Strategy Note /
China

CN : Strategy - Smartphone demand recovery on track in 2H22F

    Ray Kwok
    Ray Kwok

    Technology Analyst

    CGS-CIMB
    25 May 2022
    Published by

    Looking ahead to 2H22F: Smartphone demand recovery, easing supply chain constraints and China’s Omicron containment. 2Q22F: China’s Omicron pandemic, production and logistics disruptions and weak China smartphone demand are almost behind us. Global smartphone shipments set to resume growth in 3Q-4Q22F due to easing smartphone component shortages, improving logistics and production efficiency in China and a new wave of new model launches. China’s smartphone sector valuation correction appears to be over. It is trading at an attractive 12x prospective P/E (5-year low for the sector). We reiterate Overweight on China’s smartphone sector. Our sector top picks are Xiaomi, Sunny Optical andWill Semiconductor.