Company profile
The company is a leading consumer electronics company. Through endogenous and epitaxial growth, it has completed comprehensive coverage of “parts → modules → systems”. In 2023, the company achieved net profit of 10.95 billion yuan, an increase of 20%, and achieved steady growth.
The company's main business categories are consumer electronics, communication connectivity, automotive interconnection, and computer interconnection products, accounting for 85%, 6%, 4%, and 3% of revenue in 2023, respectively.
Investment logic:
1. Apple Intelligence is redefining the AI edge, and the 2025 Apple switching cycle can be expected. ① On the software side, Apple's first generative AI model, AppleIntelligence, was officially launched in June, and Apple Intelligence can only be used for iPhone 15Pro or higher; in terms of hardware, Apple is expected to release the iPhone 17Slim in 2025, and the Slim model may be the biggest cosmetic facelift in ten years; according to IDC, Apple's global ownership in 2023 will reach 840 million units, and the switching cycle is 3.6 years, and software+hardware innovation is promising Drive a new wave of rotary changers. Apple is the company's super-big customer, and it has greatly benefited from downstream volume.
② Since the company began iPhone assembly in 2020, it has become an important growth engine for the company. We estimate that the current iPhone assembly share is 20%. We expect the company's profit to continue to grow in the future as the assembly share continues to grow and profit margins rise. ③ As the OEM factory of Vision Pro, the company is expected to benefit deeply from the product release cycle in the future.
2. The automotive business is growing rapidly, and the world's Tier 1 leading manufacturers can be expected. With the general trend of electrification, intelligence, and integration, domestic vehicle brands are gradually rising. As a domestic consumer electronics leader, the company is expected to grow into a leading global automotive parts tier 1 manufacturer with rapid iteration and cost control capabilities accumulated over history. The company estimates that the value of the bicycle product will reach 3-4 million yuan, covering products such as wiring harnesses, connectors, power management, smart cockpits, etc. The company's automobile business maintained a 50% growth rate from 2021 to 2023, and its share in the trillion automotive electronics market continued to rise. The automobile business is expected to maintain a 50% growth rate in the next three years.
3.AI is booming, and electric connection faucets are expected to benefit deeply. It is estimated that the GB200 NV72 single cabinet complete company can provide 2.09 million yuan solutions, covering products such as electrical connections, optical connections, power management, cooling, etc., and the total market size is expected to reach 100 billion yuan; the company is the third largest communication connector in the world, benefiting from the booming development of the industry.
Profit forecasts, valuations, and ratings
Benefiting from Apple's switching cycle and continued growth in the communications vehicle business, the company's net profit from 2024 to 2026 is estimated to be 135,172,20.5 billion yuan, up 23%, 28%, and 19%. Referring to the average valuation of comparable companies, the company was given a PE valuation of 20 times in 2025, with a target price of 47.9 yuan, and a purchase rating.
Risk warning
Risks such as weak demand in the downstream market; shift in the industrial chain; dependence on a single major customer; fluctuating RMB exchange rates; and falling short of expectations in convertible bond projects.