NDR takeaways: Apple, NEV products and AI server are key growth drivers in 2025

比亚迪电子(00285)\r

We hosted BYDE at 4Q outlook NDR call. Mgmt. highlighted their positiveoutlook across all segments in 4Q24/2025: 1) Apple/Android: iPad share gains,Jabil’s enhanced automation and high-end Android demand; 2) NEV: risingpenetration and installation of high-end ADAS and suspension products to drivegrowth; 3) AI server: positive on ODM products’ ramp-up and GB200 componentproduct roadmap with Nvidia. Trading at 11.9x FY25E P/E, we believe the stockis attractive. Our SOTP-based TP is HK$44.41, implying 15.0x FY25E P/E.Maintain BUY and BYDE is our sector top pick.\r

Smartphones: iPad share gains, Jabil profitability and high-endAndroid demand. For Apple biz, mgmt. remains positive on iPad/metalshare gains and Jabil profitability in 4Q24/2025 thanks to automation, risingUTR, capacity ramp-up and better yield. For Android biz, mgmt. believeshigh-end demand growth is an ongoing industry trend and BYDE will benefitfrom Samsung/Xiaomi/Honor new model launches and order wins.\r

Automotive: revenue to reach RMB30bn in FY25E. Mgmt. highlightedbelow during our meetings: 1) thermal management and high-end ADASproducts to deliver strong growth in 2024; 2) smart cockpit growth driven byParentco orders; 3) suspension products to enter mass production by end-2024 and boost sales growth in FY25E; 4) high-end ADAS penetration andshipment growth in FY25E. Overall, mgmt. guided automotive revenue ofRMB30bn in 2025 and RMB50-60bn in the long term, driven by risingpenetration of ADAS, suspension, and new products ramp-up.\r

AI server: ODM server shipment on track; guided RMB1bn/3-5bn salesin FY24/25E. Mgmt. reiterated that AI server ODM shipment to domesticCSP 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, andexpect delivery to kick off in 2025. Overall, mgmt. guided AI server sales toreach RMB1bn in FY24E and RMB3-5bn in FY25E, and guided servercomponent GPM is likely to be at ~10% similar to industry peers.\r

Maintain BUY. We remain positive on the iPhone AI cycle, stable Androidflagship 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 SOTPbased TP is HK$44.41, implying 15.0x FY25E P/E. Maintain BUY.