Security section out of cattle stocks

The recent hot spot in the electronics industry has spawned a large number of cattle stocks. Among them, the security sector has performed particularly well. Dr. Peng, who has gained more than 90% in the past month, belongs to this sector. The tradable electronic security stocks rose on May 20 and became the focus of investors’ attention.

In this regard, analysts said that the industry's economy has picked up. In addition to the smart cities (government security) that the market has already demonstrated, commercialization (accounting for 45% of the total demand for security monitoring) and civil security also showed signs of recovery, and many unlisted small-sized manufacturers' order indices are also improving. Under the support of strong fundamentals, the sector naturally receives the attention and pursuit of market funds.

Specifically, on May 20th, Guoteng Electronics (5.90%), Jingang Glass (5.69%), Santai Electronics (4.94%) and Guodian Nanzi (3.85%) were among the top gainers. Since the beginning of the month, Dr. Peng (59.05%), China Ruisi Chuang (27.43%), Guoteng Electronics (25.16%), Jiadu Xintai (24.26%), Dali Technology (21.07%), Suntime Electronics (20.99%) ), brilliant electronic technology (20.76%) and other electronic security stocks rose more than 20%.

From the perspective of industry fundamentals, according to relevant statistical data, the overall growth rate of the security industry in China was 16.9% in 2012, which was lower than that in 2011, but the growth rate of the security industry in 2013 will return to an average of 20% during the “Eleventh Five-Year Plan” period. Above level. From the perspective of the operation of the security industry in the first quarter of this year, the demand for smart city monitoring is still the main growth driver for security, and the demand for sub-sectors such as rail transit, finance and education has increased significantly.

A number of brokers said that the multi-modal network monitoring back-end emerged and the high-definition front-end monitoring entered the heavy volume period. Thanks to the large-scale deployment of the government and energy industries, it is expected that the front-end camera market will continue to grow rapidly in 2013. High-definition cameras have changed from big manufacturers with exclusive new products in the past two years to devices that can be made by large and small manufacturers. The threshold has been lowered, and high-definition front-ends have entered a price reduction period. However, there will be no serious price war in the front-end market this year, and the back-end DVR-based structure is being broken. IT vendors that specialize in network storage, such as Huawei's subsidiary Huasei, have started to enter the back-end market, and have come to the traditional DVR manufacturers. It is very important to have a product line ready on the network storage, including back-end platform products and corresponding fabric solutions that can connect different numbers and forms.

The growth momentum of the industry is sufficient, and urbanization and technological innovation will remain the core drivers. Security as a key beneficiary of urbanization, the demand increase is still in place. In addition, the trend of high-definition monitoring is still in place. Since 2013, heavy volume of innovative products such as wireless, intelligent, integrated monitoring and alarm systems have begun to take off. It is expected that technological innovation will continue to be an important driving force for replacement.

For the future investment strategy, a number of securities companies said that from the perspective of the industry chain, attracted by the industry's high economy, the influx of capital led to increased competition among downstream integrators, and the conditions for payment are harsh. Equipment manufacturers rely on multiple barriers such as brands and channels, and they are still taking the initiative in the industry chain. The market share of leading equipment manufacturers will continue to increase. Although the current valuation of the security industry is relatively reasonable, there are still opportunities for performance beyond expectations in the future.