2024.06.17 11:01
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Hong Kong Stock Market Review: Continues to Rise

Hong Kong stocks continued to rise today, with the consumer electronics industry performing strongly, mainly influenced by Apple. The support of Apple AI for the new iPhone 15 Pro has sparked replacement demand, driving industry recovery. In addition, the PCB concept also rose, benefiting from the recovery of demand from NVIDIA and downstream consumer electronics. KB LAMINATES is expected to perform better in the first half of the year due to price increases and increased shipments. In summary, the Hong Kong stock market showed positive performance today, with attention on the consumer electronics and PCB industries

Today, the consumer electronics sector is relatively strong, still following the logic of the industry's expected bottoming out as mentioned before, with the main catalyst coming from Apple.

Although Apple's AI may not seem very powerful at first glance, it only supports the latest iPhone 15 Pro, which implies a significant demand for upgrades. While it remains unknown whether this will accelerate the arrival of a new cycle, given the limited visibility of industry orders and the substantial increase in Apple's stock price, there is naturally room for imagination.

In addition to upgrade demand, AI is also expected to drive comprehensive upgrades in features, such as upgrading microphones for more accurate voice recognition. Therefore, we can see that the trend of AAC Technologies is significantly better, with the added boost from the rising gross profit margin in the optical business.

Moreover, Morgan Stanley recently released a report stating that Apple's replenishment demand is stronger than expected, and it is also expected that promotions before the launch of the iPhone 16 in Q3 will stimulate more demand.

However, most mobile phone brands will only launch their next-generation flagship phones from the end of the third quarter to the beginning of the fourth quarter. Huawei's Pura 70, unlike the previous Mate series, did not generate as much excitement. Perhaps the current trend has exceeded the industry's recovery progress, similar to the trend of restocking seen in the sector at the end of last year.

Furthermore, the PCB concept continues to rise, benefiting on one hand from NVIDIA, as AI servers drive incremental PCB demand, and on the other hand, from the expected recovery in downstream consumer electronics demand.

KB LAMINATES has also rebounded significantly since the end of April. Previously under pressure in the industry, the company issued four profit warnings consecutively between 2022 and 2023, with first-half profits dropping significantly from around 2.79 billion in 2021 to around 390 million in 2023.

The company also implemented two price increases in March and May this year. While these may not bring significant short-term benefits, the overall profit situation in the first half of the year is likely better than last year, mainly due to the increase in shipment volume. Especially for heavy asset manufacturing industries, an increase in utilization rate will bring significant operational leverage