Apple(US:AAPL) Guotai Junan Securities·2024-08-02 14:01Investment Rating - The report maintains an "Overweight" rating for Apple Inc (AAPL O) with a target price of $274 based on FY2025 P/E of 36x [16][24][29] Core Views - Apple's FY24 Q3 revenue reached $85 8 billion (+4 9% YoY) exceeding consensus estimates of $84 5 billion Net profit was $21 5 billion (+7 9% YoY) also above expectations of $20 7 billion [29] - iPhone revenue declined slightly by 0 9% YoY to $39 3 billion but exceeded expectations of $39 billion iPad revenue surged 23 7% YoY to $7 2 billion beating estimates of $6 63 billion [29] - Services revenue grew 14% YoY to $24 2 billion higher than the expected $24 billion contributing to a 1 7 percentage point increase in gross margin to 46 3% [29] - Apple Intelligence is expected to drive a new upgrade cycle particularly with the iPhone 16 launch in CY24 Q4 (FY25 Q1) potentially reshaping the operating system ecosystem and creating new monetization opportunities [29] Financial Performance - Revenue for FY2024E is forecasted at $389 5 billion (+1 6% YoY) with GAAP net profit of $103 4 billion (+6 6% YoY) [18][24] - For FY2025E revenue is projected at $420 9 billion (+8 1% YoY) with GAAP net profit of $113 8 billion (+10% YoY) [18][24] - FY2026E revenue is estimated at $453 9 billion (+7 8% YoY) with GAAP net profit of $123 7 billion (+8 7% YoY) [18][24] Product Performance - iPhone revenue decreased 0 9% YoY to $39 3 billion in CY Q2 but exceeded expectations of $39 billion [29] - iPad revenue increased 23 7% YoY to $7 2 billion surpassing estimates of $6 63 billion [29] - Mac revenue grew 2 5% YoY to $7 billion [29] - Wearables Home & Accessories revenue declined 2 3% YoY to $8 1 billion [29] Market and Industry Analysis - Apple Intelligence is expected to drive a new upgrade cycle particularly with the iPhone 16 launch in CY24 Q4 (FY25 Q1) potentially reshaping the operating system ecosystem and creating new monetization opportunities [29] - The integration of ChatGPT into Apple Intelligence is anticipated by the end of the year with some features expected to be rolled out in phases [29] Financial Projections - Revenue for FY2024E is forecasted at $389 5 billion (+1 6% YoY) with GAAP net profit of $103 4 billion (+6 6% YoY) [18][24] - For FY2025E revenue is projected at $420 9 billion (+8 1% YoY) with GAAP net profit of $113 8 billion (+10% YoY) [18][24] - FY2026E revenue is estimated at $453 9 billion (+7 8% YoY) with GAAP net profit of $123 7 billion (+8 7% YoY) [18][24]