Incident 1: In the early morning of June 11, Apple launched the personal intelligence system AppleIntelligence at 2024 WWDC. The intelligent system mainly covers functions such as voice interaction, text creation, and image generation. It can understand and generate language and images, and simplify the cross-app interaction process. At the same time, Apple has integrated ChatGPT into iOS, iPadOS, and macOS systems, and will also integrate more third-party AI models in the future.
The implementation of AI accelerates the arrival of switching demand, and the company's mobile phone business is expected to fully benefit. On the mobile phone side, currently only the iPhone 15 Pro and iPhone 15 Pro Max support the Apple Intelligence function, and model restrictions may stimulate demand for next-generation products. In 2023, Zhuhai Guanyu achieved mass production of Apple phone battery products for the first time, and its supply share continued to increase rapidly. With the release of new models from major customers and the implementation of new technology solutions such as steel cases, the company's mobile phone business is expected to increase both in volume and profit.
Incident 2: The company recently received fixed notices from a number of overseas car companies. On June 17, the company issued a notice “Receiving GM's Designated Notice” to develop and supply 12V automotive low-voltage lithium batteries. On April 8, the company issued an announcement “Receiving a fixed notice from Stellantis” to develop and supply 12V automotive low-voltage lithium batteries. The project will be mass-produced in 2026.
Lithium batteries have obvious advantages in replacing lead-acid, and the company's stoppage business is expected to grow rapidly. The energy density of lithium batteries is generally above 100 Wh/kg, while the energy density of lead-acid batteries is about 50 Wh/kg. The energy density of lithium-ion batteries is much higher than that of lead-acid batteries. At the same capacity, lithium batteries weigh only half that of lead-acid batteries. At the same time, the Zhuhai Guanyu 12V LFP battery can be started and stopped 8,000 times, which is much higher than that of lead-acid batteries, which can ensure that the battery does not need to be replaced during the life cycle of the car. The company has accelerated its expansion in the low-voltage start-stop business, and has been selected by many well-known domestic and foreign car companies such as SAIC, Zhiji, Jaguar Land Rover, Stellantis, and GM. We expect that with the introduction of more new customers in the second half of the year, the company's start-stop business is expected to maintain rapid growth.
Investment advice: Considering that the company's consumer batteries benefit from the “AIPC+AI mobile phone” trend, we expect the company to achieve net profit of 7.17/10.96/1,442 billion yuan in 2024-2026, +108.4%/+52.8%/+31.6%. The corresponding EPS is 0.64/0.97/1.28 yuan, maintaining the “buy” rating.
Risk warning: downstream demand falls short of expectations; AI development falls short of expectations; industry competition intensifies.