17/33 IAB: Expected Quarterly Sales Trend by Region


This is a chart depicting IAB sales trends by region. We show the change in quarterly actuals and forecasts for FY2020, relative to Q4 FY2019 levels. There was a significant gap between Q2 results and our previous forecasts for China and Korea. I will explain each individually. I will start with China, where the magnitude of the gap was largest. The red dotted line shows our forecast as of Q1. We had assumed there would be a substantial decline from Q2 onward, after the Q1 peak. In actual fact, the Q2 level was stronger than we had expected. In addition, we now expect a moderation in the magnitude of declines for Q3 onward. China has been the earliest to recover from COVID-19 and the market is now seeing rapid growth. Specifically, by firmly tapping into demand for rechargeable batteries in the Digital domain, EVs in the Automotive domain, and photovoltaic panels, we now expect China to report positive Y/Y sales growth for all 4 quarters. We expect to hit a new record high for China sales in FY2020. We note that on a H/H comparison, optically H2 will look weaker than H1 but this is in line with typical seasonality as seen in the past. The orange dotted line shows our outlook for South Korea as of Q1. Similar to China, we had expected declines from Q2 onward, after the peak in Q1. In fact Q2 was stronger than we expected, partly as a result of some pull-forwards from Q3. We expect H2 will be depressed as a result of the pull-forwards. We expect negative Y/Y trends for all other regions.