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].

Investment Rating - The report assigns a "Buy" rating to BYD Electronics with a target price of HKD 54, indicating a potential upside of 36% from the current stock price of HKD 39.55 [2][3]. Core Insights - BYD Electronics reported a 38.3% year-on-year increase in revenue for Q1 2024, reaching RMB 36.5 billion, with a net profit growth of 33% [2]. - The acquisition of Jabil's manufacturing operations in Chengdu and Wuxi for RMB 15.8 billion is expected to enhance operational capabilities and contribute positively to net profit despite incurring financial costs in the short term [2]. - The automotive electronics segment is projected to grow significantly, with expected revenue growth of 50% in 2024, driven by high-value new products [2]. - The company is expanding its business boundaries into AI servers, home energy storage, smart home devices, gaming hardware, and drones, indicating a diversification strategy [2]. Financial Summary - For the fiscal year ending December 31, 2022, BYD Electronics reported total revenue of RMB 107.19 billion, with a net profit of RMB 1.86 billion [4]. - Revenue is forecasted to grow to RMB 162.41 billion in 2024, with a net profit of RMB 5 billion, reflecting a growth rate of 25% [4]. - The gross margin is expected to stabilize around 8.3% in 2024, with net profit margins improving to 3.08% [4]. - The company’s earnings per share (EPS) is projected to increase from RMB 1.79 in 2023 to RMB 2.22 in 2024, representing a growth of 23.8% [4].

Investment Rating - The report gives a "Strong Buy" rating for BYD Electronics, with a target price of HKD 49.40, based on a 20x PE for 2024 [2][8]. Core Insights - BYD Electronics is a leading platform-based high-end manufacturing enterprise with comprehensive layouts in consumer electronics, automotive electronics, and AI businesses, driving long-term growth [2][6]. - The company reported revenue of CNY 130.4 billion in 2023, with a year-on-year growth of 20.83%, and expects to achieve a net profit of CNY 4.04 billion, a significant increase of 117.56% year-on-year [20][21]. - The AI business is positioned for growth, with a focus on both cloud and edge computing, and partnerships with major clients like NVIDIA [7][28]. - The consumer electronics segment is expected to benefit from the new iPad product cycle and the recovery of the Android market, with significant contributions from the acquisition of Jabil's mobile manufacturing business [47][55]. - The automotive electronics sector is experiencing rapid growth, supported by the increasing sales of BYD's parent company, BYD Group, which achieved global leadership in electric vehicle sales [66][71]. Summary by Sections Company Overview - BYD Electronics, established in 1995, is a global leader in high-end manufacturing, serving various sectors including smartphones, IoT, and electric vehicles [13][14]. - The company has a strong focus on R&D and precision manufacturing capabilities, providing a wide range of products and services [16][24]. AI Business - The AI segment includes cloud-based servers and autonomous mobile robots (AMR), leveraging partnerships with NVIDIA to enhance capabilities [28][36]. - The company is developing a comprehensive range of server products, including AI servers and liquid cooling solutions, to support data center growth [36][39]. Consumer Electronics - BYD Electronics is a key supplier for major clients like Apple, with expectations of benefiting from the upcoming iPad product launches and the recovery in the Android market [47][49]. - The acquisition of Jabil's mobile manufacturing business is expected to enhance the company's position in the smartphone component market [50][54]. Automotive Electronics - The automotive electronics market is expanding rapidly, with BYD Electronics benefiting from the growth of its parent company, BYD Group, which is a leader in the electric vehicle market [66][71]. - The company is actively expanding its product lines and customer base in the automotive sector, focusing on smart cockpit and autonomous driving technologies [72][74]. New Intelligent Terminals - BYD Electronics is positioned to benefit from the growth of the drone market, being a core supplier for DJI, as the low-altitude economy gains traction [74][75]. - The company has also entered the electronic cigarette market, completing its product lineup and production capacity [75].

