Apple's New Product Boosts China's Shipment Volume... Smartphone-Related Stocks Stir

Expected Beneficiaries Including LG Innotek, ITM Semiconductor, and BH

Apple's iPhone SE 2nd generation (Photo by Asia Economy DB)

[Asia Economy Reporter Geum Bo-ryeong] Smartphone-related stocks, which have been affected by the novel coronavirus disease (COVID-19), are drawing attention as to whether they can recover their performance and stock prices, supported by Apple's iPhone SE launch and increased smartphone shipments in China.

According to the industry on the 17th, Apple announced the second generation of the budget phone iPhone SE on the 15th (local time). Pre-orders for this model began on the 17th, and it is scheduled to be released on the 24th in more than 40 countries and regions, including the United States.

The iPhone SE is expected to focus on filling the off-season gap in the second quarter. Originally expected to be released in the first quarter of this year, the iPhone SE's launch was delayed due to COVID-19. The market expects the second-generation product to sell between 2 million and 4 million units per month on average. The first-generation iPhone SE, released in 2016, also sold an average of 2.3 million units per month in its first year.

Last month, smartphone shipments in China showed a V-shaped rebound. According to data released by the China Academy of Information and Communications Technology (CAICT), smartphone shipments in March reached 21 million units, a 233% increase compared to the previous month. Despite the sluggish performance in February (6.3 million units), which raised concerns among many investors about demand, March shipments exceeded the January shipment volume (20.4 million units).

Considering the case of China, if the impact of COVID-19 eases in the United States and Europe within the second quarter, it is expected that the momentum for new smartphone products in the second half of the year will strengthen. The supply performance of new product parts from Apple suppliers will be reflected in the second half of the year.

Jong-wook Lee, a researcher at Samsung Securities, said, "In a situation where concerns about deteriorating second-quarter earnings dominate the stock market, the first signal of demand rebound is positive," adding, "As investors' doubts gradually fade, stock price discounts will also begin to be resolved." He added, "Once the direction of recovery becomes clear, stock prices are likely to respond faster than the speed of recovery."

LG Innotek, a major parts supplier for the iPhone, is already showing an upward trend in its stock price. The stock price, which was 117,500 won on the 13th, rose 7.23% in two days to 126,000 won on the 16th. BH also rose 4.06% during the same period, from 16,000 won to 16,650 won. Chang-min Lee, a researcher at KB Securities, said, "We expect LG Innotek, ITM Semiconductor, and BH, which are smartphone-related stocks, to benefit and maintain a positive view on them."

This content was produced with the assistance of AI translation services.