The Zhitong Finance App learned that on the afternoon of February 22, Huawei officially held the Huawei Pocket 2 fashion festival in Sanya to officially launch the new vertical folding flagship Pocket 2. Prior to that, in 2021 and 2022, Huawei had already released two vertical folding screen phones, the P50 Pocket and Pocket S. Northeast Securities believes that the Huawei phone Phoenix Nirvana will return to the high-end mobile phone market. In the field of folding screens, Huawei has always maintained a strong competitive edge. The development of high-performance phones and folding screen phones places higher demands on heat dissipation and battery life, while also driving the trend of lightness and thinness. Related concept stocks: BOE Precision Electronics (00710), TCL Electronics (01070), Xinli International (00732).

Creases have always been a persistent problem with folding screen phones, and they are also the most complained about by consumers. As a result, the Huawei Pocket 2 uses the industry's first Xuanwu water drop hinge technology, which is 62% more flatness than the previous generation. It also uses ultra-strong rocket steel and second-generation Kunlun glass, which significantly improves its flatness, strength, and fall resistance of the entire machine.

In addition, Pocket 2 supports AI airborne control and bidirectional Beidou satellite messaging. It has achieved breakthroughs in screen flatness and battery life. It also supports high-precision sunscreen testing, UV intensity testing, and sun spot detection. The price starts at 7499 yuan, and the customized art version of 16GB+1TB costs 10,999 yuan.

In addition to the Huawei Pocket 2, Yu Chengdong also shared a set of data at the press conference. In the fourth quarter of 2023, Huawei had the highest sales volume of folding screen phones in the Chinese market, with a market share of 51.2% and the highest consumer satisfaction. Yu Chengdong said that Huawei's folding screen phones have occupied the top share of the domestic folding screen market for four consecutive years.

According to information, Huawei's first folding screen phone, the Huawei Mate X, was released in 2019, and so far, Huawei has released nine folding screen phone products. The last folding screen product before the Huawei Pocket 2 was the Huawei Mate X5, which was released in September of last year. According to the IDC report, the Huawei Mate X5 series has been purchased at a higher price since its launch, and supply is in short supply, helping Huawei firmly occupy the first position in the domestic folding screen phone market in 2023.

It is worth mentioning that on the same day that the Huawei Pocket 2 was released, ZTE's mobile phone brand Nubia just announced that its first folding screen phone, Nubia Flip, will be released on February 26. In addition, it is also rumored in the market. A person close to Apple's internal plans revealed that the company is actively developing a foldable iPhone and has provided an estimated release period for this product, saying that Apple will sell foldable iPhones around September or October 2026. He also mentioned that some key members of the Apple Vision Pro team have been designated to participate in the development of the device.

In such a hot market situation, folding screens can be considered the “hope of the whole village” in the mobile phone market. According to the IDC report, in 2023, China's folding screen mobile phone market shipped about 7.07 million units, up 114.5% year on year. Since the first product was launched in 2019, China's folding screen phone market has been growing by more than 100% year on year for 4 consecutive years. Specifically, in 2023, the top five manufacturers in the folding screen phone market in China were Huawei, OPPO, Honor, Samsung, and Vivo, with market shares of 37.4%, 18.3%, 17.7%, 11%, and 9.7% respectively.

Looking ahead to 2024, CINNO Research said that folding screen smartphones benefit from advantages such as form innovation, unique user experience, and cost reduction, and will continue to grow against the trend in an environment where overall demand in the smartphone market is sluggish. It is estimated that in 2024, sales of folding screen smartphones in the Chinese market will reach 9.6 million units, an increase of 41% over the previous year.

According to Shanghai Securities analysis, in the future, as folding screen product technology becomes more mature, costs are further reduced, and more application adaptations are developed, especially after applications that can take advantage of the unique advantages of folding screen hardware are developed, sales of folding screen products are expected to continue to increase. Increased demand may drive the expansion of this market segment, and the folding screen phone industry chain is expected to continue to expand.

Related concept stocks:

BOE Precision Electronics (00710): Previously, the Huawei P20 Pro and Huawei P30 series phones used BOE screens. According to some sources, the flexible 0LED display on the Huawei Pocket 2, Huawei's small folding phone, will also be jointly supplied by domestic panel vendors BOE A and Vicino.

TCL Electronics (01070): TCL Electronics released the 2023 global shipment volume data. According to data, in 2023, TCL Smart Screen's global shipments reached 25.26 million units, up 6.2% year on year; among them, shipments in the fourth quarter increased 5.4% year on year and 20.5% month on month.

Xinli International (00732): Xinli International Co., Ltd. is an investment holding company mainly engaged in the manufacture and sale of LCD products. The company operates through two divisions. The LCD Products Division is engaged in the manufacture and distribution of LCD products and touch screen products. The Consumer Electronics Division is engaged in the manufacture and distribution of consumer electronics products. The company recently announced that the Group's unaudited consolidated net turnover in January 2024 was approximately HK$1,637 million, an increase of approximately 84.6% over the previous year.