CSC SECURITIES (HK) LTD·2025-11-25 08:39Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside in the stock price [7][9]. Core Insights - Despite a 32% decline from its peak due to short-term concerns over appliance subsidies and cost pressures, the report suggests this presents a good buying opportunity. The long-term investment thesis remains intact, supported by Chairman Lei Jun's significant stock buyback, the automotive business achieving profitability, and strong quarterly performance [7][9]. - The company is positioned as a dual leader in the electric vehicle and consumer electronics sectors, with a current price corresponding to a 2027 P/E ratio of only 15 times, making it attractive for investment [7][9]. Financial Summary - For the fiscal year ending December 31, 2023, the company is projected to achieve a net profit of RMB 17,475 million, with a year-on-year growth of 606%. This is expected to increase to RMB 42,320 million by 2025, reflecting a 79% growth [8][12]. - The earnings per share (EPS) is forecasted to rise from RMB 0.7 in 2023 to RMB 1.63 in 2025, indicating a 600% increase year-on-year [8][12]. - The company's revenue is expected to grow from RMB 270,970 million in 2023 to RMB 495,673 million in 2025, representing a significant increase [12]. Business Segmentation - The product mix is heavily weighted towards mobile and IoT products, accounting for 91% of total revenue, while the automotive segment contributes 9% [3]. - In Q3 2025, the company reported a revenue of RMB 1,131 billion, a year-on-year increase of 22.3%, with a net profit of RMB 122.7 million, reflecting a 129% increase year-on-year [9].