20231106-招银国际-China_Technology_Sector_Apple_FY4Q23_beat_on_margins,_resilient_China_iPhone_sales,_weak_outlook_for_iPad_Wearablese_4页_877kb

Apple FY4Q23 Performance and Outlook Summary

Key Financial Results

• Revenue: US$89.5 billion (-0.7% YoY), in-line with consensus and 5% above forecast.
• Earnings Per Share (EPS): US$1.46 (+13% YoY), primarily driven by favorable product mix and better leverage, partially offset by negative foreign exchange effects.
• Gross Profit Margin (GPM): 45.2%, exceeding consensus expectations of 42.3%.

Product Segment Performance

• iPhone Sales: Resilient with 3% YoY growth in China; overall +3% YoY.
• Mac: Declined 34% YoY amid macro challenges.
• iPad: Slumped 10% YoY due to tough comparisons.
• Wearables, Home and Accessories: Decreased 3% YoY.
• Services: Strong growth of 16% YoY, setting records in transacting and paid accounts.

Outlook

• FY1Q24 Revenue Expected: Flattish YoY due to a shorter quarter and iPhone 15 supply constraints; Mac and iPhone are projected to grow, but iPad/Wearables face significant decline.
• Positive Factors: Better-than-feared China iPhone sales could support gradual share gains and mix shifts to premium models.
• Cautions: Near-term weakness anticipated for iPad/Watch/AirPods amid timing lags; macro challenges and Huawei's competitive rise in China noted.

Stock Recommendations

• BUY: Luxshare (high-end iPhone market share), BYDE (Jabil's synergies and Android upside), FIT Hon Teng (AirPods order wins).
• HOLD: Sunny Optical and AAC Tech, mainly due to fair valuation, with careful consideration for iPad/Watch components.

Other Highlights

• China iPhone sales reached a record high in the September quarter.
• Services business accelerated, with GPM guidance at 45-46% for FY1Q24E.
• Potential for Apple's Vision Pro demos and expanded physical stores.

Risks and Considerations

• Selective approach amid macro headwinds; prefer high-end iPhone components.
• Conservative stance on iPad/Watch/AirPods stocks due to weak outlook.
• Overall, OUTPERFORM rating maintained for the technology sector, driven by iPhone resilience.