First Shanghai: maintain byd electronics buy rating target price of HK $23

2022-07-22 0 By

First Shanghai issued a research report that maintained BYD Electronics (00285) “buy” rating, based on 2022 earnings forecast, to 17 times the PE valuation hub, target price of HK $23.The company posted revenue of 89.057 billion yuan in 2021, up 21.8% year on year.In terms of quarter on quarter, revenue increased by 8%, gross profit decreased by 8%, but net profit fell by 70%, lower than expected, mainly due to the increase of related expenses, reduction of subsidies and other reasons.Among them, parts revenue decreased by about 11% year on year, mainly due to weak demand for mid-to-high-end Android models during the year, and mainly due to further improvement of core product revenue of North American customers year on year.Looking back on last year, the company continued to struggle with chip shortages and the impact of weaker demand, especially in the second half of the year, resulting in a significant decline in profitability.According to the industry research of the bank, the demand of the electronic industry is weak in the first quarter of this year, so the bank believes that the overall situation of the company in the first quarter may be similar to that in the fourth quarter of last year. However, with the obvious improvement of chip supply, the bank expects that the overall business situation of the company will be significantly improved after the second half of the year, and the profit margin is expected to gradually recover.Although the performance of HNB’s mobile phone and laptop business is not as good as expected in the past 21 years, the business of new intelligent products and automotive intelligent system has achieved rapid growth.New intelligent products achieved revenue of 12.445 billion yuan, up about 31% year on year, and HNB products from overseas customers went well.The automotive intelligent systems business generated 3.77 billion yuan in revenue, up about 107% year on year.Looking ahead to this year, products such as smart home, uav and HNB will drive the high growth of new intelligent products.As the product category continues to expand to 5G communication module, new products such as intelligent cockpit, intelligent driving, Internet of vehicles and on-board appliances continue to achieve more than double growth this year, and are expected to become the second growth curve in the future.Combined with the evaluation of various brands and products in the electronics industry in recent years, the bank believes that the performance of the two mobile operating system camps tends to diverge, and the product strength of North American customers is further consolidated.With the increase in the share of core products and the introduction of new structural parts into mass production, the bank expects that the company’s revenue volume of North American customers is expected to reach a higher level this year, and the company will continue to benefit from the double improvement of revenue and profit scale brought by customers in the medium and long term, and grow together with customers.