20231024-招银国际-立讯精密-002475.SZ-Resilient_3Q23_despite_macro_headwinds_Positive_outlook_for_auto_and_comm._business_7页_1mb

Luxshare (002475 CH) Report Summary

Overview

Luxshare reported resilient Q3 2023 performance with revenue and net profit growth of -8.5% YoY and +15.4% YoY, respectively, and pre-announced FY23 earnings growth of 17.5-22.5% YoY, implying 31% growth in Q4 2023E. The firm maintains a BUY recommendation with a new target price of RMB46.96.

Key Financial Highlights

• Q3 2023: Revenue declined year-on-year due to inventory corrections, product portfolio shifts, and weaker sell-side demand. Net profit beat expectations despite revenue weakness. Gross margin improved to 13.8% YoY.
• FY23E Forecast: Revenue growth expected at 9.2%, net profit up 19.9%. Key drivers include share gains in Apple's components and accelerated growth in auto and communications segments.
• Valuation: Stock trades at 20.4x FY23E P/E and 16.2x FY24E P/E, slightly below 5-year average. Target price set at RMB46.96 based on 24x FY24E P/E.

Outlook and Catalysts

The company is well-positioned for iPhone/MacBook/iPad/Watch components and auto tier-1 businesses, with catalysts including share gains in Apple products and expansion in communications. Risk factors include weaker iPhone demand and slower inventory recovery.

Risks

Potential risks include underperformance in consumer electronics, yield improvement delays, and slower integration of acquired businesses.

Recommendation

Maintain BUY due to attractive risk-reward profile and potential for revenue upside in FY24-25E, supported by operational efficiencies and market share gains.

## Note
The full report includes financial statements, historical performance, peer comparisons, and disclosures but the summary focuses on key insights.