On March 8, 2023, a remarkable surge in the stock price of Furong Technology shocked market watchers as it hit the ceiling limit, closing at 16.67 yuan and registering a total market capitalization of 11.3 billion yuanThis incredible performance was a part of a broader trend where the company's stock enjoyed six days of trading restrictions due to upward momentum within a period of just seven trading days from February 29 to March 8.

The primary catalyst for this bullish trend appears to be the hype surrounding AI-integrated mobile phonesBut one might wonder, what does Furong Technology have to do with AI mobile phones?

The link came to light on the afternoon of February 29, when an investor posed a question via a conference call, inquiring about the AI capabilities of products supplied by Furong TechnologyShortly after, the company responded that their offerings, including the Samsung S24 series and Google Pixel 8 series, featured AI functionalitiesThis revelation undoubtedly fueled investor interest and drove the stock price higher over the subsequent trading days.

However, by March 6, the company issued a cautionary notice highlighting potential fluctuations in their orders for aluminum structural componentsThey also warned investors about the risks associated with significant stock price increases, indicating the possibility of a correction following such rapid gains.

Subsequently, on March 7, in a clarification regarding abnormal stock price fluctuations, Furong Technology asserted that their products do not possess AI functionalitiesThe immediate response to this news was a notable drop of nearly 10% in their stock priceYet, to the surprise of many, the very next day, the stock hit the ceiling limit yet again, underscoring the volatility and speculative nature of the current market environment.

Furong Technology primarily engages in the research, development, production, and sales of aluminum structural components tailored for consumer electronics

Advertisements

These components undergo further processing to be utilized in devices such as smartphones, tablet computers, and laptops.

The clientele of Furong Technology includes some of the giants of the tech world, such as Apple, Samsung, and GoogleThe prominence of these companies, particularly Apple and Samsung, cannot be understated, as they dominate the global smartphone marketAccording to a report from Canalys, these two firms, along with Xiaomi, OPPO, and Transsion, capture approximately 20% of the market share each, with Xiaomi and OPPO trailing with 13% and 9%, respectively.

Despite the positive performance from Furong Technology stock, the global smartphone market remains sluggish due to high inventory levels and other economic factorsIndustry analysts are cautious regarding prolonged recovery in the smartphone sector, which has seen an overall weak resurgence.

Nonetheless, the rising excitement over AI technology has sparked hopes in the market regarding the future trajectory of AI-enabled mobile devicesMany industry insiders speculate that the demand for these AI smartphones will soar, potentially igniting another wave of upgrades among consumersShould this sector flourish, the consumer electronics industry might witness a significant upswing as a result.

Conversely, caution persists among experts who argue that AI smartphones do not represent a fundamentally different product compared to their predecessorsThus, the current enthusiasm surrounding AI in mobile technology may merely be an attempt to speculate on perceived shifts within the smartphone supply chain.

Amidst the rising speculation surrounding AI-enabled products, Furong Technology has also plotted its potential advancements by eyeing the new energy and automotive sectorsStarting in the second half of the previous year, the company has been seeking entry into these evolving fields.

On October 27, 2023, Furong Technology announced plans for acquiring stakes in its controlling shareholder, Nanping Aluminum, and another shareholder, Yekong Investment, which would involve the management of relevant new energy and automotive businesses

Advertisements

Advertisements

Advertisements

Advertisements