LUXSHARE-ICT(SZ:002475)2025-11-24 01:46Investment Rating - The investment rating for Luxshare Precision Industry is "Buy" with a target price of Rmb78.00, indicating an expected share price return of 38.0% and an expected total return of 38.6% [7]. Core Insights - The report highlights multiple drivers fueling future growth for Luxshare, including strong performance in the communication and vehicle businesses, solid key customer relationships, and limited impact from memory price fluctuations [1][9]. - The communication business is expected to maintain a high growth target for 2026, with steady domestic growth and rapid overseas expansion anticipated [2]. - The vehicle business, particularly the Leoni segment, is outperforming expectations, with profitability targets likely to be achieved ahead of schedule [3]. - The wearable devices segment is projected to perform positively in 2026, while smartphone shipments are expected to remain stable with improved product mix and average selling price [4]. - The Wingtech business is focusing on operational efficiency and profitability rather than volume growth [5]. Summary by Sections Communication Business - The communication business is set for high growth in 2026, with domestic growth steady and overseas projects expected to break through in the coming quarters [2]. - Luxshare is a leader in electrical interconnect solutions, particularly in 448G connectivity, which secures strategic cooperation with upstream suppliers [2]. Vehicle Business - The Leoni business is performing better than expected, with the potential to exceed breakeven targets this year and achieve prior profit targets a year ahead [3]. - The focus for the first three years will be on operational improvement and profitability, leveraging Leoni's global exposure for North American expansion [3]. Key Customer Business - Luxshare is optimistic about the wearable devices market for 2026, including smartwatches and TWS buds, while smartphone shipments are expected to remain similar to 2025 but with an improved product mix and average selling price [4]. Wingtech Business - The priority for the Wingtech business is to enhance operational efficiency and profitability, with less emphasis on volume or market share [5].