Investment Rating - The report maintains a "Strong Buy" rating for BYD Electronics (00285.HK) [1] Core Views - The company achieved stable performance in H1 2024, with revenue of 78.581 billion yuan, a year-over-year increase of 39.87%, and a net profit of 1.518 billion yuan, a slight increase of 0.14% year-over-year. The second quarter saw revenue of 42.1 billion yuan, up 41.25% year-over-year and 15.40% quarter-over-quarter, while net profit was 0.907 billion yuan, down 14.14% year-over-year but up 48.59% quarter-over-quarter [1] - The growth in revenue is driven by the rapid expansion of consumer electronics and automotive electronics, while the energy storage business and financial costs from the acquisition of Jabil have impacted H1 2024 performance [1] - The report anticipates a promising H2 2024, with multiple business segments entering peak seasons, including AI, consumer electronics, and automotive electronics [1] Summary by Relevant Sections Financial Performance - In H1 2024, BYD Electronics reported total revenue of 78.581 billion yuan, with consumer electronics revenue at 63.303 billion yuan (up 54.22% year-over-year), automotive electronics revenue at 7.757 billion yuan (up 26.48% year-over-year), and new intelligent products revenue at 7.521 billion yuan (down 16.43% year-over-year) [1] - The company’s net profit for H1 2024 was 1.518 billion yuan, with Q2 net profit at 0.907 billion yuan [1] Business Segments - AI business is progressing well, with cloud-side collaborations and partnerships with Nvidia, including the development of autonomous mobile robots and deepening cooperation in autonomous driving [1] - Consumer electronics segment is benefiting from the integration of iPad components and the acquisition of Jabil, which enhances relationships with major clients [1] - Automotive electronics are expanding with continuous growth in sales from the parent company, BYD Group, and the introduction of new products such as intelligent suspension systems [1] Investment Outlook - The report projects net profits for the company to reach 5.069 billion yuan in 2024, 7.063 billion yuan in 2025, and 8.231 billion yuan in 2026, with a target price of 49.40 HKD based on a 20x PE ratio for 2024 [1][2]

Investment Rating - The report maintains a "BUY" rating for BYDE with a target price of HK$45.28, indicating a potential upside of 53% from the current price of HK$29.50 [4][14][20]. Core Insights - BYDE reported a strong revenue growth of 40% year-on-year for 1H24, driven by increased market share in the Apple segment, recovery in the Android market, integration with Jabil, and robust performance in the New Energy Vehicle (NEV) sector [2][3]. - Despite the strong revenue growth, net profit only increased by 0.1% year-on-year, falling short of expectations due to a 1 percentage point decline in gross profit margin and a significant increase in sales expenses by 211% [2][3]. - The outlook for 2H24 remains positive, with expectations of strong revenue growth driven by the iPhone/iPad upgrade cycle, solid Android demand, and contributions from AI server products [3][14]. Financial Summary - For FY24E, revenue is projected to reach RMB 171.96 billion, with a year-on-year growth of 32.3%. Net profit is expected to be RMB 5.06 billion, reflecting a growth of 25.3% [6][16]. - The report highlights a decrease in gross profit margin to 6.8% in 1H24, down from the previous year, while sales expenses surged to RMB 902 million [3][6]. - The company is expected to see a recovery in gross profit margin in 2H24, with interest expenses projected to decrease significantly as BYDE transitions from USD loans to RMB loans [3][14]. Revenue Breakdown - Revenue from assembly, components, and new smart products showed significant year-on-year growth, with assembly and components growing by 36% and 206% respectively, while new smart products experienced a decline of 16% [6][16]. - The NEV segment is anticipated to continue driving growth, supported by new product launches and increasing market demand [3][14]. Valuation Metrics - The report assigns a P/E ratio of 18.3x for the target price calculation, with assembly and components businesses valued at 15x, reflecting their recovery potential and market positioning [14][20]. - The report also notes a projected P/B ratio of 2.5x for FY24E, indicating a favorable valuation relative to peers [14][20].

