Asia-ex Japan PM

John Liu

Equity Bottom-Up

<ul>
<li>BYD Electronics benefits from two key growth drivers in 2025: a cyclical upswing in its legacy EMS business, and sustained strong growth in auto electronics and AI data cooling devices.</li>
<li>Earnings momentum is expected to pick up in 4Q, with key segments entering an earning upcycle. Expect bottomline growth to accelerate to 45% in 2025 from 9% in 2024.</li>
<li>The 13x 2025 PE multiple does not capture BYDE's transformation from a low-end, cyclical EMS to a leading high-precision manufacturer with a more diverse and balanced set of growth drivers.</li>
</ul>


BYD Electronics benefits from two key growth drivers in 2025: a cyclical upswing in its legacy EMS business, and sustained strong growth in auto electronics and AI data cooling devices.
Earnings momentum is expected to pick up in 4Q, with key segments entering an earning upcycle. Expect bottomline growth to accelerate to 45% in 2025 from 9% in 2024.
The 13x 2025 PE multiple does not capture BYDE's transformation from a low-end, cyclical EMS to a leading high-precision manufacturer with a more diverse and balanced set of growth drivers.


BYD Electronics (285 HK): Earnings Bottoming Out in 4Q24, EV and Data Center Driving Growth in 2025

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>We hosted BYDE at 4Q outlook NDR call. Mgmt. highlighted their positive outlook across all segments in 4Q24/2025: 1) Apple/Android: iPad share gains, Jabil’s enhanced automation and high-end Android demand</li><li>2) NEV: rising penetration and installation of high-end ADAS and suspension products to drive growth</li><li>3) AI server: positive on ODM products’ ramp-up and GB200 component product roadmap with Nvidia. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We hosted BYDE at 4Q outlook NDR call. Mgmt. highlighted their positive outlook across all segments in 4Q24/2025: 1) Apple/Android: iPad share gains, Jabil’s enhanced automation and high-end Android demand2) NEV: rising penetration and installation of high-end ADAS and suspension products to drive growth3) AI server: positive on ODM products’ ramp-up and GB200 component product roadmap with Nvidia. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BYDE (285 HK) - NDR Takeaways: Apple, NEV Products and AI Server Are Key Growth Drivers in 2025

<ul><li>BYDE‘s 3Q24 revenue/NP growth of 21%/1% YoY was largely in-line, while GPM improved 1.7ppts QoQ to 8.5%, slightly ahead of expectations, given higher UTR in iPhone casing, stable Android demand and NEV growth.</li><li>For 4Q24, we expect stronger revenue/NP growth driven by iPhone/iPad seasonality, Huawei/Xiaomi flagship model launches and AI server biz ramp-up.</li><li>Looking into 2025, we remain positive on iPhone AI cycle, stable Android flagship demand, high-end NEV products and AI server momentum. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BYDE‘s 3Q24 revenue/NP growth of 21%/1% YoY was largely in-line, while GPM improved 1.7ppts QoQ to 8.5%, slightly ahead of expectations, given higher UTR in iPhone casing, stable Android demand and NEV growth.For 4Q24, we expect stronger revenue/NP growth driven by iPhone/iPad seasonality, Huawei/Xiaomi flagship model launches and AI server biz ramp-up.Looking into 2025, we remain positive on iPhone AI cycle, stable Android flagship demand, high-end NEV products and AI server momentum. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BYDE (285 HK) - 3Q24 In-Line; Eyes on Jabil/NEV/AI Server Ramp-Up

<ul><li>We maintain the BUY rating of BYDE with new TP of HK$40.89 as we believe multiple growth drivers from Apple share gains, Jabil synergy, NEV product pipeline, robotics and AI server business expansion will offset earnings impact from higher expenses of Jabil integration in the near term.</li><li>We lowered FY24- 26E EPS by 7-14% to factor in 1H24 results, stronger smartphone recovery, and Jabil’s integration expenses.</li><li>We estimate net profit to grow 8%/43% YoY in FY24/25E. We think recent share price corrections have reflected Jabil-related expenses for interest costs, and intangible asset depreciation. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We maintain the BUY rating of BYDE with new TP of HK$40.89 as we believe multiple growth drivers from Apple share gains, Jabil synergy, NEV product pipeline, robotics and AI server business expansion will offset earnings impact from higher expenses of Jabil integration in the near term.We lowered FY24- 26E EPS by 7-14% to factor in 1H24 results, stronger smartphone recovery, and Jabil’s integration expenses.We estimate net profit to grow 8%/43% YoY in FY24/25E. We think recent share price corrections have reflected Jabil-related expenses for interest costs, and intangible asset depreciation. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BYDE (285 HK) - Positive on Multiple Growth Drivers

<ul><li>BYDE reported 1H24 revenue growth of 40% YoY, largely in-line with estimates, driven by Apple share gains, Android recovery, Jabil consolidation and strong NEV segment.</li><li>Net profit growth of 0.1% YoY is below our/consensus estimate by 21%/15% YoY, mainly dragged by weaker GPM (-1ppt YoY) and higher selling expenses (+211% YoY).</li><li>Mgmt. will host an analyst briefing at 9:30am HKT today (29 Aug), and we will look for details on 1) Apple’s business outlook (iPad/iPhone), 2) GPM and selling expenses guidance, 3) NEV product pipeline, and 4) AI server business updates.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BYDE reported 1H24 revenue growth of 40% YoY, largely in-line with estimates, driven by Apple share gains, Android recovery, Jabil consolidation and strong NEV segment.Net profit growth of 0.1% YoY is below our/consensus estimate by 21%/15% YoY, mainly dragged by weaker GPM (-1ppt YoY) and higher selling expenses (+211% YoY).Mgmt. will host an analyst briefing at 9:30am HKT today (29 Aug), and we will look for details on 1) Apple’s business outlook (iPad/iPhone), 2) GPM and selling expenses guidance, 3) NEV product pipeline, and 4) AI server business updates.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BYDE (285 HK) - 1H24 First Take: Strong Revenue Growth Dragged by GPM and Selling Expenses

China

BYD Electronic International Co., Ltd. researches, develops, manufactures handset components such as handset casings and handset keypads and modules for handset manufacturers.  The Company also provides assembly services comprising assembly service and PCB assembly service to global handset manufacturers.

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BYD Electronics (285 HK)