Investment Rating - The report gives a "Buy" rating for the company, indicating a positive outlook for its stock performance [2][4][58]. Core Insights - The company is a leading platform-based high-end manufacturing enterprise, benefiting from the recovery in consumer electronics driven by AI applications, and is expected to maintain strong growth in its electric vehicle and new intelligent product segments [5][58]. - The company has achieved a revenue CAGR of 23.2% and a net profit CAGR of 20.1% from 2013 to 2023, showcasing its high-quality growth [2][12]. - The acquisition of Jabil (Singapore) is expected to contribute positively to profit growth and expand the company's market presence in consumer electronics [22][25]. Summary by Sections 1. Company Overview - The company is a subsidiary of BYD, established in 1995 and listed in Hong Kong in 2007, focusing on electronic product design, manufacturing, and sales [12][13]. - It has diversified operations across various sectors, including smartphones, new energy vehicles, and smart home products, with a strong emphasis on high-quality manufacturing [12][16]. 2. Consumer Electronics Business - The consumer electronics segment accounted for 75% of total revenue in 2023, with a focus on high-end products and partnerships with major clients [2][17]. - The segment is expected to benefit from the recovery in demand driven by AI applications, with projected revenue growth of 10% annually from 2024 to 2026 [4][51]. 3. New Energy Vehicles - The company's new energy vehicle business is supported by BYD's strong market position and is projected to grow at a rate of 25% annually from 2024 to 2026 [4][51]. - The increasing penetration of electric vehicles in China is expected to drive significant growth in this segment [47][50]. 4. AI Server Market - The company is actively investing in AI server development, aiming to tap into the growing demand for AI capabilities and has established a partnership with NVIDIA [3][43]. - The global AI server market is expected to grow significantly, with the company positioned to benefit from this trend [40][41]. 5. Financial Projections - The company forecasts net profits of 50.66 billion, 63.29 billion, and 75.93 billion RMB for 2024, 2025, and 2026, respectively [4][58]. - The average PE ratio for comparable companies is projected at 20X, while the company’s PE for 2024 is estimated at 14X, indicating potential undervaluation [4][58].

Investment Rating - The report maintains a "Buy" rating for BYD Electronics, indicating an expected performance that will outperform the market by over 20% [6][12]. Core Insights - The report highlights that BYD Electronics is expected to benefit from the growth in server and AMR (Autonomous Mobile Robot) businesses, which will enhance mid-term growth prospects. The company is also focusing on high-end automotive electronics as part of its strategic shift towards smart and high-end products [6][8]. - The net profit forecasts for 2024 and 2025 have been adjusted downwards to 5 billion and 6 billion CNY respectively, due to the impact of intangible asset amortization. However, the long-term outlook remains positive with a projected net profit of 6.8 billion CNY in 2026, reflecting a growth rate of 23% [6]. - The company is set to be included in the Hang Seng Index, which is expected to attract passive index fund investments, further supporting its stock performance [7]. Financial Summary and Valuation Metrics - Revenue is projected to grow from 129.96 billion CNY in 2023 to 163.51 billion CNY in 2024, representing a year-on-year growth of 25.8% [8]. - The net profit is expected to increase from 4.04 billion CNY in 2023 to 4.98 billion CNY in 2024, with a year-on-year growth of 23.2% [8]. - The report provides a detailed financial outlook with projected EPS of 2.2 CNY for 2024, increasing to 3.0 CNY by 2026, and corresponding P/E ratios of 14.4, 11.9, and 10.6 for the years 2024, 2025, and 2026 respectively [6][8].

Investment Rating - The report maintains a "Buy" investment rating for BYD Electronic with a target price of HKD 38.70, which corresponds to a price-to-earnings ratio of 15.1x for 2024, 12.0x for 2025, and 10.4x for 2026 [1][2]. Core Insights - BYD Electronic's Q1 2024 earnings met market expectations, with revenue and net profit reaching RMB 36.48 billion (up 38.3% year-on-year) and RMB 610 million (up 33.0% year-on-year), respectively. The gross margin decreased by 0.8 percentage points to 6.9% due to changes in product mix [1][2]. - The company is expected to continue strong profit growth, driven by contributions from the acquisition of the Jabil factory, recovery in the Android business, and the mass production of smart driving and suspension products. Revenue is projected to grow by over 30% starting in 2024 [1][2]. - The expansion into artificial intelligence is anticipated to exceed market expectations, leveraging long-standing partnerships with NVIDIA and expertise in cooling technologies from the automotive sector [2]. Summary by Sections Financial Performance - Q1 2024 revenue was RMB 36.48 billion, a 38.3% increase year-on-year, while net profit was RMB 610 million, reflecting a 33.0% year-on-year growth. The gross margin was 6.9%, down 0.8 percentage points [1][2]. Business Growth Drivers - The acquisition of the Jabil factory is expected to enhance production efficiency and profitability. The recovery of the Android business and the introduction of new smart driving products are also key growth factors [1][2]. - The company is actively replicating its automation and lean management practices at the Jabil factory, which is expected to significantly improve profitability [1]. Artificial Intelligence Expansion - BYD Electronic has a long-standing relationship with NVIDIA, which positions it well for growth in AI servers and AMR robots. The company plans to leverage its existing technologies and experience in cooling systems to enhance its offerings in these new markets [2].