Investment Rating - The report maintains a "BUY" rating for BYDE with a target price of HK$45.28, indicating a potential upside of 53.5% from the current price of HK$29.50 [3][10]. Core Insights - BYDE reported a strong revenue growth of 40% YoY in 1H24, driven by gains in Apple market share, recovery in Android, consolidation of Jabil, and robust demand in the NEV segment. However, net profit growth was only 0.1% YoY, falling short of estimates due to a decline in gross profit margin and a significant increase in selling expenses [2][6]. - The outlook for 2H24 is positive, with expectations of continued momentum from iPhone/iPad upgrades, resilient Android demand, and contributions from new product launches in NEV and AI server segments [2][10]. Financial Summary - Revenue is projected to grow from RMB 129,957 million in FY23A to RMB 171,957 million in FY24E, reflecting a YoY growth of 32.3% [1]. - Net profit is expected to increase from RMB 4,041.4 million in FY23A to RMB 5,063.1 million in FY24E, representing a YoY growth of 25.3% [1]. - The report highlights a decline in gross profit margin to 6.8% in 1H24, down 1 percentage point YoY, while selling expenses surged by 211% YoY to RMB 902 million [2][6]. Segment Performance - BYDE's revenue breakdown for 1H24 shows assembly sales grew by 33.3% YoY, while component sales surged by 205.8% YoY, indicating strong performance across segments [6]. - The NEV segment is expected to contribute significantly to revenue growth, supported by new product launches and a favorable market environment [2][10]. Valuation Metrics - The report assigns a target P/E of 18.3x for FY24E, with specific P/E multiples of 15x for assembly and component businesses, and 20x for new intelligent and NEV segments, reflecting their growth potential [10][8]. - The current P/E is noted at 12.0x for FY24E, indicating a favorable valuation compared to peers [9].

Financial Performance - Revenue increased by 39.87% to RMB78,581 million for the six months ended 30 June 2024[6] - Gross profit rose by 22.01% to RMB5,379 million for the six months ended 30 June 2024[6] - Profit attributable to owners of the parent company grew by 0.14% to RMB1,518 million for the six months ended 30 June 2024[6] - Earnings per share increased by 0.14% to RMB0.67 for the six months ended 30 June 2024[6] - The Group recorded sales of approximately RMB78,581 million in the first half of 2024, a year-on-year increase of approximately 39.87%[10] - Profit attributable to shareholders increased by approximately 0.14% to approximately RMB1,518 million in the first half of 2024[10] - The company achieved sales revenue of approximately RMB 78.581 billion in the first half of 2024, a year-on-year increase of 39.87%, with net profit attributable to shareholders rising by 0.14% to RMB 1.518 billion[11] - Revenue for the six months ended 30 June 2024 increased to RMB 78,580.8 million, up from RMB 56,180.1 million in the same period in 2023, representing a growth of approximately 39.9%[86] - Gross profit for the six months ended 30 June 2024 was RMB 5,379.0 million, compared to RMB 4,408.7 million in the same period in 2023, reflecting a 22.0% increase[86] - Profit before tax for the six months ended 30 June 2024 was RMB 1,635.8 million, compared to RMB 1,669.9 million in the same period in 2023, showing a slight decrease of 2.0%[86] - Total comprehensive income for the six months ended 30 June 2024 was RMB 1,526.8 million, slightly lower than the RMB 1,541.3 million in the same period in 2023[87] - Profit for the period reached RMB 1,517,800,000 for the six months ended 30 June 2024[90] - The final dividend declared for 2024 was RMB 0.538 per ordinary share, a significant increase from RMB 0.165 per ordinary share in 2023[125] Business Segments and Market Trends - Consumer electronics business revenue achieved substantial growth due to overseas major customers' product category expansion and market share increase[7] - New energy vehicle business segment revenue continued to grow with increased shipments of intelligent cockpit, intelligent driving assistance system, and thermal management products[7] - The Group is pursuing a multi-pronged strategy in the AI business, developing AIDC solutions and products like industrial robots and AIPC[7] - The company's consumer electronics business revenue reached RMB 63.303 billion, a year-on-year increase of 54.22%, with component revenue surging by 205.80% to RMB 15.246 billion and assembly revenue growing by 33.26% to RMB 48.057 billion[13] - Foldable smartphone shipments in China reached 4.427 million units in the first half of 2024, a year-on-year increase of 94.9%[12] - The AI server market is expected to grow