LUXSHARE-ICT(SZ:002475)2025-11-07 01:28Summary of Luxshare (A) Conference Call Company Overview - Company: Luxshare - Sector: Technology - Key Customers: Apple, Google, Microsoft, HP, Dell, Lenovo - Sales Breakdown: 80% consumer segment, 9% communication, 6% automotive, 3% computing [12][13] Key Industry Insights - iPhone Demand: Luxshare is a key assembler for iPhone 17/Pro Max models, with expected shipments of 239 million, 250 million, and 258 million units in 2025, 2026, and 2027 respectively, surpassing the previous high of 238 million units in 2021 [2][32][33] - AI Server Growth: Luxshare is a significant supplier for AI-related projects, benefiting from the build-up of AI datacenters in China and partnerships with global tech giants like Google, Cisco, and Microsoft [3][12] Financial Performance - Earnings Growth: Luxshare's earnings are projected to grow at a CAGR of over 25% from 2024 to 2027, driven by the iPhone upcycle and increasing contributions from automotive and communication sectors [13][18] - Recent Earnings: In Q3 2025, Luxshare reported earnings of CNY 4.8 billion, a 35% QoQ and 32% YoY increase, exceeding guidance [29][30] - Q4 Guidance: Expected earnings for Q4 2025 are projected to be between CNY 5.0 billion and CNY 5.7 billion, indicating a 9% QoQ and 24% YoY growth [31] Valuation and Price Target - Price Objective: Raised from CNY 50 to CNY 78, reflecting a P/E ratio of 24x for 2H26-1H27E, aligning with historical averages [1][14] - Current Share Price: CNY 63.00, with a market cap of CNY 457.24 billion [7] - P/E Comparison: Luxshare trades at 20x 2026-27E average P/E, below the Apple supply chain's 24x and AI server peers' 24-26x [25][29] Key Financial Metrics - Net Income Projections: - 2025E: CNY 16.88 billion - 2026E: CNY 21.29 billion - 2027E: CNY 27.55 billion [4][20] - EPS Growth: Expected to increase from CNY 2.33 in 2025 to CNY 3.80 in 2027, with a YoY growth rate of 25.9% in 2025 and 29.4% in 2027 [4][20] - Free Cash Flow: Projected to rise from CNY 4.33 billion in 2025 to CNY 30.19 billion in 2027 [4] Strategic Outlook - AI and Technology Integration: Luxshare's collaboration with OpenAI and other tech giants positions it well for future growth in the AI sector, with potential projects expected to materialize by 2027 [3] - Market Positioning: The company is expected to benefit from a stronger execution strategy compared to peers, enhancing its ability to capitalize on opportunities in the AI era [15] Conclusion - Investment Recommendation: The company maintains a "Buy" rating, supported by strong earnings growth, strategic positioning in the iPhone supply chain, and expanding opportunities in AI and technology sectors [1][13]