Core Viewpoint - Bank of America Securities reports that BYD Electronics (00285) underperformed expectations in Q3, with a net profit of 1.4 billion RMB, reflecting a 27% quarter-on-quarter increase but a 9% year-on-year decrease, only achieving 29% and 27% of the bank's and market's annual forecasts respectively, which is below the 32-38% range of the past three years [1] Financial Performance - Q3 net profit was 1.4 billion RMB, a 27% increase from the previous quarter but a 9% decrease year-on-year [1] - The quarterly gross margin declined by 0.5 percentage points quarter-on-quarter and 1.6 percentage points year-on-year to 6.9% [1] Forecast Adjustments - Bank of America Securities has lowered its earnings forecasts for BYD Electronics for 2025 to 2027 by 4% to 8% to reflect the slowdown in Q3 growth and a lackluster outlook [1] - The target price has been reduced from 45.5 HKD to 40 HKD, while maintaining the 2026 forecast P/E ratio at 14 times [1] Valuation Comparison - The stock is currently trading at a 2026 expected P/E ratio of 13 times, which is significantly lower than the average P/E ratio of 26 times for peers in the Apple supply chain, indicating it is undervalued based on reasonable valuation [1] - The rating has been reaffirmed as "Neutral" based on the valuation assessment [1]