LY iTECH(002600) 德邦证券·2024-08-22 11:41Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for its stock performance [1][5]. Core Insights - The company, Lingyi Technology (002600.SZ), is a leading enterprise in precision manufacturing for consumer electronics, benefiting from the AI terminal wave [3][4]. - In 2023, the company achieved revenue of 34.1 billion yuan and a net profit of 2.051 billion yuan, with a gross margin of 19.9% and a net margin of 6.0% [3][5]. - The company has a strong cash flow and is expanding its revenue from new business areas, with overseas revenue accounting for nearly 70% in 2023 [3][5]. Company Strength - Lingyi Technology was established in 2006 and went public in 2018 through a merger with Jiangfen Magnetic Materials. It has expanded from die-cutting to various manufacturing processes, including stamping, CNC machining, injection molding, and ODM services [3][12]. - The company serves major clients such as Apple, Huawei, OPPO, and Samsung, and has diversified into new sectors like electric vehicles and photovoltaic energy [3][4][12]. Consumer Electronics - The consumer electronics sector is expected to benefit from the innovation driven by generative AI, with a recovery in demand anticipated in the second half of 2023 [4][50]. - The company is well-positioned to capitalize on the upcoming upgrade cycle for AI smartphones and foldable devices, which are expected to drive sales growth [4][52][77]. New Fields - The electric vehicle and photovoltaic storage sectors are projected to maintain high growth rates, with the company already supplying precision structural components for battery systems [4][89]. - In 2023, the automotive business generated approximately 1.697 billion yuan in revenue, reflecting a growth of over 40% year-on-year [4][93]. Financial Performance - The company forecasts revenues of 40.995 billion yuan, 50.086 billion yuan, and 58.210 billion yuan for 2024, 2025, and 2026, respectively, with corresponding net profits of 1.903 billion yuan, 3.003 billion yuan, and 4.022 billion yuan [5][109]. - The projected price-to-earnings (P/E) ratios for 2024, 2025, and 2026 are 26.07, 16.52, and 12.34, respectively, indicating significant potential for valuation improvement [5][112]. Competitive Advantages - The company emphasizes a globalized layout and strong R&D capabilities, which enhance its long-term growth potential [3][39]. - A new round of stock option incentives is set to activate core employee interests, further supporting the company's strategic goals [5][44].