Manufacturer market reshuffle or accelerated start.

The domestic economic pattern is emerging. Statistical analysis of theiot module manufacturers domestic study of the main module manufacturers to carry out business work income, 2020 move far with 6.1 billion module business development income leading, wide and pass ranked second in the world, through the enterprise acquisition of core Xuntong and Long Shang technology technology quickly cut into the module business of the day sea intelligent system is located in the third. From the gross margin point of view, due to the participation of more game manufacturers, as well as domestic module manufacturers in the process of the rapid rise of the Internet of Things can continue to take a reasonable low price competition in order to seize market share under the strategic management, the gross margin of domestic module manufacturers in 2020 is basically in the range of 15%-22%.

Communication profitability to maintain a leading position. In terms of profitability, our strategy of focusing on high-value market segments such as automotive networks and consumer electronics will bring higher profitability to our bank. By 2020, Guanghuatong's net profit margin will reach 10.34%. Significantly ahead of other domestic module manufacturers. As a platform-based module manufacturer, Yue Yuen Communication pursues scale advantage and establishes cost advantage by expanding scale in the process of rapid product development with the next highest profitability. (Report source: FutureWise)

Looking ahead, we believe that small manufacturers will gradually fall behind and market concentration is expected to increase. On the one hand, the performance and energy requirements of low-speed products are lower, and the homogeneity of products is more serious, so the value of the channel is still more prominent. Compared with small manufacturers, leading manufacturers reach more channels, and leading manufacturers in the procurement and processing links have greater scale advantages, the same price can be, with higher margins. On the other hand, the 5G era is coming. 5g is more difficult to develop than 3g or 4g due to its high frequency bands and fast speeds. Based on the fierce competition of low-speed products, we believe that it is difficult for small module manufacturers to have enough profit margin to bear a large amount of investment in R&D. Small module manufacturers make it clear that this is an inevitable trend. Against the backdrop of upstream chips and epidemic affecting business development, small module makers have weak risk resistance, market liquidation may have been accelerated, and industry concentration is expected to increase.