BYDE (285 HK) Summary
Core Content
BYDE (285 HK) reported FY22 results that were largely in-line with consensus but exceeded internal estimates due to strong performance in the iPad segment. The company is expected to see gradual recovery in the coming years, driven by growth in Apple OEM/components, residential energy storage, and the auto business. Despite a weak outlook for the Android business, management remains optimistic about the growth drivers and maintains a HOLD rating with a revised target price of HK$20.30.
Main Points
FY22 Performance
- Revenue: $107,186 million, 11% above CMBIGM estimate, 5% above consensus.
- Net Profit: $1,858 million, -19.6% YoY, largely in-line with expectations.
- Gross Margin (GPM): 5.92%, down 0.85ppts YoY due to lower UTR.
- Key Drivers: Share gain in Apple OEM/components, new intelligent products, and NEV growth.
FY23-24 Outlook
- Revenue Growth: Management expects revenue to grow by 10%+ YoY in FY23, with slower GPM recovery due to prolonged weakness in Android demand.
- GPM Trends: GPM is expected to gradually recover, but at a slower pace than anticipated.
- EPS Adjustments: FY23-24 EPS adjusted by +3% and -12%, respectively, to reflect the sales and margin dynamics.
- Growth Drivers:
- Apple OEM/Components: Expected to reach 80% of FY23E revenue, up from 60% in FY22.
- Residential Energy Storage: Expected to double revenue in Europe, exceeding RMB10bn in FY23E.
- Auto Business: Expected to maintain high growth and GPM above 10% through services, OEM leadership, and cost control.
Valuation
- Target Price: HK$20.30, implying 13.1x FY23E P/E.
- Current P/E: 15.3x / 12.4x for FY23E / FY24E, which is considered fair due to slower margin recovery.
- SOTP-Based Valuation:
- Assembly EMS: 10x P/E
- Components/E-cigarette: 10x P/E
- Others (smart, auto): 15x P/E
- Masks: 8x P/E (reflecting near-term growth potential amid the pandemic)
Key Financial Highlights
| Metric |
FY21A |
FY22A |
FY23E |
FY24E |
FY25E |
| Revenue (RMB mn) |
89,057 |
107,186 |
119,912 |
137,663 |
149,070 |
| YoY Growth (%) |
21.8 |
20.4 |
11.9 |
14.8 |
8.3 |
| Net Profit (RMB mn) |
2,309.9 |
1,857.6 |
2,901.0 |
3,595.0 |
4,402.5 |
| YoY Growth (%) |
-57.5 |
-19.6 |
56.2 |
23.9 |
22.5 |
| EPS (RMB) |
1.03 |
0.82 |
1.29 |
1.60 |
1.95 |
| P/E (x) |
32.2 |
22.1 |
15.3 |
12.4 |
10.1 |
| P/B (x) |
3.1 |
1.6 |
1.6 |
1.4 |
1.3 |
| Yield (%) |
0.3 |
0.9 |
0.7 |
0.8 |
1.0 |
| ROE (%) |
10.0 |
7.5 |
10.7 |
12.0 |
13.1 |
Key Risks
- Slow GPM Recovery: Expected due to continued weakness in the Android business.
- Market Competition: Auto OEM price war could affect margins.
- Valuation Concerns: Despite positive growth outlook, the current P/E multiple may not justify higher expectations.
Share Performance
| Period |
Absolute |
Relative |
| 1-mth |
-1.5% |
-3.5% |
| 3-mth |
-9.1% |
-11.1% |
| 6-mth |
16.9% |
-0.6% |
Market Cap and Financials
| Metric |
Value (HK$ mn) |
| Market Cap |
50,697.1 |
| Avg 3 mths t/o |
24.8 |
| 52w High/Low |
28.25/13.60 |
| Total Issued Shares (mn) |
2,253.2 |
Shareholding Structure
| Holder |
% Ownership |
| Golden Link Worldwide Ltd |
65.8% |
| Gold Dragonfly Ltd |
5.0% |
Financial Summary
Income Statement Highlights
- Operating Profit: Expected to grow significantly in FY23, reflecting strong performance in key segments.
- Net Profit: Projected to increase by 56.2% in FY23E and 23.9% in FY24E.
Balance Sheet Highlights
- Total Assets: Projected to increase over the forecast period.
- Current Ratio: Expected to remain stable, indicating good short-term liquidity.
- Inventory Turnover Days: Stable at 36.5 days, suggesting efficient inventory management.
Cash Flow
- Net Cash from Operations: Expected to fluctuate, with a decline in FY23E due to increased investments.
- Capital Expenditure: Continues to rise, reflecting ongoing investment in growth areas.
Valuation Comparison
| Company |
Market Cap (US$ mn) |
P/E (x) |
P/B (x) |
ROE (%) |
| BYDE |
6,458 |
15.6 |
1.6 |
10.2 |
| Tongda |
139 |
2.8 |
2.8 |
3.0 |
| AAC Tech |
2,922 |
17.5 |
13.7 |
5.1 |
| TK Group |
166 |
3.0 |
3.6 |
20.7 |
| Ju Teng |
200 |
NA |
NA |
NA |
| Everwin |
2,381 |
23.3 |
14.6 |
7.3 |
| Lens Tech |
9,657 |
18.8 |
14.9 |
7.7 |
| Foxconn |
2,578 |
12.6 |
11.9 |
5.3 |
| Catcher |
4,434 |
21.0 |
17.3 |
4.0 |
Analyst Certification
- The research analyst certifies that all views expressed in the report reflect their personal views and that their compensation is not tied to the report's content.
- The analyst confirms no trading activity in the covered stocks within 30 days prior to the report's issue and no plans to trade within 3 days after.
CMBIG Ratings
- HOLD: Stock with potential return of +15% to -10% over next 12 months.
- BUY: Stock with potential return of over 15% over next 12 months.
- SELL: Stock with potential loss of over 10% over next 12 months.
- NOT RATED: Stock not rated by CMBIGM.
Industry Outlook
- OUTPERFORM: Industry expected to outperform the relevant broad market benchmark.
- MARKET-PERFORM: Industry expected to perform in-line with the relevant broad market benchmark.
- UNDERPERFORM: Industry expected to underperform the relevant broad market benchmark.
Important Disclosures
- The report is for general information and not tailored to individual investors.
- Past performance does not guarantee future results.
- Actual events may differ materially from the report's content.
- Investments are subject to market risks and returns are uncertain.