significantly in 2024, with shipments projected to increase by 41.5% and output value expected to exceed $187 billion, representing 65% of the total server market value[14] - The company's new intelligent products business recorded revenue of approximately RMB 7.521 billion in the first half of 2024, accounting for 9.57% of total revenue, but representing a 16.43% decrease compared to the same period in 2023[15] - The company's consumer electronics business benefited from the recovery in demand, with domestic and overseas customer demand improvement driving substantial growth in Android parts and assembly business[13] - The company strengthened strategic cooperation with industry-leading customers in various segments, achieving growth in unmanned aerial vehicles, smart home, and game hardware businesses[15] - The company actively participated in the development of new materials and products for many customers, leveraging its technological advantages and manufacturing strength to support product iteration and innovation[13] - The company began consolidating financial statements for the business acquired at the end of 2023, driving the expansion of the consumer electronics component business and creating more long-term development opportunities[13] - China's new energy vehicle sales reached 4.944 million units in the first half of 2024, a year-on-year growth of 32%, with market share increasing from 31.6% in 2023 to 35.2%[16][17] - The export volume of new energy vehicles in China reached 0.605 million units in the first half of 2024, a year-on-year growth of 13.2%[16][17] - The company's revenue from the new energy vehicle business segment amounted to approximately RMB7,757 million in the first half of 2024, accounting for 9.87% of total revenue, representing a year-on-year increase of 26.48%[16][17] - Global smartphone shipments are forecasted to grow by 4.0% year-on-year to 1.21 billion units in 2024, with AI smartphone shipments expected to grow by 364% year-on-year to 234 million units[21] - AI PC shipments are expected to grow from nearly 50 million units in 2024 to 167 million units in 2027, accounting for nearly 60% of global PC shipments[21] - The company has deployed intelligent cockpit systems, intelligent driving systems, and thermal management systems, with products achieving mass production and continuous shipment growth[16][17] - The global new energy vehicle market is projected to grow by 27% year-on-year to reach 17.5 million units in 2024, with a CAGR of 22% from 2023 to 2027, reaching approximately 40 million units by 2027[26] - China's intelligent cockpit market is forecasted to reach RMB152.8 billion in 2024, growing at an annual rate of 17.5%, and is expected to reach RMB212.7 billion by 2026[26] - The penetration rate of air suspension in China is expected to rise to 15% by 2025, with a market value of about RMB38 billion and a CAGR of 41.3%[27] - The global automotive sensor market is projected to grow from US$28.88 billion in 2024 to US$38.74 billion in 2029, at a CAGR of 6.05%[28] - The company expects sustained growth in shipments of intelligent cockpits, intelligent driving, thermal management, and sensors in the second half of 2024, with intelligent suspension products achieving mass delivery in batches[28] - The company plans to deepen cooperation with domestic and overseas automotive companies, continue to develop new customers, and strive to become a world-leading solution provider in the new energy vehicle industry[28] - The company has expanded its business from a single Android business to a diversified layout including overseas major customer business, Android business, automotive business, and intelligent product business[29] - The company has developed a series of product lines for new energy vehicle business, including intelligent cockpits, intelligent driving, intelligent suspension, core controllers, and sensors[29] - New intelligent products such as unmanned aerial vehicles, game hardware, and smart home have achieved rapid growth[29] - The company is actively expanding new businesses such as AIDC and intelligent industrial robots to foster new growth drivers[29] - The Group operates in diverse markets including smartphones, tablets, new energy vehicles, AIDC (AI servers, thermal management, power management), smart home, gaming hardware, drones, 3D printers, IoT, robotics, and communication equipment[98] Financial Position and Cash Flow - Operating cash inflow decreased to RMB183 million from RMB2,351 million in the first half of 2023, primarily due to increased cash payments for goods and services[35][38] - Interest-bearing bank and other borrowings increased to RMB15,576 million as of 30 June 