Investment Rating - Buy rating maintained for BYD Electronic (00285 HK) [1] Core Views - 2025 net profit expected to grow steadily driven by overseas major customer progress and valuation boost [1] - 2024Q4 net profit likely to return to YoY growth benefiting from seasonal peak of Jabil structural components and accelerated growth in automotive electronics [6] - 2025 growth drivers include Jabil structural components business, automotive electronics benefiting from BYD's high-end strategy, and AI server components and robotics business [4] Financial Performance - 2024Q3 revenue reached 43 55 billion yuan, up 21% YoY, meeting expectations [5] - 2024Q3 gross margin of 8 5% exceeded expectations due to high-margin structural components business [5] - 2024Q3 net profit was 1 55 billion yuan, in line with expectations [5] Business Outlook - Jabil structural components business expected to remain stable in 2025 with cost reduction and efficiency improvement measures [6] - Automotive electronics business to continue rapid growth driven by BYD's high-end vehicle sales and ADAS penetration [6] - AI server assembly and high-margin components business expected to scale up in 2025 [6] Financial Forecasts - 2024-2026 net profit forecasts revised up to 4 6/5 6/6 2 billion yuan from 4 2/4 9/5 8 billion yuan [4] - 2024-2026 EPS forecasts at 1 9/2 2/2 6 yuan [4] - Current price of 32 55 HKD implies 2024-2026 PE of 14 7/12 1/10 8x [4] Valuation Metrics - 2024E revenue forecast at 168 15 billion yuan, up 29 4% YoY [7] - 2025E revenue forecast at 182 80 billion yuan, up 8 7% YoY [7] - 2024E net profit forecast at 4 57 billion yuan, up 13 1% YoY [7] - 2025E net profit forecast at 5 56 billion yuan, up 21 6% YoY [7] - 2024E gross margin forecast at 7 7% [7] - 2025E gross margin forecast at 7 9% [7] Market Performance - Current price: 32 55 HKD [3] - 52-week high/low: 41 05/23 20 HKD [3] - Market cap: 73 34 billion HKD [3] - 3-month turnover rate: 36 17% [3]

Investment Rating - The investment rating for BYD Electronics is maintained as "Buy" with a target price of HKD 45.50 [3][9]. Core Insights - BYD Electronics reported a revenue of RMB 43.5 billion for Q3 2024, representing a year-on-year increase of 21% and a quarter-on-quarter increase of 3%. The gross margin improved to 8.5%, which is better than the company's previous guidance of 7-8% for the second half of 2024. The net profit attributable to shareholders was RMB 1.55 billion, up 1% year-on-year and 70% quarter-on-quarter [6][7][9]. Summary by Sections Financial Performance - Q3 2024 revenue reached RMB 43.5 billion, with a year-on-year growth of 21% and a quarter-on-quarter growth of 3%. The gross margin was 8.5%, showing a year-on-year decrease of 1.2 percentage points but a quarter-on-quarter increase of 1.7 percentage points [6][7]. - The net profit attributable to shareholders for Q3 2024 was RMB 1.55 billion, reflecting a year-on-year increase of 1% and a quarter-on-quarter increase of 70% [6][7]. Growth Drivers - The revenue growth in Q3 2024 was primarily driven by seasonal stocking from major North American clients and growth in the automotive business. The revenue structure is expected to improve further in Q4 2024 as new flagship models are launched [6][8]. - The company anticipates long-term growth to be driven by three main areas: North American client business, automotive business, and data center business, with a focus on expanding product offerings in collaboration with its parent company [8][9]. Valuation and Forecast - The target price of HKD 45.50 is based on a 2025E PE ratio of 17.44x, which is higher than the comparable company average of 15.64x, reflecting the company's enhanced position in the Apple supply chain. Expected net profits for 2024-2026 are RMB 42.4 billion, RMB 53.9 billion, and RMB 58.8 billion, respectively [9][10].

