JW Insights: Over 70% of China’s listed mobile phone supply chain companies suffer net profit drop
Chinese article by 秋贤
English Editor 张未名
09-11 15:01

By Kate Yuan

(JW Insights) Sep 11 -- A total of 122 companies experienced a decline in net profit in the first half of 2023 among the 174 smartphone industry chain companies listed on China’s A-share market, which released earnings report ended August 30, accounting for 70.11%, JW Insights learned.

In the first half of this year, the consumer electronics market was weak affected by the global macroeconomic downturn, high inflation, and other unfavorable factors. In addition, inventory adjustments and a slowdown in technological innovation further contributed to the downward trend in smartphone shipments.

The performance of many smartphone companies fell short of expectations in H1 2023. The combined revenue of these 174 companies reached RMB931.5 billion ($127 billion), with 140 companies achieving profitability and reaching RMB38.094 billion ($5.19 billion). On the other hand, 34 companies reported a net loss, with a total loss of RMB2.453 billion ($334.43 million).

Five companies saw revenue exceeding RMB40 billion ($5.45 billion), including Foxconn Industrial Internet, Luxshare Precision, TCL, BOE, and Goertek, with first-half revenues hitting RMB206.776 billion, RMB97.971 billion, RMB85.149 billion, RMB80.178 billion, and RMB45.173 billion, respectively.

There were nine companies with revenue in the range of RMB10 billion to RMB40 billion ($1.36 billion-$5.45 billion), including Wingtech, Universal Scientific Industrial (USI), Transsion, and Sunwoda, with revenues of RMB29.206 billion, RMB26.866 billion, RMB25.029 billion, and RMB22.236 billion, respectively.

The revenue of ten companies fell within the range of RMB5 billion to RMB10 billion ($681.68 million-$1.36 billion), and 27 companies with revenue in the range of RMB2 billion to RMB5 billion ($272.67 million - $681.68 million).

However, 104 companies experienced varying degrees of decline in revenue, including Furi Electronics, Australis, and Orient-Chip.

In terms of net profit attributable to shareholders, there were seven companies with net profit exceeding RMB1 billion ($136.34 million) among the 174 companies, accounting for 4.02% of the total. These companies include Foxconn Industrial Internet, Luxshare Precision, Transsion, and Wingtech, with net profits of RMB7.161 billion, RMB4.356 billion, RMB2.102 billion, and RMB1.258 billion, respectively.

There were 50 companies with net profits in the range of RMB100 million to RMB1 billion ($13.63 million-$136.34 million), accounting for 28.74%. There were 83 companies with net profit below RMB100 million, accounting for 47.70%.

Additionally, 34 companies reported a net loss, accounting for 19.54%, including InfoVision Optoelectronics, Honflex, Orbbec, and Goodix.

In terms of the growth rate of net profit, SVG ranks first with a year-on-year surge of 784.51%. Following closely behind were Zhiyun, Lens Technology, and Kuangshun Materials, with year-on-year growth rates of 420.64%, 281.90%, and 227.57% respectively.

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