Lyon's report states that the explosion of communication equipment in Lebanon may lead to the transfer of electronic equipment manufacturing to the mainland. Mainland electronic companies with factories in the mainland may benefit. The bank believes that concerns about Android and Apple in the mainland and Hong Kong technology sectors have been largely reflected, and the valuations of some stocks have reached very attractive levels. The bank's top picks for H shares are BYD Electronic (00285.HK), AAC Technologies (02018.HK), Xiaomi (01810.HK), and GoerTek (01415.HK).

The bank points out that the continuing growth of BYD Electronic's parent company, BYD (01211.HK), in the electric car business can be a driving force for the company's sustained growth. The company's net profit in the second quarter of this year recorded a year-on-year decline, mainly due to the base effect of the same period last year. As the base effect in the third quarter of last year is still high and the production of iPhone metal shell is accelerating, the bank expects the company's net profit in the third quarter to decline year-on-year, with growth turning positive in the fourth quarter. The bank rates the stock as 'outperform the market' with a target price of 38.4 yuan.

As for AAC Technologies, the bank points out that the company is achieving its profit growth as planned, with reduced losses in the optical business, natural growth in Apple's business, and growth in automotive acoustics business. The bank rates the stock as 'outperform the market' with a target price of 38.6 yuan. In addition, the bank also mentioned that most investors are no longer concerned about the gross profit of Xiaomi smartphones, but are interested in Xiaomi's new models of electric cars and the company's post-2026 electric car production capacity expansion plan. The bank rates the stock as 'outperform the market' with a target price of 24.5 yuan.

Lyon stated that GoerTek has made more progress than expected in developing the periscope and ultra-wide-angle camera modules for iPhone 16 Pro and iPhone 16 Pro Max. The company's market share in these products is close to 40%, higher than the bank's previous expectation of over 30%. The bank rates the stock as 'outperform the market' with a target price of 28.5 yuan.