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As the earnings report season of Chinese listed companies is coming to an end, the annual reports of China's electronics industry and important enterprises in the quarterly report have all been announced. In terms of the entire electronics industry, last year's industrial revenue was RMB 1.95 trillion, an increase of 14.9% year-on-year. Compared with 2016 and 2017, the growth rate dropped significantly. The net profit reached RMB 67.1 billion, down 22% year-on-year. Second in 2012。

资料来源: Wind

In the first quarter of this year, the electronics industry revenue was RMB 430.5 billion, an increase of 12.4%; net profit was RMB 16 billion, down 11.7% year-on-year。

 资料来源: Wind

The gross profit margin was partly due to the expansion of industrial competition pressure and the slowdown in demand for technology products. Under the Red Sea strategy, gross profit declined significantly。

资料来源: Wind

One of the factors that drastically reduced the net profit of China's overall electronics industry last year was the impact of asset impairment. Last year, the electronics industry's assets were deducted by RMB 42.2 billion, a significant increase from 2017. In asset impairment, the highest proportion of goodwill impairment。

source: Wind

The following are some of the more important electronic sub-sectors, semiconductors, consumer electronics, panels, and PCBs, indicating the industry operations and prospects。

China's semiconductor industry has a total of 35 companies, including semiconductor design, packaging and testing, materials, equipment, and power semiconductors. Last year, the semiconductor industry's total revenue was 111.5 billion yuan, an increase of about 10% year-on-year。

资料来源: Wind

In terms of net profit, the semiconductor industry's net profit totaled RMB 3 billion last year, a decline of 43.1%. The sharp decline was mainly due to asset impairment and goodwill impairment。

资料来源: Wind

As for the first quarter of this year, the semiconductor industry revenue was RMB 25.5 billion, down 2.74% year-on-year; net profit was RMB 900 million, an annual increase of 14.15%。

The first quarter revenue declined slightly, mainly due to the continued decline of the semiconductor industry. According to the WSTS report, global semiconductor sales in the first quarter of this year reached $96.8 billion, down 13% year-on-year. In addition, the high base period of the first quarter of last year was also one of the factors that led to the decline in China’s semiconductor industry revenue in the first quarter of this year。

Gross margins have remained stable. In the past eight quarters, semiconductor gross margins have fluctuated between 26% and 22%。

However, looking forward to the second quarter, from the fab estimates, TSMC estimates that the second quarter revenue range is 75.5-7.65 billion US dollars, down 0.1% to 1.41%, and the first quarter is a decline of 16.1%; SMIC expects second-quarter revenue to increase by 17% to 19%, indicating an improvement in the semiconductor industry in the second quarter。

China's 28 consumer electronics companies had a total revenue of RMB 348.8 billion last year, an increase of 17.2% year-on-year. In 2017, they grew by 38.7%; net profit was RMB 12.9 billion, a decline of 33.9%. The decline in revenue growth was mainly due to the decrease in sales of smart phones; the decline in net profit was due to the impairment of assets such as company inventory and accounts receivable。

As for the first quarter of this year, the industry's total revenue was RMB 60.7 billion, an increase of 28.4%; net profit was RMB 3.5 billion, an annual increase of 3.2%. Both data have improved。

The gross profit margin is due to industrial competition, and the overall trend is slowly declining。

资料来源: Wind

Last year, China's 17 listed panel companies had a total revenue of RMB 283.9 billion, an annual increase of 9.97%; net profit of RMB 4.6 billion, an annual decrease of 66.7%. The sharp decline in net profit was mainly due to the loss of Huaying Technology and Huadong Technology。

In the first quarter of this year, the industry's total revenue was RMB 72.9 billion, an annual increase of 17%; net profit was RMB 1.2 billion, an annual decrease of 62%。

In terms of gross profit margin, due to the continuous mass production of new capacity, under the price competition, the future gross profit margin will continue to weaken。

资料来源: Wind

In addition, according to the Qunzhi Consulting Report, the current supply and demand of the small and medium-sized panel is in balance, and the large-size panel is slightly larger than the demand. Therefore, it is expected that the price of the panel will have a chance to stop falling, but the price of the panel will be large. Continued to fall, but the decline has a chance to shrink。

The 22 PCB companies listed in China had revenues of RMB 94.7 billion last year, an increase of 14.1% year-on-year; net profit of RMB 8.6 billion, an increase of 18.6%. In the first quarter of this year, revenue reached RMB 20.9 billion, an annual increase of 4.7%, net profit of RMB 1.6 billion, an annual increase of 19.8%。

Gross margins as a whole remain in a certain range of small fluctuations, and there is no sign of a sharp decline due to industrial competition. However, the competitive pressure on the industry is still。

资料来源: Wind

From the perspective of the industry, 5G base station construction will greatly increase the amount of PCB used. 5G will enter the commercial phase in 2020, and the capital expenditure of 5G communication equipment in the early stage will bring new growth opportunities to the PCB industry。