The Sapphire Concept Sector rose 1.65% yesterday, ranking at the top of the Shanghai and Shenzhen Stock Exchange's sector growth rankings. Within the sector, stocks such as Southwest Pharmaceutical (9.95%), Crystal Optoelectronics (5.95%), Tongfeng Electronics (3.11%), Jingsheng Electromechanical (2.88%), and Anjie Technology (2.78%) saw significant gains.
In fact, since the sector bottomed out on July 25, it has risen by 12.05% as of yesterday. During this period, stocks such as Southwest Pharmaceuticals, Crystal Optoelectronics, and Han's Laser all rose by more than 15%.
Judging from the latest trends in the industry, Harbin Orade's backdoor listing of Southwest Pharmaceutical has attracted great attention from the market. At the same time, the market expects that this incident is expected to drive excess returns in the sapphire sector. Southwest Pharmaceutical announced on August 12 that after the asset swap, the company plans to acquire 100% of the equity of Orred with a fixed increase of 497 million shares at 7.42 yuan/share, and plans to invest no less than 7.42 yuan/share in a fixed increase of no more than 138.814 million shares in Orred's "large-size sapphire material industry base expansion project" and Qiuguan Optoelectronics' "sapphire window film base project." The company first conducted an asset swap with Zuo Hongbo, one of the actual controllers of Orred (the estimated value of the assets to be acquired is 427 million yuan); the balance of 100% of Orred's equity after the swap was then purchased by the company from the original shareholders; after the asset swap was completed, Zuo Hongbo received all the assets sold and 413 million yuan in cash to transfer 29.99% of the company's equity held by Taiji Group. After the completion of this transaction, the company's main business will transform into a supplier of sapphire crystal materials and single crystal furnace equipment.
The "scandal" between Apple and Sapphire is also an effective catalyst that continues to stimulate the rise of the Sapphire concept sector. The market believes that Apple will bring leapfrog development to the sapphire industry. Industrial Securities said that through research on Apple's patents and Apple's $578 million cooperation with GTAT, sapphire cover will be Apple's strategic material in the future, reflecting Apple's long-term layout. Once the sapphire cover is applied to the iPhone, the sapphire industry will achieve leapfrog development. The scale of LED substrates and sapphire windows in 2014 was about 5 billion yuan. It is expected that the demand for Apple sapphire covers will reach 7.5 billion yuan and 9.3 billion yuan from 2015 to 2016, and the demand for non-Apple sapphire covers will reach 4 billion yuan and 7 billion yuan.
In addition, the LED industry's demand for sapphire will continue to grow steadily. Sapphire single crystal has superior electrochemical, optical, and thermodynamic properties and has been widely used in LEDs, large-scale integrated circuits SOI and SOS, substrate materials for superconducting nanofilms, infrared military devices, window materials for high-intensity lasers, etc. Among them, LED has long occupied the main market share of sapphire. According to data, LED applications accounted for 78% of the total demand for sapphire in 2013. Benefiting from the explosion of the LED lighting market, the LED industry is still in a period of rapid growth. Some institutions predict that the compound growth rate of the LED market's demand for sapphire will remain at around 30% in the next five years.
In terms of individual stock allocation, Industrial Securities stated that Apple's largest sapphire supplier is expected to occupy more than 40% of the global market in the future (the current market share of the world's largest company is about 20%), so there is room for growth of more than 10 times, making it the most valuable enterprise in the industry chain for investment. From the perspective of Apple's demand, manufacturers with good technology, low cost and large scale are most likely to become Apple suppliers.
Based on the above logic, Orred has the largest production capacity in the world, excellent crystal growth technology, and good cost control capabilities. Lens Technology has huge cutting capacity reserves and has invested heavily in extending upstream. It is currently the company with the most investment value. At the same time, it is recommended to pay attention to Tongfeng Electronics and Jingsheng Electromechanical.
ANNA