LUXSHARE-ICT(SZ:002475) SPDB International·2025-08-28 06:41Investment Rating - The report maintains a "Buy" rating for the company, Lixun Precision, with a target price of RMB 52.8, indicating a potential upside of 17% from the current price of RMB 44.98 [1][5][22]. Core Insights - The company has shown steady growth in net profit, with a year-on-year increase of 23% in Q2 and an expected median growth of 22% in Q3. This growth is attributed to the synergy across various business segments, particularly in components and assembly for major clients, as well as significant revenue growth in the communications and automotive sectors [5][7]. - The report highlights that the automotive business, including the recently consolidated Lainie and ODM business, is expected to contribute positively to both revenue and profit in the coming years. Additionally, the company is poised for growth in AI servers and automotive smart cockpit technologies [5][9]. Financial Projections - Revenue projections for Lixun Precision are as follows: - 2023: RMB 231,905 million - 2024: RMB 268,795 million - 2025E: RMB 329,659 million (22.6% YoY growth) - 2026E: RMB 386,681 million (17.3% YoY growth) - 2027E: RMB 429,648 million (11.1% YoY growth) [2][6][9]. - Net profit projections are: - 2023: RMB 10,953 million - 2024: RMB 13,366 million - 2025E: RMB 16,673 million (25% YoY growth) - 2026E: RMB 20,937 million (26% YoY growth) - 2027E: RMB 25,418 million (21% YoY growth) [2][6][9]. Valuation - The report employs a sum-of-the-parts valuation method, assigning target price-to-earnings ratios for different business segments: - Consumer Electronics: 21x - Computers: 10x - Automotive: 35x - Communications: 34x - Industrial and Others: 20x - This results in a target price of RMB 52.8, reflecting a potential upside of 17% [5][10].