Goldman Sachs·2025-05-28 05:45Investment Rating - The report does not provide a specific investment rating for Longcheer (603341.SS) but indicates a positive long-term growth outlook for the company [1][4]. Core Insights - Longcheer is positioned as a market leader in the smartphone ODM sector with a global market share of 33% in 2024, although margins are currently affected by rising raw material costs [4][8]. - The company is optimistic about new business segments, particularly AI glasses and automotive electronics, which are expected to drive future growth [1][8]. - Management anticipates a recovery in margins in 2025 as raw material prices normalize, despite a saturated smartphone market [4][8]. Summary by Sections Smartphone ODM Outlook - Longcheer's smartphone ODM business holds a 33% global market share as of 2024, reflecting its leadership position [4]. - Current margins are pressured by increased raw material costs, but a recovery is expected in 2025 as prices stabilize [4]. - The smartphone market is viewed as saturated, yet AI applications may provide avenues for growth [4][8]. Development of New Business - The AI glasses segment is expected to see increased demand in 2025, supported by new foundational models [8]. - The penetration rate for AI PCs is projected to rise, contributing to a product replacement cycle [8]. - Longcheer's smart cockpit products are in testing and have begun to enter local car OEMs, indicating growth potential in automotive electronics [8].