2024, up from RMB14,613 million at the end of 2023[35][39] - Inventory turnover days decreased from 61 days to 49 days, driven by a higher year-on-year increase in cost of sales compared to inventory balance[36] - The gearing ratio increased to 31.64% from 26.11%, mainly due to a higher increase in net liabilities compared to equity[40] - The Group had approximately 168,000 employees as of 30 June 2024, with total staff costs accounting for 12.43% of revenue[50] - The Group's bank deposits pledged for credit guarantees increased to RMB13,169,000 from RMB9,000,000 at the end of 2023[45][49] - Total assets as of 30 June 2024 were RMB 85,869.9 million, a decrease from RMB 87,218.6 million as of 31 December 2023[88] - Current assets as of 30 June 2024 were RMB 54,037.0 million, compared to RMB 54,606.9 million as of 31 December 2023[88] - Total equity as of 30 June 2024 was RMB 29,645.0 million, up from RMB 29,330.4 million as of 31 December 2023[89] - Total equity increased to RMB 29,644,966,000 as of 30 June 2024, up from RMB 29,330,389,000 at the beginning of the year[90] - Consolidated reserves amounted to RMB 25,592,738,000 as of 30 June 2024, compared to RMB 25,278,161,000 at the end of 2023[91] - Net cash flows from operating activities were RMB 182,990,000 for the six months ended 30 June 2024, a significant decrease from RMB 2,350,625,000 in the same period of 2023[93] - Cash and cash equivalents decreased to RMB 8,130,150,000 as of 30 June 2024, down from RMB 10,537,361,000 at the beginning of the period[94] - The Group secured new loans totaling RMB 9,500,000,000 during the six months ended 30 June 2024[94] - Depreciation of property, plant, and equipment amounted to RMB 2,318,456,000 for the six months ended 30 June 2024[92] - Inventories increased by RMB 2,259,267,000 during the six months ended 30 June 2024[93] - Trade receivables as of 30 June 2024 amounted to RMB23,330,171,000, with 90-day receivables making up RMB22,343,059,000[132] - Due from fellow subsidiaries stood at RMB4,687,791,000 as of 30 June 2024, down from RMB4,818,115,000 at the end of 2023[132] - Trade and bills payables totaled RMB28,730,363,000 as of 30 June 2024, with 90-day payables accounting for RMB27,746,130,000[134] - Due to fellow subsidiaries decreased to RMB10,750,538,000 as of 30 June 2024 from RMB11,790,756,000 at the end of 2023[135] - The company's capital commitments for plant and machinery decreased to RMB 393,597 thousand as of June 30, 2024, compared to RMB 442,014 thousand at the end of 2023[146] - The company's total capital commitments decreased to RMB 434,542 thousand as of June 30, 2024, compared to RMB 556,288 thousand at the end of 2023[146] Strategic Initiatives and Future Outlook - The Group demonstrated strong resilience and achieved continuous expansion of market share despite complex international political and economic environment[10] - The Group plans to expand into AIDC and intelligent industrial robotics, aiming to cultivate new growth drivers[30] - The Group expects all business segments to maintain strong growth momentum in the second half of 2024[30] - The company will continue to deepen its layout in core technology R&D and innovation, reinforce vertical integration advantages, and intensify the major customer strategy[19][20] - The company will further explore the potential of core businesses with major overseas customers and actively expand product categories to enhance product share[21] - The company will strengthen its global layout and drive business growth in both domestic and overseas markets in the consumer electronics sector[21] - The global AI server market is forecasted to grow at a compound annual growth rate (CAGR) of 26.5% from 2024 to 2029, reaching $50.65 billion by 2029[24] - Hyperscale data center companies' spending on cloud infrastructure is expected to double from $70 billion in 2024 to $140 billion in 2025, and further rise to $210 billion by 2028[24] - The green data center market is anticipated to reach $81.12 billion in 2024, growing at an annual rate of 15.7%[24] - The liquid cooling market for data centers is predicted to grow at a CAGR of 25% from 2023 to 2035, surpassing $230 billion by the end of 2035[24] - The Autonomous Mobile Robot (AMR) market is expected to reach $1.59 billion in 2024, growing at an annual rate of 16.9%[24] - The company plans to deepen collaboration with top-tier customers and roll out new businesses such as AIDC and industrial robots, achieving bulk delivery in the second half of the year[25] - The company is leveraging its R&D capabilities and global presence to develop new high-growth potential categories and markets, driving long-term sustainable business