Market Overview

7 CES Takeaways For Chinese Tech Investors

7 CES Takeaways For Chinese Tech Investors

Rosenblatt Securities analyst Jun Zhang attended this year’s Consumer Electronics Show in Las Vegas and compiled a list of seven key CES takeaways for Chinese tech and automaker investors.

This year’s CES wasn’t as busy as previous years for Chinese tech companies, likely due to the ongoing trade war and the recent arrest of Huawei’s CFO in Canada.

Here’s an overview of the seven takeaways for investors Zhang detailed in a Tuesday note. 

  • Even if a trade deal with China is announced within the next two months, Zhang does not believe based on commentary at CES that the Chinese economy will recover in that time.
  • A slowdown in consumer spending will continue to weigh on the employment rate in China as tech companies are forced to move manufacturing outside of China.
  • Smartphone shipments in China may decline by 10 percent this year, totaling between 8 million and 10 million total smartphone shipments in 2019.
  • One of the key areas of investment in 2019 will be camera and 3-D sensing upgrades, with 40-50 million Android 3-D sensing units shipped in 2019 ramping to 100-150 million units in 2020.
  • Many Chinese manufacturers believe the supply chain disruption resulting from the trade war will be permanent and are seeking to develop new partnerships in Japan.
  • TV shipments will likely decline 10 percent in 2019 and panel prices will remain pressured.
  • Despite 50-percent year-over-year growth in the Chinese electric vehicle market in 2019, Zhang said the overall Chinese auto market will likely decline by 8-10 percent this year.

“Our high-level takeaway is that even with positive trade talks underway, the Chinese economy and Chinese consumer spending will face more downside pressure,” Zhang said. 

Rosenblatt said 5G and EVs will be the two potential bright spots in an overall negative Chinese market for the foreseeable future.

Related Links:

Wedbush: Trade War Could Mean Supply Chain Disruption, Higher Costs For Tech Sector In 2019

Trump Economic Advisor Says 'Heck Of A Lot Of US Companies' Have Trade War Earnings Risk

Posted-In: CES Jun Zhang Rosenblatt Securities tariffsAnalyst Color Emerging Markets Markets Analyst Ratings Best of Benzinga


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