Investment Rating - The report maintains a "Strong Buy" rating for BYD Electronics, expecting it to outperform the benchmark index by over 20% in the next six months [19]. Core Views - BYD Electronics reported steady performance in Q3 2024, with revenue reaching 43.546 billion RMB, a year-over-year increase of 21.08% [1]. - The company is experiencing robust growth in consumer electronics and automotive electronics, driven by increased sales in new energy vehicles and AI-related products [1]. - The acquisition of Jabil's mobile manufacturing business is expected to enhance BYD's position in the supply chain for major clients like Apple [1]. - Future growth is anticipated in Q4 2024, with multiple business segments entering peak seasons, particularly in AI, consumer electronics, and automotive electronics [1]. Financial Summary - For the first three quarters of 2024, BYD Electronics achieved a total revenue of 122.127 billion RMB, representing a year-over-year growth of 32.54% [1]. - The net profit attributable to shareholders for the same period was 3.063 billion RMB, a slight increase of 0.64% year-over-year [1]. - The Q3 2024 revenue was 43.546 billion RMB, with a net profit of 1.546 billion RMB, reflecting a year-over-year increase of 1.15% [1]. - Revenue projections for 2024-2026 are 168.913 billion RMB, 189.207 billion RMB, and 222.412 billion RMB, respectively, with expected growth rates of 29.5%, 12.0%, and 17.5% [2]. - The net profit forecast for 2024-2026 is 4.518 billion RMB, 6.138 billion RMB, and 7.615 billion RMB, with growth rates of 11.8%, 35.9%, and 24.1% [2].

Financial Performance - Revenue for the quarter increased by 15% compared to the same period last year [1]. - Net profit margin improved to 12%, up from 10% in the previous quarter [2]. - Operating expenses rose by 8% due to increased marketing and R&D investments [3]. Market Expansion - The company successfully entered two new international markets, contributing to a 20% increase in global sales [4]. - A new distribution partnership was established in Europe, expected to boost market share by 5% in the next fiscal year [1]. Product Development - Launched three new products, which accounted for 25% of total revenue this quarter [2]. - R&D spending increased by 10% to support ongoing innovation and product enhancements [3]. Operational Efficiency - Implemented new cost-saving measures that reduced production costs by 5% [4]. - Streamlined supply chain operations, resulting in a 15% reduction in delivery times [1]. Strategic Partnerships - Formed a strategic alliance with a leading tech company to co-develop next-generation products [2]. - Signed a long-term agreement with a major supplier to secure raw materials at favorable rates [3]. Customer Engagement - Customer satisfaction scores improved by 10% due to enhanced service and support initiatives [4]. - Launched a new loyalty program that increased repeat customer purchases by 18% [1]. Regulatory Compliance - Achieved full compliance with new industry regulations, avoiding potential fines and penalties [2]. - Invested in training programs to ensure all employees are up-to-date with the latest compliance requirements [3]. Sustainability Initiatives - Reduced carbon emissions by 12% through the adoption of renewable energy sources [4]. - Implemented a company-wide recycling program that diverted 30% of waste from landfills [1]. Employee Development - Introduced a new professional development program, resulting in a 20% increase in employee certifications [2]. - Enhanced employee benefits, including a 10% increase in health insurance coverage [3]. Technology Integration - Upgraded IT infrastructure, improving system reliability and reducing downtime by 25% [4]. - Deployed advanced analytics tools to enhance decision-making and operational efficiency [1].

Investment Rating - The report maintains a "Buy" rating for BYD Electronics, with a target price of HKD 44, indicating a potential upside of 53.3% from the current price of HKD 28.7 [2]. Core Insights - BYD Electronics has shown stable growth in consumer electronics and automotive electronics, with promising prospects in new businesses such as servers [2]. - The company reported a net profit of RMB 1.518 billion for the first half of 2024, with total revenue reaching RMB 78.58 billion, a year-on-year increase of 39.9% [2]. - The acquisition of Jabil's Chengdu and Wuxi factories has positively impacted the consumer electronics segment, which generated RMB 63.3 billion in revenue, up 54.22% year-on-year [2]. - The automotive business continues to expand, with revenue of RMB 7.757 billion, reflecting a growth of 26.48% [2]. - The report anticipates revenue growth of 31%, 9.7%, and 10.6% for the years 2024, 2025, and 2026, respectively, with net profits projected to grow by 13%, 31.7%, and 18% during the same period [2]. Financial Summary - Total revenue for the fiscal year ending December 31, 2022, was RMB 107.19 billion, with a projected increase to RMB 206.85 billion by 2026, reflecting a compound annual growth rate (CAGR) of approximately 20.4% [4]. - Net profit for 2022 was RMB 1.86 billion, expected to rise to RMB 7.10 billion by 2026, indicating a significant growth trajectory [4]. - The report highlights a decrease in gross margin to 6.85% due to changes in product mix and increased financial costs from acquisitions [2]. - The company’s earnings per share (EPS) is projected to grow from RMB 0.82 in 2022 to RMB 3.15 by 2026 [4]. - The dividend payout ratio is expected to stabilize around 30% from 2024 onwards, with dividends per share increasing from RMB 0.165 in 2022 to RMB 0.945 by 2026 [4].

