Zepp Health(US:ZEPP) Shanghai Aijian Securities·2025-08-20 11:40Investment Rating - The report rates the electronic industry as "Outperform the Market" [1] Core Insights - The electronic industry index increased by 7.02% this week, outperforming the CSI 300 index which rose by 2.37% [2] - The smart wearable market, particularly smartwatches, is experiencing significant growth, with the global market expected to reach $28.72 billion in 2024, a year-on-year increase of 16.65% [7][17] - Huami Technology's strategic shift towards self-research and development, moving away from reliance on Xiaomi, has led to a notable revenue increase, achieving a year-on-year growth of 46.2% in Q2 2025 [6][9] Summary by Sections 1. Huami Technology's "De-Xiaomi" Strategy - Huami Technology has implemented a "De-Xiaomi" strategy to reduce dependency on Xiaomi, transitioning from an OEM to a brand owner, which has improved product margins and self-developed product ratios [6][9] - The introduction of self-developed chips has allowed Huami to enhance its product offerings, leading to a significant increase in sales of its Amazfit smartwatch series [9][10] 2. Smartwatch Market Landscape - The smartwatch market is characterized by a fragmented competitive landscape, with Huami holding a 4% share of global shipments in 2022, ranking seventh [7][19] - The Chinese smartwatch market is expected to grow at a CAGR of 6.75%, reaching $4.74 billion by 2029 [17][18] 3. Smartwatch Industry Chain - The smartwatch ecosystem operates on a collaborative architecture involving hardware, interaction, connectivity, and software layers, driving product innovation and market expansion [8][24] - Key components include batteries, chips, and sensors, which are essential for enhancing performance and user experience [25][26] 4. Market Performance Overview - The SW electronic industry index has shown strong performance, with passive components leading the gains at +12.32% [2][40] - Notable individual stock performances include significant increases for companies like Geberit (+48.2%) and Shanghai Hejing (+45.4%) [43]