Investment Rating - The report maintains a "BUY" rating for BYD Electronic with a target price of HKD 41.35, indicating an upside potential of +54.3% from the current price of HKD 27.10 [2][10]. Core Insights - BYD Electronic's 1Q24 results were in line with expectations, showing revenue growth of 38.5% year-on-year to RMB 36.5 billion and net profit growth of 33% to RMB 610 million, primarily driven by the consolidation of Jabil Singapore [2][3]. - The company is expected to benefit from increased project wins from US clients following the acquisition of Jabil, which positions BYD Electronic as a strategic partner for flagship projects [2][3]. - The generative AI smartphone market is anticipated to drive a new replacement cycle, with shipments expected to grow significantly from 4% in 2023 to 8% in 2024, potentially reaching 522 million units by 2027 [4]. Financial Performance - BYD Electronic's assembly service revenue grew by 23% year-on-year in FY23, while components revenue saw a decline of approximately 4% year-on-year [3]. - The automotive intelligent segment revenue surged by 52% year-on-year to RMB 14.1 billion in FY23, reflecting strong demand for electrification and intelligent systems [7]. - The IoT and automotive segments are projected to achieve over 20% growth in the next 2-3 years, with revenue expected to reach approximately RMB 40 billion to RMB 50 billion in FY24E-25E [7][9]. Earnings Forecast - The report has adjusted BYD Electronic's FY24E and FY25E earnings forecasts, projecting a revenue growth of 25.8% and a net profit growth of 20.0% CAGR from FY23 to FY26E [9][11]. - The company is expected to maintain a gross margin of around 8.0% to 9.0% in the coming years, supported by improved product mix and operational efficiencies [9][11]. Market Position and Strategy - BYD Electronic is diversifying its business away from smartphone-related activities, focusing on IoT and automotive segments as key growth drivers [9][10]. - The company has established a strategic partnership with NVIDIA, which will enhance its capabilities in AI products, including customized servers for internet customers [6][9].

Financial Performance - Revenue for the three months ended March 31, 2024, was RMB 36,480,479 thousand, representing a 38.31% increase compared to RMB 26,374,934 thousand in the same period of 2023[1] - Gross profit for the same period was RMB 2,509,073 thousand, up 23.59% from RMB 2,030,103 thousand year-over-year[1] - Profit attributable to equity holders of the parent company was RMB 610,410 thousand, reflecting a 33.01% increase from RMB 458,924 thousand in the prior year[1] - Basic and diluted earnings per share were RMB 0.27, an increase of 33.01% compared to RMB 0.20 in the same period last year[1] Assets and Liabilities - Total assets as of March 31, 2024, were RMB 77,446,205 thousand, down 11.20% from RMB 87,218,620 thousand as of December 31, 2023[1] - Total liabilities decreased by 17.94% to RMB 47,504,346 thousand from RMB 57,888,231 thousand[1] - Net asset value increased by 2.08% to RMB 29,941,859 thousand from RMB 29,330,389 thousand[1]

