Investment Rating - The report maintains a "Buy" investment rating for BYD Electronic with a target price of HKD 38.70, which corresponds to a price-to-earnings ratio of 15.1x for 2024, 12.0x for 2025, and 10.4x for 2026 [1][2]. Core Insights - BYD Electronic's Q1 2024 earnings met market expectations, with revenue and net profit reaching RMB 36.48 billion (up 38.3% year-on-year) and RMB 610 million (up 33.0% year-on-year), respectively. The gross margin decreased by 0.8 percentage points to 6.9% due to changes in product mix [1][2]. - The company is expected to continue strong profit growth, driven by contributions from the acquisition of the Jabil factory, recovery in the Android business, and the mass production of smart driving and suspension products. Revenue is projected to grow by over 30% starting in 2024 [1][2]. - The expansion into artificial intelligence is anticipated to exceed market expectations, leveraging long-standing partnerships with NVIDIA and expertise in cooling technologies from the automotive sector [2]. Summary by Sections Financial Performance - Q1 2024 revenue was RMB 36.48 billion, a 38.3% increase year-on-year, while net profit was RMB 610 million, reflecting a 33.0% year-on-year growth. The gross margin was 6.9%, down 0.8 percentage points [1][2]. Business Growth Drivers - The acquisition of the Jabil factory is expected to enhance production efficiency and profitability. The recovery of the Android business and the introduction of new smart driving products are also key growth factors [1][2]. - The company is actively replicating its automation and lean management practices at the Jabil factory, which is expected to significantly improve profitability [1]. Artificial Intelligence Expansion - BYD Electronic has a long-standing relationship with NVIDIA, which positions it well for growth in AI servers and AMR robots. The company plans to leverage its existing technologies and experience in cooling systems to enhance its offerings in these new markets [2].
2024年第一季度盈利符合市场预期；人工智能业务扩张超市场预期