growth[25] Corporate Governance and Shareholder Information - The company's share capital as of 30 June 2024 consists of 2,253,204,500 issued ordinary shares[52][56] - The Group's capital commitments as of 30 June 2024 were approximately RMB435 million, down from RMB556 million at the end of 2023[53][57] - The Group employs approximately 168,000 staff as of 30 June 2024, with total staff costs accounting for about 12.43% of the Group's turnover[56] - Mr. Wang Chuan-fu holds 513,623,850 A shares of BYD, representing approximately 28.56% of BYD's total issued A shares as of 30 June 2024[63][66] - Mr. Wang Nian-qiang holds 17,102,000 shares of the Company, representing 0.76% of total issued shares, and 18,299,740 A shares of BYD, representing 1.01% of BYD's total issued A shares[59][62] - The Group has implemented a three-tier training framework for new staff since 2021, requiring attendance and passing examinations before assuming duties[51][56] - No significant events affecting the Group's financial condition or operation occurred between 30 June 2024 and the date of the interim report[55][58] - The Company did not adopt any share schemes during the review period[64][67] - Golden Link Worldwide Limited holds 1,481,700,000 shares, representing 65.76% of the total issued shares[68] - BYD (H.K.) Co., Limited and BYD Company Limited each hold 1,481,700,000 shares, representing 65.76% of the total issued shares[68] - The company has not been notified of any other substantial shareholders as of 30 June 2024[70] - The company's domestic female employees account for approximately 36.77% of the total workforce[82] - The Audit Committee reviewed the unaudited results of the Group for the period[83] - The company did not recommend the distribution of an interim dividend for the six months ended 30 June 2024, consistent with the same period in 2023[84][85] - The company's domestic female employees accounted for approximately 36.77% of the total workforce as of the reporting date[84] - The financial statements were approved and authorized for issue by the board of directors on 28 August 2024[174] Legal and Regulatory Matters - A legal dispute with Foxconn, initiated in 2007, remains unresolved with unquantified damages sought by the plaintiffs[139][140] - The company's legal counsel has not been able to reliably estimate the outcome or potential settlement amount of the ongoing Foxconn litigation[143][145] Related Party Transactions - BYD Precision received entrusted loans of RMB13.5 billion from BYD Co., Ltd., with a fixed interest rate of 2.5%. RMB4 billion is due in 2024, and the remaining RMB9.5 billion is due in 2025[154] - BYD Electronic obtained a loan of USD263.88 million (RMB1.88 billion) from BYD HK Co., Ltd., with a fixed interest rate ranging from 5.98% to 6.08%[154] - The Group's total lease liabilities with related companies amounted to RMB465.81 million as of 30 June 2024, with RMB169.21 million due to the ultimate holding company and RMB206.18 million due to fellow subsidiaries[158] - The net carrying amount of right-of-use assets related to rental contracts was RMB265.95 million as of 30 June 2024, compared to RMB233.62 million as of 31 December 2023[158] - Short-term employee benefits for key management personnel totaled RMB7.68 million for the six months ended 30 June 2024, a slight decrease from RMB7.80 million in the same period of 2023[160] - Sales of inventories to fellow subsidiaries increased significantly to RMB 6,239,875 thousand in 2024, up from RMB 5,191,183 thousand in 2023[149] - Purchases of batteries from fellow subsidiaries decreased to RMB 630,025 thousand in 2024, down from RMB 1,996,834 thousand in 2023[151] - Sales of plant and machinery to fellow subsidiaries increased to RMB 10,228 thousand in 2024, up from RMB 4,376 thousand in 2023[142] - Purchases of inventories from fellow subsidiaries increased to RMB 242,108 thousand in 2024, up from RMB 192,127 thousand in 2023[149] - Lease and ancillary services payments to fellow subsidiaries remained relatively stable at RMB 347,021 thousand in 2024, compared to RMB 349,903 thousand in 2023[149] - Exclusive processing services received from fellow subsidiaries increased to RMB

