LY iTECH(SZ:002600) Huaxin Securities·2024-09-01 08:47Investment Rating - The report assigns a "Buy" rating for the company, marking the initial coverage [5]. Core Insights - The company is positioned as a core supplier for Apple, benefiting significantly from the ongoing trends in artificial intelligence and consumer electronics [4][5]. - Despite short-term pressure on performance due to product structure changes, the long-term outlook remains positive as AI technology drives demand for upgraded consumer electronics [4]. Financial Performance Summary - In the first half of 2024, the company achieved revenue of 19.12 billion yuan, a year-on-year increase of 25.06%, while net profit attributable to shareholders was 692 million yuan, a decline of 44.53% [1]. - For Q2 2024, the company reported revenue of 9.32 billion yuan, a year-on-year increase of 15.43%, but a quarter-on-quarter decrease of 4.89% [1]. - The gross profit margin for the company was 15.02%, down 5.46 percentage points year-on-year [1]. Market Trends and Opportunities - The report highlights that AI technology is driving the iteration and upgrade of consumer electronics, with significant growth expected in AI smartphones and AIPC (AI Personal Computers) [4]. - According to IDC, global AI smartphone shipments are projected to reach 912 million units by 2028, with a CAGR of 78.4% from 2023 to 2028 [4]. - The company is expected to benefit from the increasing demand for thermal management solutions as AI devices proliferate, with the global vapor chamber market projected to reach 587 million USD by 2025, growing at a CAGR of 23.5% from 2022 to 2025 [4]. Earnings Forecast - The company’s revenue is forecasted to be 41.34 billion yuan in 2024, 49.60 billion yuan in 2025, and 57.78 billion yuan in 2026, with corresponding EPS of 0.36, 0.43, and 0.57 yuan [5][7]. - The report indicates that the company is expected to maintain a strong growth trajectory, benefiting from its role as a core supplier to Apple amid the acceleration of AI technology [5].