[Caitong Electronics & New Technology] MLCC Surge Comment 0730

English summary

On July 21, we believed the MLCC sector regained its value trough after adjustment and firmly favored the opportunities for MLCC original manufacturers after the adjustment. Today it surged again. As of now, some stocks have cumulative gains of 20%+ and 50%+. We reiterate our logic and briefly comment on today's surge. Earnings are guaranteed & production conversion is underway, and we remain optimistic about the sustainability of price increases. Leading manufacturers have released earnings forecasts, with single-quarter earnings growing over 100% QoQ, showing strong performance and boosting confidence; overseas leading manufacturers are converting consumer MLCC to AI MLCC. Considering the supply-demand situation in the AI field, we believe conversion will continue. The capacity crowding-out effect from conversion is obvious, and the supply gap will bring new demand for consumer MLCC; original manufacturers' MLCC price increases are underway. Unlike the volatility of distributor prices, prices are rigid, and we remain optimistic about the sustainability of price increases. Brief comment: A new round of price hike expectations has once again driven the market. On the news front, what was widely circulated in the market yesterday includes: 1. Price hikes by Korean major manufacturers; 2. Confirmation of price hikes by Japanese major manufacturers; ...