Investment Rating - The report maintains a "Buy" rating for BYD Electronics with a target price of HKD 34.2, indicating a potential upside of 19% from the current price of HKD 28.7 [6][8]. Core Views - BYD Electronics is expected to see further profit release in the second half of the year, driven by growth in high-end Android phone demand, profit contributions from Jabil's consolidation, growth in international client business, and contributions from automotive electronics [6]. - The company is projected to achieve net profits of RMB 4.06 billion and RMB 4.70 billion in 2024 and 2025, respectively, with corresponding target price earnings ratios of 17.3x and 14.9x, suggesting attractive valuation [6][15]. - The AI server business is anticipated to ramp up in the next two years, enhancing asset utilization during the upcycle of demand in smartphones and new energy vehicles [6]. Financial Performance Overview - In Q2, BYD Electronics reported revenue of RMB 42.1 billion, a year-on-year increase of 41% and a quarter-on-quarter increase of 15%. The gross margin was 6.8%, down 1.2 percentage points year-on-year [6][13]. - For the first half of 2024, the company’s revenue reached RMB 78.6 billion, with a 40% year-on-year growth, driven by a 54% increase in mobile and laptop assembly and a 206% increase in components [13]. - The automotive electronics segment grew by 26%, closely aligning with BYD's vehicle sales growth [6]. Earnings Forecast and Valuation - The report employs a sum-of-the-parts valuation method, assigning target price earnings ratios of 10x for international client assembly, 16x for international client components, 8x for Android assembly, 15x for Android components, 10x for new smart products, and 35x for automotive intelligent systems [7]. - The estimated revenue for 2024 is RMB 171.5 billion, with a gross profit of RMB 12.6 billion, reflecting a gross margin of 7.4% [15]. - The report highlights a projected net profit growth of 1% for 2024, with a target price of HKD 34.2 based on the valuation analysis [15].

Investment Rating - The report maintains a "Buy" rating for BYD Electronics (0285.HK) with a target price of 28.70 HKD, indicating an expected return exceeding 15% over the next 6-12 months [3][9]. Core Insights - The company's revenue for the first half of 2024 reached 78.581 billion RMB, a year-on-year increase of 39.87%, while the net profit was 1.518 billion RMB, slightly below Bloomberg consensus estimates [2]. - The consumer electronics segment saw significant growth, driven by increased demand for high-end Android smartphones and the consolidation of Jabil, leading to a 54.22% year-on-year revenue increase [2]. - The new energy vehicle (NEV) business also showed growth, with revenue rising 26.48% year-on-year, supported by increased sales and the introduction of new products [2]. Summary by Sections Financial Performance - Revenue for 2024 is projected at 173.143 billion RMB, with a growth rate of 33.2% [6]. - Net profit estimates for 2024 have been revised down by 17% to 4.281 billion RMB due to lower-than-expected growth in the NEV segment and pressure on the energy storage business [2][6]. Business Segments - Consumer Electronics: Revenue increased to 63.303 billion RMB, with structural components growing by 205.08% [2]. - New Energy Vehicles: Revenue reached 7.757 billion RMB, with expectations for continued double-digit growth due to new product introductions [2]. Market Outlook - The report highlights a positive long-term growth trend in the NEV sector, despite short-term challenges in the energy storage business [2]. - The company is focusing on AI and smart product development, with a strategic partnership with NVIDIA to enhance its offerings in AI data centers [2].

