Group 1 - Bank of America Securities downgraded BYD Electronics (00285) rating from "Buy" to "Neutral" due to intense competition from Lens Technology (300433) in the iPhone casing and smartphone assembly business starting in the second half of this year, which may negatively impact already weak consumer electronics sales [1] - The firm expects a compound annual growth rate of 36% in BYD Electronics' automotive business revenue from 2024 to 2027, supported by rapid penetration of ADAS from the parent company BYD Company (01211), partially offsetting the negative impact [1] - The earnings forecast for BYD Electronics for 2025 to 2027 has been lowered by 1% to 11% to reflect risks in the smartphone business [1] Group 2 - Due to intensified competition leading to slower profit growth, a price-to-earnings ratio of 14 times (below historical average) is considered reasonable [1] - This month, the stock price increased by 21% due to higher market expectations for BYD Electronics' AI server liquid cooling business, with a projected P/E ratio of 13 times for 2026 deemed reasonable, aligning with the cyclical level over the past three years [1]

Core Viewpoint - Bank of America Securities downgraded BYD Electronic (00285) from "Buy" to "Neutral" due to intensified competition from Lens Technology (06613) in the iPhone casing and smartphone assembly business, which may negatively impact already weak consumer electronics sales [1] Group 1: Company Performance - The firm expects BYD Electronic's automotive business revenue to grow at a compound annual growth rate (CAGR) of 36% from 2024 to 2027, supported by the rapid penetration of ADAS from its parent company, BYD Company (01211), partially offsetting negative impacts from the smartphone sector [1] - The earnings forecast for BYD Electronic for 2025 to 2027 has been reduced by 1% to 11% to reflect risks in the smartphone business [1] Group 2: Market Valuation - Due to increased competition leading to slower profit growth, a price-to-earnings (P/E) ratio of 14 times is considered reasonable, which is below the historical average [1] - This month, the stock price rose by 21% due to higher market expectations for BYD Electronic's AI server liquid cooling business, with a projected P/E ratio of 13 times for 2026 deemed reasonable, aligning with the cyclical levels of the past three years [1]