Summary of BYDE (0285.HK) Conference Call Company Overview - **Company**: BYDE (0285.HK) - **Industry**: Automotive Electronics, Consumer Electronics, AI Infrastructure Key Points 1. Automotive Electronics Outlook - Management is optimistic about the automotive electronics sector, driven by the increasing smart driving trend in China and the expansion of BYDE's product offerings, which enhances dollar content per vehicle - BYDE provides various products including infotainment systems, Advanced Driver Assistance Systems (ADAS), and thermal management solutions - The company aims to penetrate more high-end vehicle models, which is expected to support revenue growth - As shipments increase, management anticipates economies of scale will lead to higher gross margins (GM) [2] 2. Consumer Electronics Business - BYDE is focused on improving profitability in the consumer electronics segment by reducing manufacturing costs through automation, such as the use of industrial robots - Revenue growth is expected in the coming years, supported by changes in smartphone form factors, including slimmer and foldable models - Components for foldable phones typically have higher technical requirements, resulting in a higher average selling price (ASP) and increased dollar content for BYDE [3] 3. Expansion into AI Infrastructure - BYDE has developed R&D capabilities in AI server liquid cooling components, with mass delivery expected to commence in the second half of 2025 - The company plans to target non-China markets for its liquid cooling components, anticipating higher demand due to increased penetration rates - BYDE is also expanding its product line to include optical modules, with mass production of 800G modules expected to start in 2025 and 1.6T modules currently in the prototype stage - The demand for AI infrastructure in the Chinese market is expected to rise following the launch of DeepSeek in late 2024, which includes AI servers, general servers, optical modules, and switches [7] 4. Financial Projections - Market capitalization: HK$95.2 billion / $12.2 billion - Revenue projections for the next few years are as follows: - 2024: Rmb 177,305.5 million - 2025: Rmb 194,357.6 million - 2026: Rmb 227,392.1 million - 2027: Rmb 250,547.3 million - EBITDA projections: - 2024: Rmb 9,734.9 million - 2025: Rmb 11,786.0 million - 2026: Rmb 14,756.6 million - 2027: Rmb 18,105.6 million - EPS projections: - 2024: Rmb 1.89 - 2025: Rmb 2.59 - 2026: Rmb 3.72 - 2027: Rmb 4.95 - Price target: HK$54.98, representing a potential upside of 30.2% from the current price of HK$42.24 [8] Additional Insights - BYDE's accumulated experience in automotive and consumer electronics manufacturing positions it well for growth in the AI infrastructure sector - The company's strategic focus on high-end automotive models and advanced consumer electronics aligns with global trends towards smart technology and AI integration [1][2][3][7]

Investment Rating - Maintain Buy on Chenbro, Auras, and E Ink [2] Core Insights - Chenbro's May revenues declined by 7% MoM to NT$1.8 billion, primarily due to FX impact and a high base, but new rack products are expected to support growth in 3Q25 [4][10] - Auras experienced a 20% MoM revenue decline in May due to FX impact and diversification of production sites, but is expected to see growth from liquid cooling adoption and AI server expansion [23][26] - E Ink's April revenues exceeded expectations, with a 50% YoY increase, driven by rising demand for e-readers and e-labels, although FX impacts may affect future growth [42][43] Summary by Company Chenbro - May revenues were NT$1.8 billion, 12% below estimates, with expectations for June revenues to remain stable [4][10] - 3Q25 revenues are anticipated to be supported by new noise-cancellation rack products and increasing market share in ASIC AI servers [4][10] - Earnings revisions reflect a 3% reduction in net income estimates for 2025-27E due to lower revenues and higher operating expenses [11][14] Auras - May revenues fell to NT$1.62 billion, with expectations for June revenues to remain at similar levels [29][30] - The company is projected to see a 19% QoQ revenue growth in 2Q25, driven by liquid cooling components and AI server expansion [23][26] - Earnings revisions indicate a slight increase in revenue estimates for 2025-27E, with a target price raised to NT$825 based on a P/E multiple of 19.9x [41][30] E Ink - April revenues were NT$3.31 billion, 14% above estimates, with a 50% YoY growth attributed to increased demand for e-readers and e-labels [42][43] - Future revenues are expected to be stable, with a projected 15% QoQ growth in 2Q25 [47] - Earnings revisions show a reduction in net income estimates for 2025-27E by 19% due to lower revenue expectations and higher operating expenses [49][51]