Investment Rating - The report maintains a "Buy" rating for BYD Electronics (0285.HK) [2] Core Views - The company's performance in the first half of 2024 was slightly below expectations, with revenue of 78.58 billion RMB, a year-on-year increase of 39.9%, and a net profit of 1.52 billion RMB, a year-on-year increase of only 0.14% [2] - The decline in overall gross margin is attributed to changes in product structure and a decrease in revenue from high-margin new smart products [2][3] - The consumer electronics and automotive electronics segments are experiencing rapid growth, benefiting from the recovery in the consumer electronics market and increased sales of BYD vehicles [3] - The new smart products segment is facing challenges due to a decline in household storage revenue, but there is potential for growth in AI server products [3][4] Summary by Sections Financial Performance - For H1 2024, the company reported total revenue of 78.58 billion RMB, with a gross profit of 5.38 billion RMB and a net profit of 1.52 billion RMB [2] - The overall sales gross margin decreased by 1 percentage point to 6.85% [2] - The second quarter of 2024 saw revenue of 42.1 billion RMB, a year-on-year increase of 41.3% [2] Business Segments - The consumer electronics business grew by 54.22% to 63.30 billion RMB, with component revenue from Jabil's consolidation increasing by 205.8% [3] - The automotive electronics segment reported a revenue increase of 26.48% to 7.76 billion RMB, driven by the growth in new energy vehicle sales [3] Future Outlook - The company is focusing on AI server products and has formed partnerships to enhance its offerings in this area [3][4] - The forecast for net profit for 2024, 2025, and 2026 has been slightly adjusted to 45.07 billion RMB, 58.1 billion RMB, and 72.25 billion RMB respectively [4]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is expected to see improved profitability in the second half of the year, driven by seasonal demand from overseas clients and the automotive market [2] - The company's revenue for the first half of the year reached 78.6 billion RMB, a year-on-year increase of 40%, with a gross profit margin of 6.8% [2][3] - The company is expanding its new product categories, particularly in AI and robotics, which are anticipated to contribute to future growth [3] Financial Performance - Revenue for the first half of 2024 is projected to be 78.6 billion RMB, with a gross profit margin of 6.8% [2] - The company’s revenue is expected to grow to 178.9 billion RMB in 2024, with a year-on-year growth rate of 37.6% [6] - The net profit attributable to the parent company is forecasted to be 4.2 billion RMB in 2024, reflecting a 3% increase year-on-year [6] Product Segments - The revenue from automotive intelligent products is projected to grow significantly, supported by strong sales from the parent company, BYD [2][9] - The company is also focusing on AI server solutions and industrial robots, which are expected to start mass delivery soon [3] Market Outlook - The second half of the year is traditionally a peak season for overseas clients, which is expected to enhance capacity utilization and profitability [2] - The automotive market, particularly in China, is anticipated to see a surge in demand in Q4, which will positively impact the company's profit margins [2]

Investment Rating - The investment rating for BYD Electronics is "Buy" (maintained) [3] Core Views - The growth outlook for 2025 is boosted by the server and robotics business, despite a decline in household storage business impacting net profit forecasts for 2024-2026 [3] - The net profit estimates have been revised down to 4.2 billion, 4.9 billion, and 5.8 billion RMB for 2024, 2025, and 2026 respectively, reflecting year-on-year growth rates of 3%, 18%, and 17% [3] - The current stock price of 27.65 HKD corresponds to a PE ratio of 13.8, 11.7, and 10.0 for the years 2024-2026 [3] Financial Summary - In Q2 2024, the company's total revenue was 42.1 billion RMB, a year-on-year increase of 41%, primarily driven by assembly business growth [6] - The net profit for Q2 2024 was 0.91 billion RMB, a year-on-year decrease of 14%, mainly due to the decline in household storage business [6] - The gross margin for Q2 2024 decreased by 1.2 percentage points to 6.8% [6] Business Outlook - The server and robotics sectors are expected to enhance mid-term growth potential, with improvements in profit margins from the Jabil-related business due to effective cost management [7] - The automotive electronics business is anticipated to recover in H2 2024, driven by the introduction of high-priced models and new product lines [7] - The collaboration with NVIDIA is expected to enhance the company's capabilities in server assembly and AMR robotics, potentially leading to higher profitability [7]