Xiangcai Securities·2025-11-09 12:44Investment Rating - The report maintains an "Overweight" rating for the electronic industry [3][10]. Core Insights - The demand for eSSD is rapidly increasing, driven by the growth in data centers and AI infrastructure investments, which is expected to sustain high demand for NAND storage products [7][8]. - The electronic industry has shown a recovery in consumer electronics, with new foldable smartphones being released and advancements in AI technology driving high demand for AI infrastructure [9][10]. Market Performance - The electronic industry index decreased by 0.09% last week, underperforming the CSI 300 by 0.92 percentage points [12]. - Year-to-date, the electronic industry index has increased by 47.96%, outperforming the CSI 300 by 29.05 percentage points [12]. Valuation Metrics - The electronic sector's PE (TTM, excluding negative values) is at 61.05X, which is in the 43.55th percentile of the past 10 years [6][12]. - The PB (LF) stands at 5.00X, placing it in the 61.35th percentile of the last decade [6][12]. Industry Dynamics - SanDisk reported a quarterly revenue of $2.308 billion for Q1 FY2026, with a 21% quarter-over-quarter growth and a 23% year-over-year growth [7]. - The average selling price of NAND products has seen a mid-single-digit percentage increase, contributing to revenue exceeding expectations [7]. Investment Recommendations - The report suggests focusing on investment opportunities in AI infrastructure, edge SOC, foldable smartphone supply chains, and storage industry chains [10]. - Specific companies to watch in the AI infrastructure sector include Cambrian, Chipone, and Aojie Technology; in the edge SOC sector, recommended companies are Rockchip, Hengxuan Technology, and Lexin Technology [10].