Financial Performance - For the six months ended June 30, 2024, the Group recorded revenue of approximately RMB78,581 million, representing a year-on-year increase of 39.87%[16] - Gross profit for the same period was RMB5,379 million, reflecting a growth of 22.01%[16] - Profit attributable to owners of the parent company increased by 0.14% to RMB1,518 million[16] - Earnings per share for the first half of 2024 was RMB0.67, up by 0.14%[16] - Revenue for the six months ended June 30, 2024, reached RMB 78,580,818, an increase of 39.8% compared to RMB 56,180,097 for the same period in 2023[98] - Profit before tax for the period was RMB 1,635,780, slightly down from RMB 1,669,881 in the previous year[98] - Profit for the period attributable to owners of the parent was RMB 1,517,800, compared to RMB 1,515,744 in the prior year, indicating stable performance[98] - Total comprehensive income for the period ended June 30, 2024, was RMB 1,526,801,000, compared to RMB 1,541,349,000 for the same period in 2023, indicating a decrease of 0.9%[102] Business Segments - The consumer electronics business segment achieved substantial growth due to the recovery of demand for high-end Android smartphones and expansion of product categories[17] - Revenue from the new energy vehicle business segment continued to maintain growth, driven by increased shipments of intelligent cockpit and thermal management products[17] - The consumer electronics business achieved a revenue of RMB 63.303 billion, reflecting a year-on-year growth of approximately 54.22%[22] - Revenue from components and parts in the consumer electronics segment was approximately RMB 15.246 billion, marking a year-on-year increase of 205.80%[22] - The new intelligent products business recorded revenue of approximately RMB 7.521 billion, accounting for 9.57% of total revenue, which is a decrease of 16.43% compared to the same period in 2023[24] - The Group's revenue from the new energy vehicle business segment amounted to approximately RMB 7,757 million, accounting for 9.87% of total revenue, reflecting an increase of approximately 26.48% compared to the same period in 2023[26] Market Trends - The overall revenue scale of the Group reached a new level, demonstrating strong resilience despite geopolitical tensions and high interest rates[20] - The national economy showed steady progress with a GDP increase of 5.0% year-on-year, positively impacting the Group's performance[20] - The global smartphone shipments are forecasted to grow by 4.0% year-on-year to 1.21 billion units in 2024[31] - AI smartphone shipments are expected to surge by 364% year-on-year to 234 million units in 2024, with a projected compound annual growth rate of 78.4% from 2023 to 2028[31] - The global new energy vehicle market is projected to grow by 27% year-on-year, reaching 17.5 million units in 2024[36] Research and Development - The Group plans to deepen its layout in core technology R&D and innovation, reinforcing vertical integration advantages and intensifying major customer strategies[29] - The Group plans to continue enhancing its R&D capabilities and expand into new business areas such as AIDC and intelligent industrial robots[40] - Research and development expenses totaled RMB 2,472,846, a marginal increase from RMB 2,458,929, highlighting continued investment in innovation[98] Corporate Governance - The Board is committed to high standards of corporate governance and has complied with the applicable provisions of the Corporate Governance Code during the reporting period[83] - The company has adopted a Board Diversity Policy to ensure a diverse skill set among Board members, with measurable objectives discussed annually[90] - As of June 30, 2024, one female director is on the Board, reflecting an improvement in gender diversity compared to 2023[93] - Approximately 36.77% of the Group's domestic workforce are female employees, indicating a commitment to gender diversity within the workforce[94] Financial Position - Operating cash inflow decreased to approximately RMB 183 million from RMB 2,351 million in the first half of 2023, primarily due to increased cash paid for purchases and services[47] - As of June 30, 2024, interest-bearing bank and other borrowings amounted to approximately RMB 15,576 million, up from RMB 14,613 million at the end of 2023[51] - The gearing ratio increased to 31.64% as of June 30, 2024, compared to 26.11% at the end of 2023, due to a higher increase in net liabilities than in equity[52] - The Group's liquidity is sufficient to meet daily management and capital expenditure requirements for at least the next twelve months[51] Shareholder Information - As of June 30, 2024, the company had issued 2,253,204,500 ordinary shares[64] - The total share capital of BYD as of June 30, 2024, was RMB 2,909,265,855, comprising 1,811,265,855 A shares and 1,098,000,000 H shares[74] - Mr. Wang Chuan-fu held 513,623,850 A shares, representing approximately 28.56% of the total issued A shares of BYD as of June 30, 2024[75] Legal and Compliance - The group has ongoing legal proceedings against Foxconn, with the ultimate outcome and any potential settlement payments currently unable to be reliably estimated[155] - The amendments to HKFRS 16 regarding lease liabilities in sale and leaseback transactions did not impact the Group's financial position or performance[118] Related Party Transactions - All related party transactions were conducted in the ordinary course of business, adhering to mutually agreed prices and terms[166] - The Group's trade balances with related parties are unsecured and have no fixed terms of repayment, except for loans from the ultimate and intermediate holding companies[169]

