Core Viewpoint - FAW Group is set to acquire a stake in Zhuoyue Technology, enhancing its position in the intelligent driving sector [1][2]. Group 1: Acquisition Details - FAW Group plans to acquire equity in Zhuoyue Technology, which specializes in Advanced Driver Assistance Systems (ADAS) [3]. - Prior to the transaction, New Territory held 70.65% of Zhuoyue Technology, and post-transaction, FAW Group will hold 35.8% while New Territory will hold 34.85%, leading to joint control [3]. - The acquisition is part of FAW Group's strategy to strengthen its capabilities in the intelligent driving market [1]. Group 2: Company Background - FAW Group was established on June 28, 2011, in Changchun, Jilin Province, focusing on the development, production, and sales of passenger and commercial vehicles [3]. - Zhuoyue Technology was spun off from DJI's automotive division in 2023 and aims to serve automotive clients as a supplier and service provider [3][4]. Group 3: Market Position and Collaborations - Zhuoyue Technology has announced partnerships with nine major automotive manufacturers, including FAW, Volkswagen, and BYD, covering over 20 vehicle models [5]. - The company has developed the IQ.Pilot enhanced driving assistance system in collaboration with Volkswagen, marking a significant achievement in the fuel vehicle market [5]. - FAW and Zhuoyue have previously engaged in deep cooperation, signing a strategic collaboration agreement focused on intelligent driving technologies [5]. Group 4: Financing and Investments - Zhuoyue Technology completed a Series B financing round in June 2023, with investments from BAIC Capital and GAC Capital, following earlier investments from BYD [5][6]. - BYD has also deepened its collaboration with DJI in the intelligent sector through the launch of the "Lingyuan" intelligent vehicle-mounted drone system [6].

Investment Rating - The report maintains a "Buy" rating for BYD Electronics [1] Core Views - The company is experiencing short-term fluctuations in performance but is well-positioned for future growth due to multiple strategic initiatives [1][3] - The company has strengthened its strategic partnerships with leading clients in various sectors, including drones, smart furniture, and gaming hardware, which are expected to contribute to stable growth [3] - The acquisition of Jabil is anticipated to enhance operational efficiency and scale in the components business, with further improvements in profit margins and product offerings expected [8] Financial Summary - Total revenue is projected to grow from 130.4 billion RMB in 2023 to 237.4 billion RMB by 2027, reflecting a compound annual growth rate (CAGR) of approximately 19.5% [1][10] - Net profit attributable to shareholders is expected to increase from 4.0 billion RMB in 2023 to 7.3 billion RMB in 2027, with a notable growth rate of 117.56% in 2023 [1][10] - The earnings per share (EPS) is forecasted to rise from 1.79 RMB in 2023 to 3.24 RMB in 2027, indicating a strong upward trend [1][10] - The price-to-earnings (P/E) ratio is projected to decrease from 17.57 in 2023 to 9.73 in 2027, suggesting an attractive valuation over the forecast period [1][10] Business Segments - The automotive electronics segment is expected to benefit from the parent company's push towards automotive intelligence, with increasing shipments of smart cockpit and thermal management products [8] - The consumer electronics and new intelligent products segments also show considerable growth potential, driven by strategic collaborations and product diversification [9]