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; 2) NEV: rising penetration and installation of high-end ADAS and suspension products to drive growth; 3) AI server: positive on ODM products' ramp-up and GB200 component product roadmap with Nvidia. Trading at 11.9x FY25E P/E, we believe the stock is attractive. Our SOTP-based TP is HK$44.41, implying 15.0x FY25E P/E. Maintain BUY and BYDE is our sector top pick.
Smartphones: iPad share gains, Jabil profitability and high-end Android demand. For Apple biz, mgmt. remains positive on iPad/metal share gains and Jabil profitability in 4Q24/2025 thanks to automation, rising UTR, capacity ramp-up and better yield. For Android biz, mgmt. believes high-end demand growth is an ongoing industry trend and BYDE will benefit from Samsung/Xiaomi/Honor new model launches and order wins.
Automotive: revenue to reach RMB30bn in FY25E. Mgmt. highlighted below during our meetings: 1) thermal management and high-end ADAS products to deliver strong growth in 2024; 2) smart cockpit growth driven by Parentco orders; 3) suspension products to enter mass production by end- 2024 and boost sales growth in FY25E; 4) high-end ADAS penetration and shipment growth in FY25E. Overall, mgmt. guided automotive revenue of RMB30bn in 2025 and RMB50-60bn in the long term, driven by rising penetration of ADAS, suspension, and new products ramp-up.
AI server: ODM server shipment on track; guided RMB1bn/3-5bn sales in FY24/25E. Mgmt. reiterated that AI server ODM shipment to domestic CSP customers is well on track. For GB200 server components, mgmt. stated that they are working closely with Nvidia for product qualifications, including coldplate, high-speed connectors, power board and CDU, and expect delivery to kick off in 2025. Overall, mgmt. guided AI server sales to reach RMB1bn in FY24E and RMB3-5bn in FY25E, and guided server component GPM is likely to be at ~10% similar to industry peers.
Maintain BUY. We remain positive on the iPhone AI cycle, stable Android flagship demand, high-end NEV products and AI server momentum in 2025. Trading at 11.9x FY25E P/E, we believe the stock is attractive. Our SOTP- based TP is HK$44.41, implying 15.0x FY25E P/E. Maintain BUY.
