LY iTECH(002600) 国元证券·2024-12-23 08:30Investment Rating - The report initiates coverage with a "Buy" rating for the company, with a target price range of 8.29 to 10.78 yuan for 2025 [19][26]. Core Insights - The company is positioned to benefit from the ongoing AI transformation, with expectations of significant growth in hardware demand, particularly in the smartphone sector, driven by new product launches from major clients like Apple [18][29]. - The company has established a comprehensive overseas production capacity, which enhances its ability to secure new projects and meet client demands [39]. - The automotive and photovoltaic sectors are anticipated to open new growth opportunities for the company, with a focus on expanding its market presence and product offerings [17][82]. Summary by Sections Company Overview - The company, originally founded in 2006, has evolved through strategic acquisitions and expansions into various sectors, including consumer electronics, automotive, and photovoltaic products [34][71]. - The revenue structure indicates a strong reliance on consumer electronics, with a significant portion of revenue coming from overseas clients, which accounted for 72% in the first half of 2024 [34][36]. Investment Thesis - The company is actively expanding its product lines in response to the growing demand for AI-enabled devices, including foldable screens and wearables, which are expected to drive revenue growth [3][31]. - The report highlights the company's strong relationships with major clients, which are crucial for maintaining competitive advantages and driving innovation [31][69]. Financial Projections - The projected net profits for 2024 and 2025 are 21.1 billion yuan and 29.7 billion yuan, respectively, with corresponding EPS of 0.30 and 0.42 yuan [19][92]. - The company is expected to see a revenue increase driven by the anticipated growth in the AI hardware market and the expansion of its automotive and photovoltaic businesses [18][82]. Market Opportunities - The global market for foldable smartphones is projected to reach 105.3 billion USD by 2025, with a compound annual growth rate of 117% from 2019 to 2025, presenting a significant opportunity for the company [13]. - The company is also focusing on the electric vehicle market, where it has established itself as a key supplier of structural components for battery systems, with expected revenue growth from new contracts [6][8].