20240729-招银国际-比亚迪电子-00285.HK-1H24E_preview__Expect_solid_growth_on_iPad_iPhone_cycle,_Android_recovery_and_NEV_orders_7页_1mb

BYDE (285 HK) Equity Research Summary

Report Overview:
This report covers BYDE (285 HK), a company involved in electronics and automotive components. Based on the stock analysis, BYDE is set to report 1H24E results with estimated revenue and net profit growth of 32% and 26%, respectively, driven by factors like iPad share gains, Android recovery, and business consolidations. The report maintains a "BUY" rating with a target price of HK$45.28.

Key Growth Drivers for 1H24E/2025E:

• Consumer Electronics: Solid growth expected from iPad share gains, iPhone upgrade cycle, Android high-end orders, and Jabil component business consolidation. iPad revenue projected at 53% YoY in 1H24E.
• Automotive: Significant revenue expansion driven by Parentco shipments and new high-end product ramp-ups, with potential orders influencing ASPs.
• New Intelligent Products: AI server business to offset weaknesses in household energy storage; rapid growth anticipated in FY25-26E due to developments with Nvidia, despite current flattish performance.

Financial Estimates and Valuation:

• EPS and P/E: Earnings per share (EPS) for FY24-26 are revised lower by 6% due to weaker gross profit margins. Current P/E stands at 12.7x for FY24E, considered attractive. Target price implies 18.3x FY24E P/E.
• Revenue Projections: Overall revenue growth of 32% for 1H24E and 12.1% for 2H24E, with estimates showing slight declines in profit margins due to increased operating expenses.
• Valuation Comparison: BYDE's valuation is competitive, with peers like Acer and TermSet showing average P/E multiples below 15x, highlighting BYDE as a good buying opportunity.

Risks and Catalysts:

• Risks: Weaker gross profit margins and higher operating costs could affect growth. External factors like market conditions may influence performance.
• Catalysts: iPhone/iPad shipments, NEV product launches, and AI server demand. Near-term events include quarterly earnings announcements.

Recommendation:
Maintain "BUY" rating based on diversified business segments and growth potential. Key near-term factors include shipments and product advancements. The stock is undervalued with upside potential following recent correction.