Core Viewpoint - The company's performance in 1H25 shows a positive trend with revenue and net profit growth, indicating a strong operational capacity and potential for future profitability [3][4]. Financial Performance - In 1H25, the company's total operating revenue increased by 16.6% year-on-year to RMB 1.34 billion, accounting for approximately 41% of the original forecast for the entire year of 2025. The net profit attributable to shareholders rose by 13.3% year-on-year to RMB 98 million, representing about 39% of the original forecast for 2025 [3]. - For 2Q25, the operating revenue grew by 6.2% year-on-year and 2.4% quarter-on-quarter to RMB 680 million, while the net profit increased by 12.8% year-on-year and 2.6% quarter-on-quarter to RMB 49 million [3]. Cost Optimization and Profitability - The company's gross margin in 1H25 decreased by 1.8 percentage points to 21.8%, while the combined expense ratio for sales, management, and R&D fell by 0.8 percentage points to 13.2%. In 2Q25, the gross margin was 21.9%, showing a year-on-year decrease of 3.5 percentage points but a quarter-on-quarter increase of 0.3 percentage points [4]. - The Mexican factory has turned profitable, achieving a net profit of RMB 19.95 million in 1H25 compared to a loss of RMB 11.38 million in 1H24. This positions the company to leverage local production advantages amid international trade uncertainties [4]. Growth Strategies - The company is pursuing both external acquisitions and internal development to accelerate its second growth curve in robotics. A recent RMB 878 million targeted issuance is aimed at expanding production capacity for new energy vehicle components [5]. - The robotics business is expanding rapidly, with plans to establish a joint venture for the development and production of planetary roller screws and ball screws, targeting a production capacity of 100,000 units by the end of 2025 and 1 million units by 2026 [5][6]. - The company is also acquiring a 51% stake in Zhongshan Aoduo Electronics to enter the automotive electronics and robotics motor sectors, and has made substantial progress in collaborations with leading domestic robotics companies for metal shell components [6].

Core Viewpoint - Citi has lowered the target price for BYD Electronics to HKD 38.9, while also reducing profit forecasts for the current and next fiscal years due to a slowdown in high-margin metal casing demand [1] Group 1: Financial Performance - BYD Electronics' net profit for Q1 2025 is expected to grow only 2% year-on-year, primarily due to a high base effect from last year [1] - The company management anticipates a quarter-on-quarter increase in metal casing revenue in Q2, maintaining an optimistic outlook for the year driven by strong growth in the automotive sector and improved profitability from Jabil-related businesses [1] Group 2: Market Outlook - The impact of tariffs is expected to be limited due to overseas production capabilities [1] - Despite short-term weakness in metal casing demand, BYD Electronics' growth prospects for FY 2025 to FY 2027 remain solid, supported by robust automotive revenue growth and Jabil's financial performance [1] Group 3: Earnings Forecast Adjustments - Citi has revised its earnings forecasts for BYD Electronics downwards by 9% and 8% for FY 2025 and FY 2026, respectively [1]