BYD ELECTRONIC(00285) 56.4 Huachuang Securities: Maintains a "strong recommendation" rating for BYD ELECTRONIC (00285) with a target price of HK$56.4

Huachuang Securities released a research report stating that BYD ELECTRONIC (00285) is a leading platform-type manufacturing company globally, benefiting from the expansion of categories within the large customer system + AI terminal upgrades in the consumer electronics business, and accelerating product expansion in automotive electronics, and cloud collaboration in the AI business sector. According to the third quarter report, the company lowered its net profit forecast for the years 2025-2027 to 46.83/58.08/67.13 billion yuan (51.9/61.94/71.06 billion yuan), with a target price of 56.4 Hong Kong dollars, maintaining a "strong recommendation" rating. Huachuang Securities' key points are as follows: Events In the first three quarters of 2025, the company achieved revenue of 123.285 billion yuan (YOY +0.95%) and net profit attributable to the mother of 3.137 billion yuan (YOY +2.4%). The company achieved revenue of 42.679 billion yuan (YOY -1.99%) and net profit of 1.407 billion yuan (YOY -8.99%) in the third quarter of 2025. Slow sales pace of large customer Air models slightly pressures third quarter performance Consumer electronics, automotive electronics, and new smart products are the company's three main business lines. In the first half of 2025, the consumer electronics (assembly + components) business achieved revenue of 60.946 billion yuan (YOY -3.73%); new energy vehicle business achieved revenue of 12.454 billion yuan (YOY +60.57%); and new smart product business achieved revenue of 7.206 billion yuan (YOY -4.18%). Regarding Apple's iPhone business, the sales pace of the domestic version of the iPhone Air was slightly delayed compared to last year, which slightly pressured revenue and profit in Q3. Automotive electronics / consumer electronics / AI working together for a promising future Automotive electronics: BYD ELECTRONIC, supported by its parent company, continuously expands its product categories. The company's shipments of products such as smart cabins, heat management, and intelligent driving assistance will continue to grow. Smart suspension products will be matched with more models, driving the continuous rapid expansion of the company's new energy vehicle business sector. AI business: Assembling and coordinating with liquid cooling and power supply. The company has established a layout covering general servers, storage servers, AI servers, and immersion liquid cooling solutions, and has become a partner with NVIDIA in the data center field. AI servers are being heavily shipped, with business achieving strong growth. Meanwhile, data center liquid cooling and power supply products have been certified by leading industry enterprises, injecting new momentum into the company's business growth. At the same time, in the terminal, BYD ELECTRONIC has developed AMR's autonomous moving Siasun Robot & Automation, with comprehensive layout for core components such as sensors, actuators, and controllers for Siasun Robot & Automation. Consumer electronics: The acquisition of JPT further deepens the large customer business, and the company is expected to benefit from the new innovation cycle of large customers. At the end of 2023, the company acquired JPT's mobile manufacturing business, with JPT being the main supplier of titanium alloy frames for iPhone 15 Pro. The inclusion of the middle frame business signifies the company's breakthrough in the largest category of mobile products for large customers. In addition to the middle frame business, the company is actively expanding into other product categories, with large customer Apple Intelligence accelerating its AI terminal layout. New products such as foldables are expected to accelerate growth in the consumer electronics business, and the company is expected to benefit deeply.