Economic Performance - In 2023, BYD Electronic achieved a year-on-year growth of 5.2% in China's GDP, with total economic output surpassing RMB 126 trillion[11]. - The demand in the consumer electronics market remains under pressure due to high global inflation and macroeconomic uncertainties[12]. - The company is focused on high-quality development and macro-control policies to navigate global economic challenges[11]. Market Trends - Global smartphone shipments decreased by 3.2% to 1,170 million units in 2023, while global PC shipments fell by 13.9% to 260 million units[12]. - In the Chinese market, mobile phone shipments amounted to 289 million units in 2023, reflecting a year-on-year increase of approximately 6.5%[12]. - 5G smartphone shipments in China increased by approximately 11.9% year-on-year to 240 million units[12]. - The global consumer electronics market is expected to recover, driven by AI technology integration and innovative product launches, with shipments of generative AI smartphones projected to exceed 100 million units in 2024[35]. - The global PC market is anticipated to see a 3.4% increase in shipments in 2024, driven by the natural replacement cycle and the introduction of AI-enabled PCs[35]. Company Growth and Strategy - The company continues to leverage its core advantages in electronic information, AI, 5G, and IoT technologies to provide innovative product solutions[3]. - BYD Electronic is engaged in diverse market areas, including smartphones, new energy vehicles, and smart home technologies[3]. - The company is committed to expanding its market presence and enhancing its product offerings through technological advancements[3]. - BYD Electronic's strategic initiatives include exploring new product development and potential acquisitions to drive growth[3]. - The Group plans to continue expanding its customer resources and product matrix to achieve long-term sustainable growth[23]. Financial Performance - The Group recorded sales of approximately RMB 129,957 million in 2023, reflecting a year-on-year increase of approximately 21.24%, while profit attributable to the owners of the parent increased by 117.56% to RMB 4,041 million[16]. - The consumer electronics business recorded revenue of RMB 97,420 million, representing an increase of approximately 18.50% year on year[28]. - Revenue from the new intelligent products business was approximately RMB 18,441 million, accounting for 14.19% of total revenue, with a year-on-year increase of 21.27%[30]. - The Group's capacity utilization rate continued to increase, further improving profitability[26]. - Gross profit increased by approximately 64.31% to around RMB 10,434 million, with gross profit margin rising from approximately 5.92% in 2022 to approximately 8.03%[51][52]. New Energy Vehicles - In 2023, the sales volume of new energy vehicles in China reached 9.495 million units, representing a year-on-year growth of 37.9%, with market share increasing from 25.6% in 2022 to 31.6%[15]. - The new energy vehicle market in China has ranked first in the world for nine consecutive years, indicating strong market leadership[21]. - The export volume of new energy vehicles was 1.203 million units, reflecting a year-on-year growth of 77.6%[32]. - The revenue from the new energy vehicle business segment amounted to approximately RMB 14.096 billion, accounting for 10.85% of total revenue, marking an increase of approximately 52.17% compared to the same period in 2022[32]. - Global new energy vehicle sales are expected to surpass 18 million units in 2024, with China's sales reaching 11.5 million units, including exports, and an electrification penetration rate exceeding 37%[41]. Corporate Governance - The Company emphasizes the importance of good corporate governance to enhance confidence among shareholders and stakeholders[102]. - The Board is collectively responsible for formulating the development strategy and overseeing management performance[104]. - The Company has implemented corporate governance practices in line with the principles of the Corporate Governance Code, ensuring transparency and accountability[102]. - The Board held nine meetings during the year to discuss overall strategy, operational and financial performance[108]. - The Company has established an Audit Committee consisting of five members, including three independent non-executive Directors, to oversee financial reporting and risk management[124]. Leadership and Management - Mr. Wang Chuan-fu, the chairman and president of BYD, has been recognized as one of China's 50 Most Influential Business Leaders in 2023 by Fortune magazine[86]. - BYD's leadership includes Mr. Wang Bo, who has been responsible for marketing and sales since the company's listing on the Stock Exchange[88]. - The Company has expanded its leadership team with experienced professionals from various sectors, enhancing its strategic direction[89]. - The Board of Directors consists of seven members, including two executive Directors, two non-executive Directors, and three independent non-executive Directors, ensuring a balanced composition[106]. Environmental, Social, and Governance (ESG) - The company aims to align its business strategies with national goals of carbon peak emissions and carbon neutrality by 2030 and 2060, respectively[194]. - The Board recognizes the importance of integrating ESG matters into business strategy for long-term development[198]. - The Company has implemented a proactive investor relations policy to ensure timely access to information for making investment decisions[183]. - The ESG Committee manages and supervises the Company's corporate social responsibility performance[198]. - The report adheres to the "Environmental, Social and Governance Reporting Guide" under the Hong Kong Stock Exchange rules, ensuring compliance with the latest provisions[188].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][3] Core Insights - The company has shown steady revenue growth, with Q4 revenue reaching 37.8 billion RMB, a year-on-year increase of 5%, and total annual revenue of 130 billion RMB, up 21% year-on-year. Key drivers include increased supply share from overseas major clients and rapid growth in the automotive smart products segment [2] - The gross profit margin for 2023 improved by 2.1 percentage points to 8%, marking a historical high, attributed to product structure optimization and enhanced operational efficiency. The net profit attributable to the parent company reached 4 billion RMB, a significant increase of 118% year-on-year [2] - The acquisition of Jabil's related assets at the end of 2023 is expected to contribute additional revenue, primarily by providing high-end mobile phone components to overseas major clients, thus expanding the company's supply range [2][3] Financial Summary - For 2024, the company is projected to achieve revenue of 161.1 billion RMB, with a year-on-year growth rate of 24%. The net profit attributable to the parent company is expected to be 5.1 billion RMB, reflecting a growth of 27% [3] - The financial forecasts for 2024-2026 indicate revenues of 161.1 billion RMB, 182.8 billion RMB, and 190.7 billion RMB respectively, with corresponding net profits of 5.1 billion RMB, 6.1 billion RMB, and 7.3 billion RMB [3][6] - The company's reasonable market value is estimated at 79.3 billion HKD, equivalent to approximately 35 HKD per share, based on a 12x P/E ratio for 2025 [3]