20240125-招银国际-中国特种纤维-00285.HK-Market_concerns_overdone__Strong_NEV_and_Jabil_mobile_synergies_ahead_9页_1mb

Summary

Overview

The report on BYDE (285 HK) concludes with a "BUY" recommendation, highlighting positive factors from recent management discussions. Key concerns initially included smartphone demand recovery, NEV pricing pressure, and Jabil's business uncertainties, but management views are optimistic. Huawei's return is expected to drive Android recovery, while titanium upgrades could boost ASPs. NEV business is projected for high growth in 2024 due to new product ramp-ups, parent company orders, and domestic/overseas wins.

Financial Highlights

• Revenue Growth: Strong CAGR expected, with FY24E revenue at HK$182,796 million (39.7% YoY growth), driven by NEV and component segments.
• EPS Projections: Revisions increased FY24E-25E EPS by 8-15%, from consensus; FY24E target P/E is 17.5x.
• Current vs. Target: Stock trades at HK$30.10 (11.6x P/E), with a new target price of HK$45.86 implying significant upside potential.
• Margins: GPM expected to improve to 9.8% in FY25E, OPM to 4.1%.

Valuation and Recommendation

CMB International Global Markets maintains a "BUY" rating based on SOTP valuation. The target price of HK$45.86 (52.4% upside) reflects BYDE's business diversification. Comparison with peers shows BYDE as attractive due to expected Android margin recovery and growth.

Catalysts and Risks

• Catalysts: New iPad launches and strong BYD NEV sales could drive upside.
• Risks: Market concerns on smartphone demand, NEV pricing pressures, and dependency on Huawei's performance. Actual results may vary due to uncertainties in component prices and Jabil's business integration.