Summary of Lingyi (002600.SZ) Conference Call Company Overview - **Company**: Lingyi (002600.SZ) - **Industry**: Consumer Electronics, AI Solutions Key Points Business Outlook - Management is optimistic about long-term revenue growth and profitability improvements, identifying opportunities in: - Foldable phones - Robots - AI/AR glasses - AI servers - Lingyi plans to establish partnerships with robot suppliers and launch more industrial robot models to meet rising demand in the industrial sector [2][2] - The contribution of new business is expected to increase from 15% in 2024 to 28% in 2027E [2][2] Smartphone Business Outlook - Anticipated benefits from upcoming smartphone form factor changes, particularly foldable phones, which are expected to have a higher average selling price (ASP) due to increased technical requirements [3][3] - Expected penetration rates for foldable phones are projected to reach: - 2.5% in 2025 - 3.4% in 2026 - 4.1% in 2027 - Shipment growth for foldable phones is forecasted at: - 65% YoY in 2025 - 39% YoY in 2026 - 21% YoY in 2027 - This growth outpaces overall smartphone shipment growth, which is expected to be 0% in 2025, 1% in 2026, and 1% in 2027 [3][6] Expansion into AI Server Thermal Solutions - Lingyi is expanding into AI server thermal solutions, collaborating with leading AI chipset companies on liquid cooling components [7][7] - The goal is to transition from providing liquid cooling components to offering total solutions [7][7] - Expected penetration rates for AI training servers are projected to reach: - 45% in 2025 - 74% in 2026 - This growth is driven by: - Rack-level AI servers, which are entirely liquid cooled - Increasing liquid cooling penetration in baseboard-based AI training servers - Potential upside from ASIC AI servers [7][7] Financial Projections - 12-month target price set at Rmb20.1, based on a target P/E multiple of 34.8x 2026E EPS [8][8] - Key financial metrics forecasted for 2024-2027 include: - Revenue growth from Rmb44.2 billion in 2024 to Rmb83.5 billion in 2027 - EBITDA growth from Rmb4.8 billion in 2024 to Rmb10.1 billion in 2027 - EPS growth from Rmb0.25 in 2024 to Rmb0.81 in 2027 [9][9] Risks - Potential risks include: - Slower-than-expected penetration of foldable phones and AI terminals - Increased competition from additional suppliers - Weak macroeconomic conditions affecting market demand [8][8] Conclusion - Lingyi is positioned for growth in the consumer electronics sector, particularly through innovations in foldable phones and AI server thermal solutions. The company is optimistic about its revenue and profitability trajectory, supported by strategic partnerships and market trends.

Summary of Lingyi (002600.SZ) Conference Call Company Overview - **Company**: Lingyi (002600.SZ) - **Market Cap**: Rmb108.9 billion / $15.3 billion - **Enterprise Value**: Rmb112.7 billion / $15.8 billion - **Current Price**: Rmb15.54 - **12-Month Price Target**: Rmb20.10, indicating an upside of 29.3% [1][27][38] Key Industry and Business Developments - **Expansion into AI and Foldable Phones**: Lingyi is diversifying its business from traditional smartphones to AI servers, AI devices, and foldable phone components, capitalizing on the growing adoption of these technologies. The company anticipates that AI devices and foldable phones will significantly increase dollar content, particularly in thermal components and mechanical parts [2][27]. - **New Business Contribution**: Expected contribution from new business segments (AI glasses, AI servers, foldable phone components, automotive) is projected to rise from 15% in 2024 to 28% by 2027 [2]. Financial Performance - **2Q25 Results**: - Revenue increased by 30% YoY, aligning with estimates, driven by higher dollar content in thermal solutions and smartphone precision components [3][20]. - Operating income exceeded estimates by 8%, supported by improved efficiency in automotive components and overseas factories [3][20]. - Net income rose by 58% YoY, surpassing the company's midpoint guidance [3][20]. Financial Projections - **Revenue Forecasts**: - 2024: Rmb44.21 billion - 2025E: Rmb55.73 billion - 2026E: Rmb69.05 billion - 2027E: Rmb83.48 billion [7][18][22]. - **Earnings Per Share (EPS)**: - 2025E: Rmb0.37 - 2026E: Rmb0.58 - 2027E: Rmb0.81 [7][18][22]. - **Gross Margin (GM)**: Expected to improve due to a shift in product mix towards higher-margin AI server thermal and foldable phone components [21][27]. Valuation and Investment Outlook - **Target Price Adjustment**: Price target raised to Rmb20.1 based on a target P/E multiple of 34.8x 2026E EPS, reflecting a positive outlook on the company's growth trajectory [1][27][38]. - **Investment Rating**: Maintain "Buy" rating, supported by Lingyi's leading position in precision components and its expansion into high-growth areas [1][27][38]. Risks and Considerations - **Market Risks**: Potential risks include slower-than-expected penetration of foldable phones and AI terminals, increased competition from suppliers, and a weak macroeconomic environment that could dampen market demand [38]. Conclusion Lingyi is positioned for growth through its strategic expansion into AI and foldable phone components, supported by strong financial performance and positive market trends. The company's proactive approach to diversifying its product offerings and improving operational efficiency bodes well for its future prospects.