CMBC International: Lowering the target price of BYD ELECTRONIC (00285) to HKD 47, maintaining a "buy" rating.

Bank of China International released a research report stating that BYD ELECTRONIC (00285) revenue in the third quarter dropped by 2% year-on-year to 42.7 billion RMB (same below), lower than the bank's expectations, mainly affected by weak component business and intelligent product business. The gross profit margin was 6.9%, down 1.6 percentage points year-on-year and 0.5 percentage points quarterly, mainly due to a decrease in high gross profit component sales and an increase in the proportion of low-margin assembly business. Net profit for the period was 1.4 billion RMB, down 9% year-on-year, up 27% quarterly, slightly lower than the bank's expectations. The bank has lowered the target price from 52 Hong Kong dollars to 47 Hong Kong dollars, maintaining a "buy" rating. It is believed that the company is still in a transitional period in 2025, moving towards becoming a comprehensive component and assembly supplier, and will increase the sales proportion of high-tech businesses such as servers, with results expected to be seen gradually from 2026.