HTSC·2025-04-30 04:00Investment Rating - The report maintains an "Overweight" rating for the technology sector, indicating an expectation that the sector will outperform the benchmark index [6]. Core Insights - The report discusses the potential of India becoming Apple's next manufacturing hub, highlighting the advantages in tariff costs for exports to the U.S. compared to China [1]. - It emphasizes that while Apple has the theoretical capacity to produce 66 million units in India, initial production will still rely on China due to challenges in launching high-end models [3][4]. - The report notes that the localization of key components in India is still in its early stages, with a projected localization rate of only 35% by 2024, aiming for 60% by 2027 [4]. Summary by Sections Section 1: Manufacturing Capacity - Foxconn and Tata Electronics are rapidly expanding their production capabilities in India, with Foxconn planning to produce 25 to 30 million iPhones by 2025 [2]. - The combined area of Apple-related manufacturing facilities in India has exceeded 4 million square meters, surpassing Foxconn's Shenzhen facility [2]. Section 2: Production Challenges - Initial production of high-end iPhone models in India faces significant challenges, including engineering collaboration and supply chain responsiveness, which are not yet at the level of Chinese facilities [3]. Section 3: Component Localization - Despite progress in assembling iPhones in India, critical components such as camera modules and OLED panels are still heavily reliant on imports from China and other Asian countries [4]. - The Indian government has introduced initiatives to boost local manufacturing of electronic components, but substantial progress is still required [4]. Section 4: Investment Recommendations - The report suggests focusing on undervalued quality stocks and companies benefiting from local expansion in India, such as Foxconn and Tata Electronics [5]. - It advises caution regarding companies that may experience stock price declines due to industry news but have limited short-term production transition capabilities [5].