Apple's share of the supply chain is gradually increasing, and yield advantage is deeply involved
The company uses “process+underlying technology” as its foundation of competency. Relying on vertical integration and efficient collaboration capabilities of components, modules and system solutions, the company gradually increased its share in the supply chain of Apple, the core customer, and occupied an OEM share in products leading new trends in consumer electronics development, such as iPhones, Airpods, and Apple Watch. With the strong launch of next-generation phenomenal products such as Apple's Vision Pro, the company's assembly and OEM business accounts for 9% of the total machine cost. The company is expected to take advantage of the downstream consumer electronics recovery and benefit deeply in the supply chain.
Demand for AI servers has surged, and the advantages of copper interconnection have been demonstrated
With the rapid development of generative AI technology such as large models, demand for computing power has exploded, which has had an obvious driving effect on the development of the AI server market. In the AI server business field, copper connections have always been the core product of the company's communication business. The self-developed Optamax bulk cable technology can achieve channel speeds of up to 112 Gbps and aggregate data throughput of more than 800 Gbps. The application length is up to 5 meters, providing the most cost-effective solution to replace optical modules in short-distance transmission to meet the expansion needs of copper cable applications within and between data center cabinets.
The major trend of automotive intelligence+electrification, and diversified business layouts continue to benefit the company's long-term accumulation of precision manufacturing advantages, complemented by rapid iteration capabilities and cost control awareness accumulated in the consumer electronics field. It has now deployed products such as high/low voltage wiring harnesses, charging guns, and automotive connectors within the vehicle; based on the trend of automobile intelligence and electrification, the company continues to invest in smart cockpit controllers, LCD instruments, AR HUD, DMS and other fields. The company signed a “Strategic Cooperation Framework Agreement” with Chery Group, which is expected to quickly enter and enhance the company's comprehensive capabilities as a Tier 1 manufacturer of core components.
The company's revenue for 2023-2025 is 2496.35, 296.546, and 359.130 billion yuan, respectively, and EPS is 1.56, 2.00, and 2.51 yuan, respectively. The current stock price is 18.9, 14.7, and 11.7 times PE, respectively. The company's deep focus and development in the consumer electronics, automotive, communications and medical industries, relying on the comprehensive capabilities of deep accumulation and continuous refinement in the consumer electronics field, the company has built a “process+underlying technology” capability puzzle to achieve new and existing products and other consumption for core customers At the same time as the massive market for electronic customers continues to expand, the company continues to expand its capabilities horizontally, cross borders to the automobile and other sectors, rapidly expand its categories through epitaxial mergers and acquisitions, open up a new growth curve with superior customer resources, cover for the first time, and give it an “increase in weight” investment rating.
Risk warning
the risk of increased competition in the industry;
The risk of developing new products and new technologies;
The risk of product application implementation falling short of expectations;
The risk that downstream demand falls short of expectations.