花旗：中国硬件与半导体行业4-Q24_1Q25业绩总结及库存追踪_业绩再度平淡；半导体库存持续消化

Investment Rating - The report maintains a "Buy" rating for several companies including Xiaomi, Cowell, DSBJ, AAC, Lens Tech, Will Semi, SG Micro, and Chroma ATE, indicating a positive outlook on their growth potential and market positioning [13][14][16]. Core Insights - The semiconductor and hardware sectors in China are experiencing a mixed performance, with some companies benefiting from AI-related demand and localization efforts, while others face challenges due to geopolitical risks and inventory management [1][2][3]. - The report highlights a recovery in consumer electronics driven by China subsidies and AI deployment, with smartphone shipments growing by 1.5% YoY and PC shipments up by 4.9% YoY in 1Q25 [6][7]. - Inventory levels for downstream hardware are generally healthy, with certain segments like CCL, TV, and Networking & Server showing higher than average days inventory outstanding (DIO), while others like LED and Optical Fiber are at lower levels [3][6]. Summary by Sections 4Q24/1Q25 Results Wrap - Among 37 tech hardware and semiconductor stocks, 19% of results beat expectations in 4Q24, while 20% did so in 1Q25, with notable performance from U.S.-exposed AI names and China subsidy-driven companies [2][17]. - The report downgraded BYDE to Neutral due to fair valuation concerns and priced-in growth expectations for 2025 [2]. Inventory Tracker - The inventory tracker indicates that DIO for downstream hardware segments like LED and Optical Fiber is below the 5-year average, while segments like CCL and TV are above average [3]. - Upstream semiconductor DIO shows a decline in several categories, with Processor DIO reaching a 3-year high, indicating a shift in demand dynamics [3]. Sector Views and Top Picks - DSBJ is expected to achieve a 30% earnings CAGR from 2023-2026, driven by content value increases and market share gains [13]. - Xiaomi is highlighted for its long-term growth potential in EVs and smartphones, with a target price of HK$73.5 based on a sum-of-the-parts valuation [14]. - Cowell is noted for its strong earnings visibility and expected share gains in the iPhone supply chain, with a target price of HK$27.0 [14]. - Lens Tech is anticipated to benefit from iPhone upgrades and new product rollouts, with a target price of Rmb25.0 [14]. Semiconductor Sector Insights - Chinese semiconductor makers are seeing improved inventory balances, with strong demand growth in domestic AI infrastructure and computing applications [16]. - Will Semi and SG Micro are positioned to benefit from localization trends and increasing demand for automotive components [16]. - Chroma ATE is expected to capture significant market share in AI-related orders, with a positive long-term outlook despite short-term market concerns [16].