BYDE posted solid 2Q25 revenue/net profit growth of 4%/22% YoY on rapid growth of higher-margin NEV segment and improving profitability of iPhone casing, despite slower handset casing/OEM and new intelligence segment. During earnings call, mgmt. guided upbeat outlook in 2H25/FY26E, backed by 1) SP: 50% YoY in iPhone casing sales in FY26E on foldable iPhone, 2) Auto: 35-40% YoY sales in FY25E, 3) Liquid cooling: component mass production (MP) in 2H25E, 4) Power-related: GB200/300 product MP in 2H25E, 5) Transceivers: 800G MP in 2H25E (50k/m capacity by FY25E), 1.6T sampling done and CPO target to ship in 2026), 6) Robotics: AMR of 2k units in operations and upgrade in 3rd-gen dexterous hands. Overall, we have adjusted our FY25-27E estimates to reflect 1H25 results, weaker GPM dragged by auto/handset and upbeat AI server outlook. Our new SOTP-based TP of HK$47.37 implies rollover 16.3x FY26E P/E (vs prior 16.2x FY25E P/E). Upcoming catalysts include iPhone launch /upgrade, AI server products’ MP, robotics updates and improving GPM.
　　2Q25 sales/net profit growth of 4%/22% YoY driven by strong NEV and improving margin. BYDE’s 2Q25 sales/NP growth accelerated to 4%/22% YoY (vs 1%/1.9% YoY in 1Q25), thanks to rapid NEV growth on ADAS/ suspension/smart cockpit/thermal products for BYD’s major models, offsetting weaker CE/smartphone and new intelligent products. 2Q GPM continued to improve to 7.4% (vs 6.3%/5.9% in 1Q25/4Q24) on better NEV mix. For 1H25, higher-margin NEV revenue grew 61% YoY, while CE assembly/component declined 2%/10% YoY and new intelligence segment dropped 4% YoY.
　　Smartphone: foldable iPhone upgrade and stable assembly biz. For FY25E, BYDE will focus on high-end components and efficiency improvement in Chengdu plant, while mgmt. guided 50% YoY for US client’ component revenue in FY26E driven by foldable phone and new model wins.
　　NEV components: conservative 35-40% YoY growth in FY25E. In view of near-term industry headwinds, mgmt. guided 35-40% YoY revenue growth with stable GPM in FY25E (vs. prior 50% YoY) mainly driven by strong Parentco orders with share gains (50%+ in thermal, major share in ADAS). For overseas, BYDE expected rapid client expansion in Europe in 2026.
　　AI servers: liquid cooling, power/HVDC, 800G/1.6T transceiver/CPO. BYDE expected AI server ODM revenue of RMB3-5bn in FY25E and targeted mass production of liquid cooling products for one major overseas CSP in 2H25E. Mgmt. also targeted mass production of 800G transceivers in 2H25E and 1.6T in 1H26E, while HVDC products for server rack will start shipment in late 2026 or 2027 given client qualifications were secured earlier.