Sunlord(SZ:002138)2025-10-27 00:31Summary of Sunlord Electronics Research Report Company Overview - Company: Sunlord Electronics (002138 CH) - Industry: Electronic Equipment & Instruments - Current Share Price: CNY 36.10 - Target Price: CNY 47.30 (previously CNY 35.20) - Market Cap: CNY 29,108 million (approximately USD 4,087 million) - Recommendation: Maintain Buy rating Key Points Valuation and Financial Performance - Sunlord's current PE ratio is 21x for 2026 estimates, which is considered attractive despite a 24% share price rebound over the past three months, compared to a 26% increase in the passive component index [2][12] - The company is still undervalued compared to the A-share passive component sector's average PE of 27x and its historical average PE of 33x from 2019-2024 [2][12] - Estimated net profit CAGR of 25% from 2025 to 2027, compared to 26% for the sector's average and 16% for the company from 2019-2024 [2] Market Potential - Sunlord has unlocked a total addressable market (TAM) of approximately RMB 8 billion from improved AI-related product offerings, which includes: - RMB 3 billion from AI inductors - RMB 3 billion from tantalum capacitors - RMB 2 billion from traditional power inductors and transformers [3] - Strong order book for AI server-related products, with revenue in 1H25 expected to match the full-year level of 2024 [3] Revenue Growth Expectations - Expected revenue growth of 30% year-on-year in 3Q25, driven by new automotive electronic products [4] - Revenue from AI server-related products is projected to double in 2025, with a CAGR of 138% from 2025 to 2027 [3][35] Financial Estimates and Adjustments - Revenue forecasts for 2025 and 2026 remain unchanged, but net profit estimates have been slightly raised by 3% and 1% respectively due to a higher mix of power management products [5][22] - Target PE raised from 25.9x to 27.0x, reflecting the company's growth potential in AI server-related products [25][27] Risks and Challenges - Potential slower-than-expected progress in AI server-related product approvals could impact revenue forecasts [35] - Weaker demand for traditional products, particularly in consumer electronics and automotive sectors, poses a risk [35] - Intense competition may lead to pricing pressure, affecting margins [35] Conclusion - Sunlord Electronics is positioned for significant growth driven by its advancements in AI-related products and a strong market demand. The company remains undervalued compared to its peers, and the maintained Buy rating reflects confidence in its future performance and market share gains in the tantalum capacitor segment [2][27]