The electronics industry's mid-term investment strategy in 2015: continue to be optimistic about the two strategic directions of semiconductors and the Internet of Things

　　Key conclusions and investment recommendations

　　 Semiconductor has always been an industry we continue to recommend. The core logic is as follows: the national will, the promulgation of the National Integrated Circuit Industry Development Outline in June last year and the listing of the semiconductor industry fund in October reflect the country's firm will to develop the semiconductor industry;
Related company stock trends

Huatian Technology 18.19+0.663.76%
Tongfu Microelectronics 16.25+0.462.91%
Huagong Technology 15.37+0.301.99%
Jingfang Technology 43.55+0.170.39%
Hanwei Electronics 74.72+0.000.00%

Industrial chain transfer, engineer bonus + proximity to the market, and low-cost advantages have made the entire semiconductor industry chain gradually shift from Taiwan and South Korea to the mainland; my country's electronics industry is upgraded, and our electronics industry itself continues to be upgraded from low-end assembly and processing peripheral components. We are optimistic about the important reason why the mainland semiconductor industry will usher in a ten-year golden development period. We continue to be optimistic about the investment opportunities in the domestic semiconductor industry and recommend focusing on the IC design and packaging and testing sub-sectors.

　　 With the smartphone penetration rate exceeding 60%, the industry has gradually matured, and the growth rate has begun to slow down. The Internet of Things is expected to relay smartphones and become the next outlet in the electronics industry. According to the latest statistical report released by IDC, 30 billion devices are expected to be connected to the Internet of Things by 2020. The global Internet of Things market will grow from US$265.6 billion in 2014 to US$3.04 trillion in 2020, with a compound annual growth rate of up to 50%. Forrester Research predicts that by 2020, the scale of the Internet of Things industry will be 30 times larger than the Internet of Information, which is a sunrise industry with great opportunities. In the context of the development of the Internet of Things industry, hardware companies are expected to take the lead in benefiting. In the next few years, core hardware sensors, RFID, MCU, etc. deserve continuous attention. With the maturity of the industry, the market's demand for application services has become stronger and stronger, and the value of network operators and platform service providers has begun to highlight. We believe that platformization will become the development trend of companies in the industry, and hardware manufacturers will take advantage of "entry" to take the lead in the process of platformization. Therefore, hardware companies with platform potential are worthy of long-term optimism.

　　 Give the electronics industry a "overweight" investment rating

　　 We are optimistic about structural investment opportunities in the industry. It is recommended to pay attention to the two major sub-sectors of semiconductor and Internet of Things that are in line with the national policies and represent the future development trend of the industry:

  Investment targets:

1) In the semiconductor field, it is recommended to focus on manufacturers with advanced packaging processes and capable of binding with major international customers: Huatian Technology, Tongfu Microelectronics, and Jingfang Technology.

2) In the Internet of Things industry, we are optimistic about platform companies with the core technology advantages of gas sensors: Hanwei Electronics; industrial Internet of Things high-quality targets: Huagong Technology and relying on core hardware entrances are expected to grow into large video operation platforms: Hikvision, Dahua shares.