On the 26th, Guoju reported low productivity utilization. Foreign Morgan Stanley and J.P. Morgan Chase reported unanimous analysis. The revision of the passive component boom will not come to an end until the second quarter at the earliest. Once the inventory adjustment is not good, there may still be recession pressure in the second half of the year.
It is understood that the National Giant Production Line started construction after the Lantern Festival during the lunar year holiday, resulting in only 30% of the recent capacity utilization rate, only about 40% and 50% of the first quarter capacity utilization rate, Huaxinke production line capacity utilization rate is also low.
The reason for this is that Guoju's offer for MLCC has loosened this year. It is estimated that the price of MLCC will fall 10% to 20% in the first quarter, and the probability of continuing to fall in the second quarter is high.
However, Guoju's explanation is that february's lunar calendar holidays will reduce working days, and after the year, it will adjust the production line capacity utilization rate depending on the employee's return to work and downstream demand. Huaxinke said that the lunar calendar holidays will inevitably affect the productivity utilization rate, which is expected to pick up gradually after March.
Foreign investment pointed out that the reduction of the utilization rate of national giant capacity is the inevitable result. It is estimated that every 10% drop in the quotation of national giant products will have a double-digit impact on this year's profits. This year's performance recession may be inevitable.
Passive components market was hot in the first half of last year. In order to grab goods, it is common for clients to raise prices three or four times a day and increase the amplitude by more than multiple. Last year, the prosperity began to slow down in the third quarter. There was a murmur in the market. In the fourth quarter of last year, the market reversed sharply. Not only did the demand freeze sharply, but the price also fell, and continued to this day.
Why is the market situation of passive components rapidly reversing? Because of the slowdown of downstream demand caused by the Sino-US trade war and the serious repetition of previous orders, when demand is not as expected, inventories are rapidly rising and prices are also falling. These factors are interlinked, leading to a series of domino effects.
Industry insiders admit that this year should be a year of recuperation for passive components industry. In the long run, the demand for passive components will continue to increase dramatically with the continuous vigorous development of new applications such as automatic driving, 5G, Internet of Things, artificial intelligence and so on.
Recent corporate reports indicate that due to the traditional off-season and terminal demand has not yet warmed up, the price of passive components is estimated to fall by 20% to 30% this season, and the productivity utilization rate of Guoju is estimated to be only 40% to 50% this season, even to 30% in February.
Huaxinke said that at present, the company's capacity utilization rate is about 70%. It is expected that after March, the downstream pulling goods and the company's capacity utilization rate will rebound significantly from February. The first quarter should be the bottom of the year's operation.