Investment Rating - The report maintains a "BUY" rating for BYDE with a target price of HK$45.28, implying a potential upside of 47.3% from the current price of HK$30.75 [2][3][11] Core Insights - BYDE is expected to report solid growth in 1H24, with estimated revenue and net profit growth of 32% and 26% respectively, driven by iPad share gains, Android recovery, and stable NEV components sales [2][11] - The company has revised its FY24-26 EPS estimates down by 6% primarily due to a weaker gross profit margin (GPM) [2][11] - The stock is currently trading at attractive multiples of 12.7x and 9.3x FY24 and FY25 estimated P/E ratios [2][11] Summary by Sections Consumer Electronics - Revenue from smartphone OEM/component business is projected to increase by 39% in 1H24 and 36% in 2H24, driven by iPad share gains and the iPhone cycle [2] - iPad revenue is expected to grow by 53% in 1H24 and 28% in 2H24, with market share projected to reach 50% in FY24 [2][6] - GPM for assembly is expected to improve slightly to 2.5% in 1H24 and 2.6% in 2H24, while component GPM is projected at 14.3% and 14.7% for the same periods [2] Automotive - Automotive revenue is expected to grow by 38% YoY in FY24, driven by strong Parentco shipments and new high-end product ramp-up [2][6] - The ASP for automotive products is anticipated to grow by 20% YoY, contributing to overall revenue growth [2] New Intelligent Products - AI server business is expected to generate RMB1 billion in revenue in FY24, offsetting weaknesses in the household energy storage segment [2] - The report expresses optimism about the AI server business delivering rapid growth in FY25-26 due to next-gen products in development with Nvidia [2] Earnings Summary - For FY24, revenue is estimated at RMB171.96 billion, with a YoY growth of 32.3% [3][6] - Net profit for FY24 is projected at RMB5.06 billion, reflecting a 25.3% YoY growth [3][6] - EPS for FY24 is estimated at RMB2.25, which is 1-9% above consensus estimates [2][6] Valuation - The new target price of HK$45.28 is based on a sum-of-the-parts (SOTP) valuation, reflecting BYDE's diversified business model [11] - The report assigns a target P/E of 15x for assembly and component businesses, and 20x for new intelligent and NEV segments, indicating their growth potential [11]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 45.28, reflecting an attractive valuation based on a P/E ratio of 18.3 times FY24E earnings [2][19][26]. Core Insights - The company is expected to see revenue and net profit growth of 32% and 26% respectively in 1H24, driven by increased iPad market share, recovery in Android, and stable sales in new energy vehicle (NEV) components [2][3]. - The report anticipates a positive outlook for the iPad/iPhone upgrade cycle and high-end Android orders, which will contribute to revenue growth in 2H24E and FY25E [2][4]. - Adjustments to FY24-26E earnings per share have been made, with a reduction of 6% primarily due to weakening gross profit margins (GPM) [2][5]. Revenue and Profit Forecast - FY23 revenue is reported at RMB 129,957 million, with a projected increase to RMB 171,957 million in FY24E, representing a 32% year-over-year growth [10][23]. - Net profit is expected to rise from RMB 4,041 million in FY23 to RMB 5,063 million in FY24E, indicating a 25% increase [10][23]. - The company’s gross profit margin is projected to stabilize around 32.3% for FY24E [10]. Segment Performance - The smartphone OEM/components business is estimated to grow by 39% in 1H24 and 36% in 2H24, supported by the iPad share increase and iPhone cycle [3]. - Automotive revenue is expected to grow by 38% in FY24E, driven by increased shipments and average selling price (ASP) growth [4]. - The AI server business is projected to contribute RMB 1 billion in FY24E, offsetting weaknesses in the home energy storage segment [5]. Valuation Metrics - The current P/E ratio is noted at 12.7x for FY24E and 9.3x for FY25E, suggesting an attractive valuation compared to peers [2][19]. - The report utilizes a sum-of-the-parts (SOTP) valuation approach, assigning different target P/E ratios to various business segments based on their growth profiles and visibility [19][22].

