Investment Rating - The investment rating for the company is "Outperform the Market" [6] Core Views - The company is experiencing robust growth in its automotive and communication businesses, with a completed acquisition of assets from Wentai Technology, enhancing its ODM capabilities [2][4] - The company has also completed the acquisition of Leoni's related assets, further expanding its automotive product lines and client base [3] - The company forecasts steady growth for Q3 2025, with expected net profit ranging from 4.246 to 4.699 billion, representing a year-on-year increase of 15.41% to 27.74% [1] Financial Performance Summary - In the first half of 2025, the company achieved revenue of 124.503 billion (YoY +20.18%) and a net profit of 6.644 billion (YoY +23.13%), with a gross margin of 11.61% [1] - The second quarter of 2025 saw revenue of 62.715 billion (YoY +22.51%, QoQ +1.50%) and a net profit of 3.601 billion (YoY +23.09%, QoQ +18.30%) [1] - The company's revenue from consumer electronics in 1H25 was 97.8 billion (YoY +14.3%), while its communication products revenue surged to 11.1 billion (YoY +48.7%) and automotive products revenue reached 8.66 billion (YoY +82.1%) [4] Earnings Forecast and Financial Metrics - The company is projected to achieve net profits of 16 billion, 19.4 billion, and 23.5 billion for the years 2025, 2026, and 2027 respectively, with growth rates of 20%, 22%, and 21% [5] - The current stock price corresponds to a PE ratio of 21, 17, and 14 for the years 2025, 2026, and 2027 respectively [5] - The company maintains a strong return on equity (ROE) of approximately 19.5% for 2023, with a slight increase projected in subsequent years [5]

Group 1: Financial Performance - In the first half of 2025, the company achieved operating revenue of 124.503 billion yuan, a year-on-year increase of 20.18%, and net profit of 6.644 billion yuan, a significant year-on-year growth of 23.13% [1] - For the first three quarters of 2025, the company expects net profit attributable to shareholders to reach between 10.89 billion yuan and 11.344 billion yuan, representing a year-on-year growth of 20% to 25% [3] - The estimated net profit for the third quarter is projected to be between 4.246 billion yuan and 4.699 billion yuan, reflecting a year-on-year increase of 15.41% to 27.74% [3] Group 2: Business Segments - In the consumer electronics sector, the company is expanding its growth space through a dual strategy of "vertical integration + scenario innovation" and has established a comprehensive product system across nine major categories [1] - The telecommunications business has shown global competitiveness, with 224G high-speed cable products in mass production and 800G silicon optical modules also achieving mass production [2] - The automotive business continues to grow strongly, with high-voltage and high-speed harnesses making significant progress, and new projects expected to enter mass production in 2025 [2] Group 3: Strategic Outlook - The company is leveraging its global manufacturing bases in countries like Vietnam, Malaysia, and Mexico to enhance flexibility in meeting customer market demands [3] - The company aims to improve cost control across the entire industry chain through smart manufacturing upgrades and foundational capability innovations [3] - The heat management business is expected to double its revenue and profit in 2025, indicating strong growth potential in this segment [2]

Financial Performance - In 2024, the company achieved revenue of CNY 268.795 billion, a year-on-year increase of 15.91% [3] - Net profit attributable to shareholders was CNY 13.366 billion, up 22.03% from the previous year [3] - The gross profit margin for 2024 was 10.41%, down 1.17 percentage points from 11.58% in 2023 [3] - In Q1 2025, revenue reached CNY 61.788 billion, a 17.90% increase year-on-year [6] - Q1 2025 net profit was CNY 3.377 billion, a 31.25% increase compared to the same period last year [6] Operational Efficiency - Operating expense ratio for 2024 was 5.94%, down from 6.30% in 2023, indicating improved operational efficiency [3] - The company’s cash flow from operating activities in 2024 was CNY 27.117 billion, slightly down from the previous year [4] - Inventory turnover days decreased to 45.94 days in 2024, down 12.98 days year-on-year, reflecting better inventory management [5] Business Segments Consumer Electronics - The consumer electronics segment saw significant growth, with a focus on "scene ecology, AI empowerment, and global collaboration" [7] - The wearable device market is projected to reach 190 million units in 2024, with a focus on health monitoring features [8] - The company plans to reduce the carbon footprint of health monitoring products by 30% by 2025 [9] Communication - The communication segment's revenue for 2024 was CNY 18.359 billion, a 26.29% increase year-on-year [14] - The company is positioned to benefit from the growing demand for AI infrastructure, with expected GPU server penetration increasing from 7% in 2023 to 30% by 2028 [15] Automotive - Automotive sales reached CNY 13.7 billion in 2024, nearly a 50% increase from 2023 [20] - The automotive wiring harness segment accounted for 60% of automotive business revenue, with significant growth in high-voltage and high-speed harnesses [20] - The company is the only domestic firm capable of fully developing automotive connectors, with high-voltage connectors now in stable supply to major manufacturers [21] Strategic Outlook - The company aims to enhance its technology capabilities and expand its market presence in the automotive sector, particularly in smart driving and intelligent cockpit products [22] - Future capital expenditures are expected to focus on upgrading facilities in Vietnam and Indonesia, with a projected capacity contribution of nearly 30% from the Vietnam plant by 2025 [26] - The company plans to maintain a growth target of 20%-25% despite fluctuating tariff policies, indicating resilience in its operational strategy [30]