Jingu CAI Xun | CMB International expresses optimism towards the technology industry. Recently, global technology sector has experienced some adjustments mainly due to concerns over global economic slowdown, appreciation of the yen, mixed performances of overseas technology leaders and the postponement of GB200 new products. From the fundamental viewpoint, consumer terminals have stabilized and recovered, AI computing power demand continues to rise, some industrial demand has hit the bottom, and auto-related demand is weak.
Looking ahead, the bank believes that the technology sector currently has good allocation opportunities and continues to be bullish on the high growth of AI computing power demand and innovative growth on the end side of AI, the recovery of mobile phone/PC demand and the continuous improvement of industry chain performance. The mobile phone industry chain (Apple/Xiaomi/Qualcomm/MediaTek) is expected to stabilize and recover, and the Apple chain (BYD electronic/ AAC tech/ Fit Hon Teng) will significantly benefit from the iPhone/iPad AI upgrade cycle in the second half of the year. PC/server brands (Dell/HP/SMCI/Lenovo) and contract manufacturers (Hon Hai/Guangda) are expected to see good performance and guidance for the general server/PC market recovery and strong demand for AI servers. The global industry chain is expected to show comprehensive growth in the second half of the year. It is recommended to pay attention to AI server sector such as Fit Hon Teng (06088, buy) and Luxshare Precision Industry (002475 CH, buy), as well as AI PC/mobile phone industry chains such as Xiaomi (01810, buy), BYD electronic (00285, buy), Shunyu Optical (02382, buy), and AAC tech (02018, hold).
