20250801-招银国际-Apple_FY3Q25_read-through_Strong_iPhone,_China_rebound_and_service_momentum_4Q_guidance_better_than_feared_4页_834kb

Report Overview: This CMB International Global Markets equity research update covers the Technology sector, focusing on Apple's FY3Q25 results and outlook, with broader analysis on supply chain dynamics, tariff implications, and recommendations for other technology companies.

Apple FY3Q25 Performance: Apple reported better-than-feared results with revenue and EPS growing 10% and 12% YoY respectively, driven by strong iPhone sales (+13% YoY, partly due to tariff pull-forward), a China rebound (+4% YoY), and accelerated services growth (+13% YoY). The iPhone 16 series showed double-digit growth with higher ASPs on demand for Pro/Pro Max models. Guidance for FY4Q25 indicated resilient revenue growth (mid-to-high single-digit) and GPM of 46-47%, despite $1.1bn tariff impact, which alleviates some market concerns amid macro and trade uncertainties.

Sector Outlook: The technology sector outlook for the second half of 2025 is positive, attributed to comments from Samsung, Qualcomm, and MediaTek. Apple's ongoing investments in AI (e.g., Siri upgrades, AI devices) and supply chain benefits from deals (e.g., US-Vietnam tariff deal) are highlighted.

Stock Recommendations: Recommended stocks include Xiaomi, AAC Technology, BYD (correcting typo in content to BYD for battery or similar context), FIT Hon Teng, Q-Tech, and Tongda. These names are preferred for structural growth drivers, valuation upside, and diversified production bases, with companies like Xiaomi and AAC Tech showing potential for earnings turnaround and industry upgrades.

Key Insights: Tariff-related uncertainties impact supply chains, with iPhone assembly shifting to Vietnam and India to mitigate US tariffs. Valuation metrics reveal favorable upside for buy-rated stocks, while M&A activities and AI investments are key growth catalysts for selected firms.