Chinese consumer electronics companies on path to recovery

Consumer electronics companies have started seeing a smart pickup in sales due to healthy domestic demand, as China's efforts to sustain industrial momentum amid the COVID-19 epidemic continued to bear fruit.

Nearly 21.75 million smartphones were shipped to the domestic market in March, up 240 percent on a monthly basis, according to the latest data from the China Academy of Information and Communications Technology, a government think tank.

In particular, over 24 new 5G smartphone models hit the market last month, with the domestic shipments of 5G smartphones exceeding 6.21 million units, representing a 160-percent growth from February.

Wu Qiang, vice-president of smartphone maker Oppo, said the company's smartphone sales have been recovering rapidly, with some of its sales personnel undertaking product deliveries.

According to Wu, the company has 200,000 retail outlets across the country and stores in 600 malls. Sensing the demand revival, Oppo plans to open stores in 1,000 malls by the end of this year, as part of its broader efforts to seek transformation amid the pandemic.

Xiang Ligang, director-general of the Information Consumption Alliance, a telecom industry association, said Chinese electronics companies were badly hit in February, but as demand is expected to revive further in the upcoming months, they will likely see better growth.

Once the epidemic is contained in overseas countries, the global supply chain could also become more stable, and support their production, Xiang said.

Huawei Technologies Co, the largest smartphone maker in China, said its sales revenue rose by 1.4 percent on a yearly basis to 182.2 billion yuan ($25.7 billion) during the first three months of this year, despite challenges from the COVID-19 pandemic. The company said that most of its businesses were running smoothly and its overall operating results are in line with expectations.

Huawei said revenue from its consumer business group, which includes smartphones, personal computers and tablets, will see rapid growth in China this year, despite the COVID-19 epidemic.

Lenovo Group Ltd, the world's largest personal computer maker, said that as more people stay at home for work and study, the demand for PCs, tablets and displays will increase. The growing demand for mobile games, remote consultations and video conferencing tools also provides tons of opportunities.

Yang Yuanqing, chairman and CEO of Lenovo, said the company has a full product lineup, and good relations with software providers, which can help the company become a one-stop supplier to meet the current demand.

The reviving demand for consumer electronics has also been reflected in upstream suppliers such as chip makers. Semiconductor Manufacturing International Corp, a leading chip maker, recently raised its revenue guidance for the first quarter of this year, given an increase in product demand and product portfolio.

The company adjusted its annual revenue growth guidance for the first quarter of 2020 from 0 to 2 percent range to 6 to 8 percent band. Its gross profit margin guidance has also been raised from 21 to 23 percent to 25 to 27 percent band.

SMIC Chief Financial Officer Gao Yonggang said: "Since the company initially announced the first-quarter revenue and gross margin guidance, we have seen an increase in product demand and product portfolio. These have exceeded our earlier expectations."