Investment Rating - The report maintains a BUY rating for the company, with a target price of HK$45.15, indicating a potential upside of 15.8% from the current price of HK$39.00 [3][10]. Core Insights - The management has a positive outlook for 2024, driven by several key factors including gains in iPad market share, growth in the NEV sector, and advancements in AI servers and robotics [2]. - The automotive segment is expected to achieve over 40% sales growth in FY24E, supported by new product launches and increased shipment volumes [2][6]. - The stock is currently trading at an attractive P/E ratio of 15.2x for FY24E, which is favorable compared to industry peers [2][10]. Financial Performance Summary - Revenue is projected to grow from RMB 129,957 million in FY23A to RMB 181,168 million in FY24E, reflecting a year-on-year growth of 39.4% [6][14]. - Net profit is expected to increase significantly from RMB 4,041.4 million in FY23A to RMB 5,382.6 million in FY24E, marking a growth of 33.2% [6][14]. - The company’s EPS is forecasted to rise from RMB 1.79 in FY23A to RMB 2.39 in FY24E [6][14]. Revenue Breakdown - The revenue breakdown for FY24E shows that the assembly segment will contribute RMB 94,853 million, while the components segment is expected to generate RMB 44,758 million [6]. - The automotive intelligent segment is projected to grow significantly, contributing RMB 19,428 million in FY24E, with a year-on-year growth of 40% [6]. Valuation - The target price of HK$45.15 is derived from a sum-of-the-parts (SOTP) valuation, reflecting the company's diversified business model and growth potential across different segments [10][9]. - The report assigns a P/E multiple of 15x for the assembly and component businesses, while a higher multiple of 20x is assigned to the new intelligent and NEV segments due to their growth prospects [10].

Investment Rating - The report maintains a "Buy" rating for BYD with a target price of HKD 45.15, based on a P/E ratio of 17.2x for FY24E [2][9]. Core Insights - BYD is expected to see significant growth in FY24E, driven by various segments including consumer electronics, NEV (New Energy Vehicles), and AI server technologies. The company anticipates over 40% sales growth in its automotive segment and strong contributions from its AI and smart technology initiatives [2][9]. - The report highlights the recovery of profit margins in the Android business and expansion in the Apple business, which are expected to enhance overall profitability [9]. Financial Summary - Revenue is projected to grow from RMB 129,957 million in FY23A to RMB 181,168 million in FY24E, reflecting a year-on-year growth of 39.4% [1][5]. - Net profit is expected to increase from RMB 4,041.4 million in FY23A to RMB 5,382.6 million in FY24E, representing a growth of 33.2% [1][5]. - The earnings per share (EPS) is forecasted to rise from RMB 1.79 in FY23A to RMB 2.39 in FY24E [1][5]. Segment Performance - The assembly segment is projected to contribute significantly to revenue, with a forecast of RMB 94,853 million in FY24E, growing at 13% year-on-year [5]. - The components segment, including metals, plastics, and glass, is expected to see a substantial increase, particularly in FY24E with a projected revenue of RMB 44,758 million, reflecting a year-on-year growth of 228% [5]. - The automotive smart segment is anticipated to grow by 40% year-on-year in FY24E, driven by new product launches and increased shipment volumes [2][5]. Valuation Metrics - The current P/E ratio is noted at 15.2x, which is considered attractive compared to industry peers [2][9]. - The report indicates a projected dividend yield of 2.0% for FY24E, increasing to 3.3% by FY26E [1][5].

Investment Rating - The report maintains a "Buy" rating with a target price of HKD 48.29 per share, indicating a potential upside of 22.1% from the current price of HKD 39.55 [5][13]. Core Insights - The company is expected to benefit from the AI-driven smartphone replacement trend, with a strong partnership with major consumer electronics clients, enhancing its supply chain position [3][6]. - The penetration rate of new energy vehicles (NEVs) in China has reached a new high, with the company's parent, BYD Group, achieving significant sales growth, which is expected to strengthen market competitiveness [8]. - The collaboration with NVIDIA is expanding, allowing the company to develop advanced solutions in various sectors, including AI and autonomous mobile robots [4][9]. Financial Summary - Revenue projections for 2024 to 2026 are RMB 161.31 billion (+24.1%), RMB 180.55 billion (+11.9%), and RMB 201.50 billion (+11.6%) respectively [5][13]. - The net profit forecasts for the same period are RMB 5.04 billion (+24.8%), RMB 6.37 billion (+26.3%), and RMB 7.67 billion (+20.4%) respectively, with an average net profit growth rate of 23.8% over three years [5][13]. - The gross margin is expected to improve from 8.0% in 2023 to 9.2% in 2026, reflecting operational efficiency [14]. Shareholder Information - The major shareholder, Golden Link Worldwide Limited, holds a 65.76% stake in the company, indicating strong control over corporate decisions [2].