LUXSHARE-ICT(SZ:002475)2025-08-31 16:21Summary of Luxshare - A Earnings Call Company Overview - Company: Luxshare Precision Industry Co., Ltd. - Ticker: 002475.SZ - Industry: Technology - Current Price: Rmb46.10 (as of August 28, 2025) - Price Target: Rmb63.00 (by June 2026) Key Points from the Earnings Call Industry and Business Segments - Strong Revenue Growth: Luxshare reported significant revenue growth in the auto and communication segments during the first half of 2025, driven by positive portfolio expansion [1][6] - Sustainable Growth Outlook: The company maintains a resilient growth outlook despite macroeconomic challenges, supported by its diversified business model and global manufacturing capabilities [1][6] - Consolidation Success: Better-than-expected consolidation of newly acquired businesses, including Leoni and ODM, was highlighted, with expectations for improved revenue mix and profitability [1][6] Financial Performance - 1H25 Performance: Dongguan Luxshare Technology, a subsidiary, achieved revenue of Rmb6.5 billion and a net profit of Rmb825 million, indicating a net profit margin of 13%, significantly higher than the average margin of 6% for Luxshare [6] - Earnings Projections: The company projects a 26% compound annual growth rate (CAGR) in earnings from 2024 to 2027, reflecting strong growth in the auto and communication sectors [1][11] Financial Estimates - Adjusted EPS Forecasts: - FY2024: Rmb1.85 - FY2025: Rmb2.30 - FY2026: Rmb2.92 - FY2027: Rmb3.66 [2][10] Valuation and Price Target - Valuation Methodology: The price target of Rmb63 is based on a 19x one-year forward P/E ratio, which is approximately 10% below the average of its peers [12][21] - Current Valuation: Luxshare is currently valued at 15x 2026E P/E, indicating potential for re-rating [1][12] Risks and Challenges - Downside Risks: Potential risks include margin fluctuations due to new projects, weakening smartphone shipments, and exchange rate fluctuations impacting earnings [22][20] Additional Insights - Market Position: Luxshare is expected to continue benefiting from the iPhone assembly business, with ongoing market share gains and margin improvements [11][20] - Investment Thesis: The company is viewed favorably for its sustainable growth potential and diversified business model, which spans components to modules [11][20] Conclusion Luxshare demonstrates strong growth potential in the auto and communication sectors, backed by successful consolidation efforts and a robust financial outlook. The company is positioned to capitalize on market trends, although it faces certain risks that could impact its performance. The reiterated price target reflects confidence in its future growth trajectory.