20240503-招银国际-Technology__Apple_FY2Q24_better-than-feared_on_China_and_iPhone__Expect_return_to_growth_in_next_quartere_4页_730kb

Apple FY2Q24 Performance and Outlook Summary

Apple Financial Results

Apple reported FY2Q24 revenue of US$90.8 billion (-4% YoY) and EPS of US$1.53 (+1% YoY), exceeding market expectations mainly due to better-than-feared iPhone and resilient Services segments, despite an 8% YoY decline in China. Segments showed mixed results: iPhone/iPad/Wearables declined 10%/17%/10% YoY, while Services grew 14% YoY. China region sales fell 8% YoY, below expectations, while the US and Europe markets grew marginally.

Management Guidance

Apple management provided upbeat guidance for FY3Q24, expecting low-single-digit revenue growth. Key highlights include double-digit growth for iPad and Services, accelerated iPhone sales in Greater China, and significant investments in generative AI with strengths in integrated hardware/software, in-house chips, and privacy/security. The company announced a US$110 billion stock buyback plan.

Sector Reaction and Beneficiaries

The tech sector is expected to react positively to Apple's guidance, with iPhone shipments resuming growth in CY25E due to Gen-AI features. Apple's performance benefits associated stocks include AAC Tech, BYDE, FIT Hon Teng, Luxshare, Goertek, Sunny Optical, and Cowell.

Valuation Highlights

• Luxshare (002475 CH): BUY rating, price target of HK$46.6, expected P/E of 15.1x and P/B of 12.2x.
• BYDE (285 HK): BUY rating, price target of HK$45.2, expected P/E of 10.2x and P/B of 7.5x.
• FIT Hon Teng (6088 HK): BUY rating, price target of HK$2.4, expected P/E of 10.1x and P/B of 7.9x.
• Other ratings include HOLD or NR, with varying upside/downside percentages and P/E/P/B metrics provided in the full report.

Key Disclosures

This report contains investment risks, including market fluctuations and uncertainties. The analyst certification confirms personal views and absence of conflicts. Readers should seek independent advice and understand that past performance is not indicative of future results. CMB International Global Markets assumes no liability for reliance on the information.