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.