LUXSHARE-ICT(002475) 东方证券·2024-09-20 00:07Investment Rating - The report initiates coverage with a Buy rating and sets a target price of 43.70 RMB for the stock [2] Core Views - The company is a leading precision manufacturing platform with diversified business prospects, spanning consumer electronics, automotive electronics, and communications [1] - AI-driven innovation cycles in consumer electronics, particularly with North American clients, are expected to drive growth, with the company benefiting from increased assembly share and product value [1] - The automotive and communications sectors are emerging as the company's second growth curve, with significant revenue growth in automotive business reaching 9.25 billion RMB in 2023, a 50% YoY increase [1] Financial Performance - Revenue for 2023 reached 231.905 billion RMB, an 8.4% YoY increase, with net profit attributable to shareholders at 10.953 billion RMB, up 19.5% YoY [3] - The company's EPS is projected to grow from 1.90 RMB in 2024 to 3.02 RMB in 2026, with a CAGR of 23.0% [3] - Gross margin and net margin are expected to improve slightly, with net margin reaching 6.2% by 2026 [3] Business Segments Consumer Electronics - The company has a strong foothold in consumer electronics, contributing 88% of total revenue in 2023, with deep integration into Apple's supply chain [18] - The company is expected to benefit from Apple's AI-driven innovation cycles, particularly in iPhone assembly and Vision Pro production [23][24] Automotive - The automotive business has seen rapid growth, with revenue reaching 9.25 billion RMB in 2023, a 50% YoY increase, driven by product diversification and strong client relationships [1][18] - The company is expanding its automotive product portfolio, including wire harnesses, connectors, and smart cockpit solutions, with a focus on electric and autonomous vehicles [42][43] Communications - The communications business is poised for growth, with the company expanding its product lines to include high-speed connectors, optical modules, and thermal management solutions [57] - The company is well-positioned to capitalize on the growing demand for AI servers and data center infrastructure, with a focus on high-speed interconnect technologies [55][57] Strategic Developments - The company has made strategic acquisitions, such as Leoni AG, to strengthen its position in the automotive wire harness market and expand its global footprint [51] - Partnerships with major automakers like Chery and GAC are expected to drive growth in the automotive sector, with a focus on becoming a leading Tier 1 supplier [53][54] Industry Trends - The global AI server market is projected to grow from 19.5 billion USD in 2022 to 34.7 billion USD by 2026, driven by increasing demand for AI and machine learning applications [55] - The automotive industry is shifting towards electrification and smart connectivity, with the company well-positioned to benefit from these trends through its diversified product offerings [42][43]