The mobile phone supply chain is experiencing a broad and severe sell-off. At the time of writing, COWELL (01415) shares plunged 10.56% to HK$20.84, FIT HON TENG (06088) fell 8.79% to HK$5.29, Q TECH (01478) dropped 6.85% to HK$6.53, and LENS (06613) declined 6.3% to HK$20.52.

This downturn follows concerning industry data. A Counterpoint report indicates global smartphone shipments in the second quarter fell 11% year-on-year, marking the lowest second-quarter volume since 2013.

Preliminary figures from International Data Corporation (IDC) show quarterly global smartphone shipments reached 277.5 million units, a 6.7% year-on-year decrease, representing the second consecutive quarter of decline.

Data from Omdia reveals that global smartphone shipments for the quarter fell by 4% year-on-year.

Prospects for Recovery Appear Bleak

Notably, Omdia anticipates the market will face the most significant shipment pressure over the next two quarters. IDC also projects that the year-on-year decline in China's smartphone market shipments could widen to around 20% in the second half of 2026.

Regarding memory pricing trends, multiple institutions forecast that memory chip prices are unlikely to begin falling until at least the second half of 2027.

Earnings Outlook for the Sector

Given these challenging conditions, Zhongshan Securities believes the likelihood of mobile phone supply chain companies delivering earnings that exceed market expectations is low.