CITIC Securities: Huawei is about to launch a triple-folding mass-produced phone, hinge MIM structural components are expected to see growth opportunities

According to the financial news app Zhitong Finance, CITIC Securities released a research report stating that Huawei is expected to launch the world's first tri-fold mass-produced smartphone on September 10. This extraordinary flagship model under the brand name Mate XT will have an unfolded inner screen size of 10 inches, nearly 50% larger than the left and right folding models, providing a tablet-like user experience. The new folding form factor is driving a significant increase in demand for flexible OLED panels, with the tri-fold phone using two sets of hinges to connect three body parts, doubling the demand for MIM structural components for hinges. The report highlights leading companies in the folding screen hinge field, such as Eastman Shares (600114.SH), and recommends focusing on display panel leaders such as BOE (000725.SZ), Visionox (002387.SZ), and TCL Technology (000100.SZ).

Key Points from CITIC Securities Research:

Event: Huawei is set to unveil a new folding phone, with the next generation tri-fold phone expected to be revealed. On September 2, Huawei's official Weibo account announced that the "Huawei Extraordinary Brand Summit and HarmonyOS Smart Travel New Product" launch event is scheduled to start at 2:30 pm on September 10. It is expected that Huawei will unveil the world's first mass-produced tri-fold smartphone at this event.

To be the global debut of a tri-fold phone, the new folding form factor reshapes the interactive experience. Based on the multiple celebrity teaser videos released by Huawei's official Weibo account, it can be inferred that the upcoming Huawei launch event will introduce the world's first mass-produced tri-fold smartphone. This new model under the extraordinary flagship brand, named Mate XT, not only further enlarges the unfolded screen compared to current mainstream left and right folding models but also remains thin when closed. The new folding form factor is expected to reshape the user experience of folding screen phones, offering various folding methods and featuring the unique gold color and exceptional material texture of the extraordinary flagship brand.

The internal screen size of the tri-fold phone increases by nearly 50%, providing display quality comparable to tablet computers. Positioned for high-end business and office users, left and right folding phones enable split-screen operations for enhanced document reading experience. Taking Huawei's flagship left and right folding model X5 as an example, the unfolded internal screen size reaches 7.85 inches, a 15% increase compared to the 6.82-inch screen of the Mate 60 series. Comparing it to the tri-fold concept model HANTOM ULTIMATE 2 showcased by Transsion, the unfolded internal screen size reaches 10 inches, a nearly 50% increase, with a 4:3 aspect ratio for a visual experience comparable to tablet computers.

The "Z-fold" design leads a new wave of hardware innovation, significantly increasing the value of screens and hinges. Compared to current mainstream left and right folding phones, tri-fold phones not only undergo major changes in folding form factor but also see a substantial increase in the value of corresponding phone components.

Firstly, the significantly increased internal screen size requires higher bending strength for the folding screen, leading to a further increase in demand for flexible OLED panels. It is recommended to focus on display panel leaders such as BOE, Visionox, and TCL Technology.

Secondly, the number of hinges doubles directly. In March of this year, Huawei unveiled a design patent for a tri-fold screen phone that uses two sets of hinges to connect three parts of the body, doubling the demand for hinges in tri-fold phones. The report emphasizes leading companies in the folding screen hinge field, with a focus on Eastman Shares, and suggests keeping an eye on companies like JIYAN Technology (300709.SZ) and TONGLIAN Precision (688210.SH) for future growth opportunities in MIM hinges for folding screen phones Risk Analysis

Huawei's tri-fold phone is globally launched, with an expected price higher than current mainstream foldable phones. Considering the slow recovery of downstream demand for consumer electronics and the gradual digestion of terminal demand inventory, the sales volume of the tri-fold phone upon its launch may be lower than expected.

The tri-fold phone model represents a new form of foldable device, posing significant challenges to the supply chain. If the supply chain delivery capacity cannot meet the demand in the future, it may result in Huawei's tri-fold phone shipment volume falling short of expectations.

Huawei's new tri-fold phone leads the continuous iteration of the foldable screen industry. Currently, other phone manufacturers in the industry such as Samsung and Transsion have also released concepts of tri-fold phones. Honor and VIVO also have plans to launch similar products in the future. New entrants may acquire market share through price reductions. After the industry enters a price war, supply chain companies may face performance pressure