 2015. The rate will reach more than 50%. We investigated the chip operating rate of Sanan, a major chip factory in the mainland, and maintained a relatively high level recently. Order visibility was in the range of 2-3 months. The industry will enter the peak season in September, and the LED company's third-quarter results will be significantly improved both in the quarter and year-on-year. Sanan Optoelectronics completed the acquisition of American Lumens, and overseas mergers and acquisitions began to close. The trend in the three quarters is positive and the focus is recommended.

September will enter the intensive release period of new consumer electronics products. In addition to the much-anticipated new Apple products, the technology event IFA in Berlin, Germany, will also be held on September 6-11. During this period and on the eve of this, Samsung expects to release the Galaxy Note 3 and the new tablet and the GalaxyGear smart watch on the 4th. Also on the same day, the new 5-inch Honami mobile phone and the first external lens module will be launched. HTC OneMax will also be released at IFA. Domestic mobile phones such as Xiaomi 3, Lenovo K910, Meizu MX3 and Huawei Glory 3 will also be released in September. Mainly OLED + 4K new products, the above will also bring a wave of new product preparation tide.

The new apple cycle started, and the rise of the mainland supply chain accelerated. Apple's new product release is confirmed September 10, we determine that will release iPhone5S and colorful plastic version iPhone5C, iPad5 may also be released in the same period, Apple will enter the new product cycle from the third quarter. The high-definition version of the iPad mini is expected to be released at the end of the year or early next year. The most anticipated large-scale revision of the iPhone 6 is also expected to be released in the first half of the year, and wearable iWatch and iTV are expected to show up next year. With the support of Apple, the mainland supply chain is also accelerating. We recommend to focus on the mainland companies that are newly introduced and whose share is expected to increase. This type of company can enjoy a definite increase in the share increase even if Apple's new products do not sell well. It is recommended to continue to pay attention to the combination of Lixun Precision, Goerre Acoustics, Jinfu New Materials, Desai batteries, etc. Consumer electronics slightly warmed up in August. The August ring was slightly warmer compared with July. In September, new product launches and operators were preparing for a new round of subsidies. In the near future, tight supply information was also reported. However, overall, we believe that smartphones should shift from permeability to selected configuration upgrades and industrial transfer acceleration sub-blocks. Sub-sector quality companies including micro-electroacoustics, connectors/structures, lithium batteries, cameras, and FPCs are still worth continuing. Concern, such as Taiwan's three major FPC plant revenue in July increased significantly than the chain, domestic Lixin Precision in the FPC also has a better performance in the future is more likely to break through in overseas customers; In addition, the layout of the next round of innovation hot spots is also the main line, including Wearable, flexible display, sensing, wireless, etc.

Grasp the three main lines. Significant improvement in performance in the second half or after the correction of the post-buy growth stocks will be the focus of the layout, it is recommended to grasp the three main lines, the core targets include: smart terminals (Lixin precision, Goer acoustics, Jinfu new materials), security (Hikvision, (Dahua, Anjubao), LED (Sanan Optoelectronics, Sunlight Lighting, Jufei Optoelectronics), and sub-sectors such as micro-acoustic, connector/structure, lithium battery, camera, FPC, etc. Unexpectedly, ushering in an inflection point in business, we are still firmly pushing the decisive push; Jinfu’s reorganization of new materials is expected to accelerate the vertical integration of the industrial chain and deserves attention. Other short-term performance pressures remain, but will be determined next year and can be viewed in the long-term. Companies such as Hanzu and Xingsen can also be concerned in the fourth quarter.