Electronics: Apple WWDC conference will be held soon, focusing on AI side application opportunities. Apple's WWDC World Developers Conference in 2024 will be held on June 11, Beijing time. Apple will release new iOS 18 and macOS 15 systems. The new systems will be deeply integrated with AI, which may include generative AI. AI is expected to become the biggest highlight, Siri after AI technology upgrade will be more intelligent, which is expected to help users handle more complex schedules. In addition, Apple is expected to release AI App Store. We believe that Apple's software system is deeply integrated with AI, which is expected to drive the replacement of many hardware products such as iPhone and MacBook. In September, Apple will release iPhone 16, and the third quarter will enter the new machine stocking season. We are optimistic about the core beneficiary companies of Apple's industrial chain. Nvidia released its financial report for the first quarter of fiscal year 2025: 1) FY1Q25 business: single quarter revenue of $26.04 billion, YoY+262%，QoQ+18%， It exceeded the guidance by 24 billion dollars (+- 2%), and the expected revenue of FY2Q25 performance was 28 billion dollars (+- 2%), and the performance continued to exceed expectations. Nvidia said that the new AI model that can create video and voice interaction similar to human will further stimulate the growth of Nvidia AI chip orders. At present, AI chip demand is strong, Blackwell architecture chips are operating at full capacity, and the Blackwell architecture chip supply may continue to fall short of demand until 2025. We know from the industry chain that the shipments of AI chips, AI servers, optical modules, switches and other AI computing related products continue to be strong. Looking forward to the second half of the year, there will be many blockbuster AI mobile phones and AI PCs released. The third quarter will usher in a peak demand season, and the inventory will gradually reach a reasonable level. The industry chain is expected to usher in a good opportunity to pull goods, and the price increase of copper clad laminate is expected to continue (Jiantao will issue a price increase letter again in May, and other manufacturers are also expected to follow up). On the whole, the electronic fundamentals will gradually improve, and the Ai model will continue to upgrade, Ai empowers consumer electronics, which is expected to bring new demand for replacement, and continues to be optimistic about the AI driven, demand recovery and self controllable benefit industry chain.
Computer sector: Since the beginning of the year, the performance of the computer industry has ranked last. On the one hand, it may be due to the decline of risk appetite, on the other hand, it may be from the perspective of industry comparison, and the strength of computer business performance is not among the top. With the end of the disclosure intensive period of the annual report and the first quarterly report, risk appetite has rebounded. From the perspective of the first quarter report, the business level is not strong, but the revenue side is still in the recovery channel within the beginning of last year. The profit side is also in the stage of releasing flexibility, excluding the impact of a few special circumstances of companies. We expect that the business situation throughout the year will gradually improve, and the second half will be stronger than the first half, and the profit side is more likely to be stronger than the income side. For sectors where valuation elasticity contributes much more to market value fluctuations than fundamental elasticity, we are not pessimistic about this year's computer market. Artificial intelligence, data elements, new quality productivity, low altitude economy, Huawei's industrial chain, information innovation, and going to sea are all continuously advancing and landing. It is estimated that the central government, key industries of central state-owned enterprises, and overseas demand will continue to advance and settle in 24 years, Both of them have the ability and space to exert their power. At present, some macro data show that there is also an improvement. The demand side is improving, and the cost side is improving. The profit elasticity is gradually reflected. Believing that demand is improving, we can focus on leading enterprises, expect marginal innovation, and focus on small and medium-sized market capitalization and overseas mapping. It is expected that the potential volume of performance in 24 years will be in the following directions: going to sea, domestic substitution, AI computing power, new industrialization, etc., while the continuous catalysis will be in the following industrial trends: data elements, AI application landing, new quality productivity, low altitude economy, etc. In terms of market value, the former will be driven by performance, while the latter may be driven by valuation. Recommended combination: Hikvision, fluorite network, central control technology.
Media sector: in the process of Internet Q1 performance landing, focus on companies with good fundamentals and a logic of going to sea; The media pay attention to three directions and the impact of weekend cultural tourism policies.
1) Tencent, Pinduoduo, Fasthand, Bilibili and other companies have released Q1 results, among which there are many companies whose revenues and profits exceed expectations. Hong Kong Stock Internet is expected to go out of the persistent market. 2) ① AI tool or model iteration is expected to bring investment opportunities. From June 11 to 15, Apple WWDC will be held, which may bring catalysis and focus on the landing of AI applications and the emergence of blockbusters. The value of AI corpus continues to improve, and the ever-increasing corpus demand under the iteration of the big model further highlights the importance of corpus. Focus on continuously promoting AI tool iteration, using AI tool target, exploding AI tool mapping target, IP side and corpus side. ② Pay attention to the summer file layout and the content plate edge upward. In the off-season, focus on the arrangement of films in summer; The film and television production section focuses on the subject with strong content scheduling and upward margin this year; The game focuses on companies with upward margin of follow-up performance and strong certainty or performance. ③ Focus on companies with stable operation, continuous dividend/repurchase capability, and business growth potential. The main business performance and operating cash flow of the publishing company are stable, and there is potential for educational business expansion and extension development in the future. Although some of the listed companies in the radio and television sector have lost performance, the leading companies are stable and have high cash reserves, and we believe that the potential value of network assets in the radio and television sector needs to be tapped. ④ On May 24, the National Development and Reform Commission issued the Implementation Plan for Promoting the Renewal of Equipment in the Field of Culture and Tourism, which mentioned "promoting the renewal of a number of facilities and equipment in the field of culture and tourism across the country". At the same time, "bringing qualified key projects into the scope of capital support such as ultra long term special national debt", and focusing on the impact and catalysis on the cultural tourism, radio and television, and film sectors. Individual stock concerns: Tencent Holdings, Pinduoduo, Light Media, Kaiying Network.
Risk warning
The macro economy is less than expected, the policy risk, the industry competition intensifies, the iteration and application of the meta universe technology is less than expected, and the data statistics error.
