A Guosheng Securities research report states that the consumer electronics sector is entering its peak season for new product releases, and the sector is expected to see a revaluation. Q3 is traditionally the peak season for consumer electronics, with major device manufacturers intensively releasing new products such as AI phones and AR glasses. The sector is entering its peak mass production phase, and the industry chain's utilization rate is expected to increase rapidly. As of August 21, 2025, the Shenwan Consumer Electronics sector's price-to-earnings (TTM) ratio was 36.9 times, a 46.9% increase from April 7, 2025, and a valuation premium of 71.2% relative to the overall A-share market. We believe that market sentiment driven by tariffs has already been reflected in stock prices, and the resolution of previously feared short-term risks will help reshape the sector's valuation. The medium- and long-term growth story for the consumer electronics sector remains solid, with clear industry trends for AI innovation. The implementation of edge AI is expected to accelerate the replacement cycle for mobile phones and other devices, driving hardware upgrades. We are optimistic about the sector's resilience. Leading companies in the consumer electronics sector, with strong domestic supply chain R&D capabilities, a strong engineering dividend, and solid fundamentals, are expected to benefit significantly from the wave of AI device innovation. We are optimistic about their ability to seize the structural growth opportunities presented by hardware upgrades.