Maintain recommended rating: affected by the saturation of smart phones, the growth rate of the electronics industry was slowed to less than 20%. Entrepreneurs through mergers and acquisitions, reduce the efficiency of the development of the market, such as a series of measures, coupled with the industry began to return to fill inventory, the growth rate of the electronics industry to return to 25%. Fundamentals of the electronics industry is generally sound, the second half is expected to further improve. Moreover, the electronic industry in the second half there are many investment hot spots, including integrated circuits, AMOLED, smart cars, small spacing display, etc., we maintain the industry recommended rating.

Integrated circuit: first, regardless of the long-term trend of import substitution, only short-term changes, after 3 quarters of inventory, the semiconductor industry is warmer, is expected in the second half will be significantly better than the first half. Share price at the bottom, the fundamentals have to improve the expected stocks, there will be a greater flexibility. We recommend Changdian science and technology.

AMOLED: in the small size panel market, AMOLED will gradually replace TFT-LCD as the mainstream, this trend will continue until at least 2018. South Korea is in the most beneficial position, China is in the second group's leading position, all aspects of the industry chain will benefit, including the driver chip, light-emitting materials, touch Sensor, 3D glass, etc.. We recommend SinoWealth, shentianma A, Ou Feiguang etc..

Smart car: Although there is no see recognized "smart car prototype, but the market is generally the Tesla is considered to be a star of tomorrow, even as an apple, Tesla industry chain will also becomes a hotspot of the sustained attention of the market. We recommend victory precision, Fala electronics, long letter technology, etc..

Small spacing display: 2016 is a sports year, but also a new year's outdoor screen. Especially in the Olympic Games, the second half is expected to usher in a wave of peak. Currently the market is not high degree of concern for the LED plate, the expected difference will bring greater flexibility to the relevant stocks. We recommend Riyadh, Abison, Chau Ming technology.

Investment advice: in the second half of the electronic industry fundamentals will continue to improve, and in the second half of the industry hot spots will be more, including integrated circuit, OLED, smart cars, small spacing display, so we maintain the industry recommended rating, under the conditions of the market index pattern of weak shocks, it is recommended to participate in the theme of investment opportunities in the electronics industry. Our portfolio includes Changjiang electronics technology, optical crystal, sunlord electronics, SinoWealth, deep Tianma, Ophelia, victory precision, Farah electronics, Riyadh.

Risk warning: demand is lower than expected, rising labor costs, exchange rate volatility, high valuation.