Brean Capital: August MIIT Data 'Positive' For RF Names

China's Ministry of Industry and Information Technology (MIIT) released its monthly handset registration data.

• Total registration growth continues in China, despite negative headlines.
• Mike Burton of Brean Capital says latest data is "positive" for RF names.

In a report published Friday, Brean Capital analyst Mike Burton commented on China's Ministry of Industry and Information Technology (MIIT) release of its monthly mobile handset registration data which showed total registrations rose 5 percent month over month in August.

Burton continued that the data was "encouraging" given recent market volatility and vague reports of cuts and cancellations from consumers starting in late July which may have hinted towards a "reset lower" in the August data.

Burton added that the data showed a 57 percent year-over-year growth, driven by a 4 percent month-over-month growth in LTE registration, while 2G grew 12 percent from a month ago and 3G "rebounded" with 20 percent month over month growth.

"If we were to assume flat month over month results in September, overall registrations would grow 9% Q/Q in Q3 with 11% growth in LTE registrations, which we believe is very positive given the market concerns over inventory levels and market demand," Burton argued.

Finally, Burton estimated that the total China radio frequency (RF) market grew 125 percent year-over-year and 5 percent month-over-month in August. By further assuming flat September results, China's RF total addressable market would grow 10 percent in the third quarter from last quarter.

Bottom line, Burton stated that the data is a "positive" for Avago Technologies Ltd AVGO, Qorvo Inc QRVO and Skyworks Solutions Inc SWKS.