Citi: Raises BYD ELECTRONIC (00285) target price to HKD 28, upgrades rating to "Neutral"

CITI released a research report stating that BYD ELECTRONIC (00285) performed below expectations in the second quarter and the first half of the year, mainly affected by low equipment utilization and foreign exchange losses. The firm raised its target price for the company from HKD 22.6 to HKD 28, and upgraded its rating from "sell" to "neutral." The firm noted that BYD ELECTRONIC expects a slight improvement in performance in the third quarter compared to the second quarter, while the fourth quarter is anticipated to be driven by the mobile business entering a major supply phase, large-scale deliveries of liquid cooling products, and an increase in server delivery volumes, which is expected to mark a turning point for profitability. As for 2027, the traditional 3C business is expected to remain stable in the first half and significantly improve in the second half as new models from major overseas customers enter mass production. The firm stated that the decline in BYD ELECTRONIC's stock price has reasonably reflected the weakness in its consumer electronics business, and the related business likely bottomed out in the first half of this year.