BYDE posted 2H24 revenue of RMB98.7bn (+34% YoY), largely in-line, but net profit of RMB2.75bn (+9% YoY) is 9%/18% below our/consensus estimates, mainly dragged by weaker GPM at 7.0% (vs 8.2% in 2H23). By segment, 1) CE assembly/components sales grew 21%/136% YoY on high-end Android and Apple share gains, 2) auto biz jumped 60% YoY on strong shipment and product launches, 3) new intelligent declined 15% YoY due to weak household energy storage. Mgmt. will host an analyst briefing at 11:20am HKT today (25 Mar), and we will look for details on 1) GPM outlook given 2H24 miss, 2) Apple’s product pipeline and guidance (iPad/iPhone/smart home), 3) NEV progress and margin trend, and 4) AI server ODM/component business updates.
　　2H24 strong revenue dragged by GPM weakness. BYDE’s strong 2H24 revenue growth of 34% YoY is largely in-line, backed by strong high-end Android ODM/component, Jabil’s consolidation (iPhone casing), and strong NEV business (cockpit/ADAS/suspension/thermal). By segment, assembly/ component/automobile sales delivered 21%/136%/60% YoY growth, while new intelligent biz dropped 15% YoY. 2H24 GPM declined 1.2ppts to 7.0% resulting in earnings growth of 9% YoY, 9%/18% below our/consensus estimates. For 4Q24, revenue/net profit grew 46%/21% YoY.
　　2025 outlook: iPhone/iPad share gains, Jabil profitability, ADAS/cockpit system, AI servers. Looking into 2025, we remain positive on iPhone/iPad share gains, resilient high-end Android demand, automotive ADAS/cockpit system and AI server biz expansion. In terms of margin, we expect high-end Android casing and iPhone casing should deliver better margin in 2025, and automotive thermal/suspension system ramp-up should offset margin pressure.
　　Analyst briefing to focus on margin outlook and Apple/auto/AI server updates; Maintain BUY. Overall, we maintain our positive view on BYDE’s business outlook in FY25E despite near-term GPM pressure. During the analyst briefing today, we will look for more details on 1) GPM outlook given 2H24 miss, 2) Apple business guidance (iPad/iPhone/smart home), 3) NEV progress and margin trend, and 4) AI server business updates (ODM/ components). Maintain BUY.