Investment Rating - Maintain Buy on Chenbro, Auras, and E Ink [2] Core Insights - Chenbro's May revenues declined by 7% MoM to NT$1.8 billion, primarily due to FX impact and a high base, but new rack products are expected to support growth in 3Q25 [5][10] - Auras experienced a 20% MoM revenue decline in May due to FX impact and diversification of production sites, but is expected to benefit from rising liquid cooling adoption and expansion into ASIC AI servers [21][23] - E Ink's April revenues exceeded expectations, with a 50% YoY increase, driven by strong demand for e-readers and e-labels, although FX impact may affect future growth [38][39] Chenbro Summary - May revenues were NT$1.8 billion, 12% below estimates, with expectations for June revenues to remain stable [5][10] - 3Q25 revenues are anticipated to be supported by new noise-cancellation rack products and increased market share in ASIC AI servers [5][10] - Earnings revisions reflect a 3% reduction in net income estimates for 2025-27E due to lower revenues and higher operating expenses [11][12] Auras Summary - May revenues fell to NT$1.62 billion, with expectations for June revenues to remain at similar levels [21][26] - The company is projected to see a 19% QoQ revenue growth in 2Q25, driven by liquid cooling components and AI server expansion [21][23] - Earnings revisions indicate a slight increase in revenue estimates for 2025-27E, reflecting higher growth expectations in liquid cooling [27][28] E Ink Summary - April revenues were NT$3.31 billion, 14% above estimates, with a strong YoY growth of 50% [39][42] - The company expects revenues to stabilize in May and June, with 2Q25 revenues projected at NT$9.26 billion [42] - Earnings revisions show a reduction in net income estimates for 2025-27E due to macro uncertainties, but a positive outlook on e-paper adoption remains [44][45]

Investment Rating - The report maintains a "Buy" rating for Fositek with a 12-month price target of NT$836, representing an upside of 45.6% from the current price of NT$574 [10]. Core Insights - Fositek is expected to benefit from rising demand for ASIC AI servers, which is driving the penetration of liquid cooling components. The company's gross margin (GM) is projected to improve from 22% in 1Q25 to 27% by 2027 [1]. - The shift from air cooling to liquid cooling in ASIC AI servers is anticipated to enhance market opportunities, with next-generation rack-level AI servers potentially utilizing three times more quick disconnects (QDs) per tray compared to previous models [4]. - The foldable phone market is also on the rise, with significant shipments expected, including Huawei's foldable phones, which are projected to support Fositek's revenue growth in 2Q25 [7]. Summary by Sections ASIC AI Servers - The demand for ASIC AI servers is increasing, leading to a higher penetration rate of liquid cooling components. Fositek is expanding its product offerings to include rail kits and liquid cooling components, which are expected to positively impact its gross margin [1][4]. - The company's quick disconnect (QD) technology has gained traction among leading US cloud service providers, with mass production expected to start in 4Q25 [4]. Foldable Phones - The report highlights a growing trend in foldable phones, with significant shipments from major brands like Huawei and Lenovo. This trend is expected to contribute positively to Fositek's revenue in the upcoming quarters [5][7]. - The anticipated launch of more high-end foldable phones in 2H25 is expected to further support revenue growth for Fositek [7]. Financial Projections - Fositek's revenue is projected to grow from NT$8.19 billion in 2025 to NT$22.36 billion by 2027, with corresponding EBITDA and EPS growth [10]. - The report outlines a target P/E multiple of 19.2x based on peer comparisons, indicating a favorable valuation relative to its growth prospects [8].