LUXSHARE-ICT(SZ:002475) SPDB International·2025-11-03 07:22Investment Rating - The report maintains a "Buy" rating for the company, Luxshare Precision (002475.CH), with a target price raised to RMB 74.3, indicating a potential upside of 18% from the current price of RMB 63.00 [1][5]. Core Insights - The company is expected to experience steady growth in consumer electronics, with accelerated growth in data centers and automotive sectors. The guidance for 2025 indicates a robust growth in net profit, projected to increase by 26% year-on-year [5][7]. - The report highlights strong performance in Q3 2025, with revenue reaching RMB 96.4 billion, a 31% increase year-on-year, and a 54% increase quarter-on-quarter. The gross margin improved to 12.8%, reflecting growth driven by high-quality expansion in automotive and data center businesses [7][8]. Financial Projections - Revenue projections for 2023 to 2027 are as follows: - 2023: RMB 231.9 billion - 2024: RMB 268.8 billion - 2025E: RMB 333.6 billion - 2026E: RMB 391.1 billion - 2027E: RMB 434.5 billion - The expected revenue growth rates are 8.4% for 2023, 15.9% for 2024, 24.1% for 2025, 17.2% for 2026, and 11.1% for 2027 [2][6]. Profitability Metrics - The net profit forecast for 2025 is RMB 17.0 billion, with a growth rate of 27%. The report also anticipates a net profit of RMB 22.0 billion in 2026, reflecting a 29% increase [2][8]. - The gross margin is projected to improve from 11.6% in 2023 to 12.9% in 2027, indicating enhanced profitability [2][6]. Valuation - The valuation approach uses a sum-of-the-parts method, assigning target price earnings ratios for different business segments, leading to a target price of RMB 74.3, corresponding to a 2025 target P/E ratio of 31.7x [5][9]. - The report provides detailed segment valuations, with consumer electronics valued at 29x, automotive at 38x, and communications at 45x [9][10].