Core Viewpoint - BYDE's 1H25 results showed mixed performance with revenue and net profit growth of 2.6% and 14.0% respectively, attributed to stringent cost control measures [1][2] Financial Performance - Revenue reached RMB 80.6 billion, which was approximately 6% below Bloomberg consensus, while net profit of RMB 1,730 million was largely in line with expectations [2] - Gross margin improved by 0.1 percentage points year-on-year to 6.9%, although it fell short of the FY25E consensus of 7.3% [2] - The R&D ratio decreased to 2.8% of revenue, down from 3.1%, due to many AIS projects entering mass production [2] - A reversal of RMB 43.6 million in financial assets' impairment also supported the bottom line [2] Segment Performance - The automotive intelligent segment (AIS) revenue surged 60.5% year-on-year to RMB 12.5 billion, accounting for 15% of total revenue [7] - New intelligent products revenue rose 29% year-on-year to RMB 19.7 billion, representing 24% of total revenue [5] - AIS revenue is expected to reach over RMB 30 billion and RMB 40 billion in FY25E and FY26E respectively, contributing mid-teens to high-teens of total revenue [10] Future Outlook - Management provided a stable outlook for 2H25 in consumer electronics, expecting more high-end project wins from key US clients [4] - BYDE anticipates Jabil business growth exceeding 50% year-on-year, driven by increased adoption of titanium casing and expansion into non-smartphone projects [5] - AI server-related business revenue exceeded RMB 1 billion in 1H25, with expectations for mass shipments starting in 2H25 [5][6] - The company aims to capture downstream demand in AI servers and optical module products, with plans for mass production of 800G optical transceivers [6] Investment Perspective - BYDE's share price has corrected approximately 12% from recent highs, trading at a FY26E PE of 13.9x, which is an 11% discount to the 5-year average [12] - The company maintains a BUY rating with a target price of HK$53.20, reflecting confidence in its diversified business strategy and potential for re-rating [12]