BYDE reported in-line 3Q25 revenue but earnings were dragged by weaker smartphonecomponents (iPhone casing), new intelligent product revenue decline and lower GPM,while NEV biz maintained stable growth. During investor call, mgmt. guided flattishrevenue/GPM in 4Q25E due to iPhone component drag and AI server project delay, andexpected stronger revenue growth in 2026 driven by component upgrade (foldable phone), new smart home product launch, NEV high-end products ramp-up and AI serverproject shipment (liquid cooling, HVDC, power). We lower our FY25-27E EPS by 8-14%to factor in 3Q results and CE mix impact, and we remain positive on BYDE’s growthopportunities in NEV/AI server growth in FY26-27E. Our new SOTP-based TP ofHK$43.54 implies 16.2x FY26E P/E. Maintain BUY.
　　3Q revenue in-line but earnings dragged by margins; Expect stable rev/GPMYoY in 4Q25E. BYDE’s 3Q revenue decline of 2% YoY was largely in-line with ourestimate, while net profit (-9% YoY) was dragged by iPhone casing spec changesand major customer’s shipment delay to 4Q. For 4Q25E/FY25E, mgmt. guided 1)flattish 4Q revenue thanks to stable product mix and customer mix; 2) stable GPMYoY on seasonality and smartphone component ramp; 3) FY25E NEV revenue ofRMB25bn (vs. prior RMB30-35bn) given weaker shipment despite content increase;and 4) AI server components’ multiple client wins and revenue contribution in1Q26E.
　　2026 outlook: foldable iPhone, NEV product penetration, AI servers (liquidcooling, HVDC, power). Looking ahead to 2026, mgmt. is positive on 1) consumerelectronics: content value increase for foldable iPhone, stable Android high-endcomponents and new smart home product launch; 2) NEV: rising penetration of highendsuspension products, thermal management products’ ramp-up and clientexpansion to Europe and Japan; 3) AI servers: GB200/GB300 projects (liquidcooling, power, rack) to start shipment in 1Q26E, Rubin projects and HGX liquidcooling components to start mass production in 2H26E, HVDC orders to deliver in2H26E, and 400G/800G optical module capacity ready for shipment. Overall, mgmt.expects GPM recovery in 2026 driven by ramp-up of higher-margin smartphonecomponents, NEV components and AI server component products.
　　Expect 2025 to be a transitional year; Reiterate BUY on multiple growth driversin 2026. We have lowered our FY25-27E EPS by 8-14% to factor in 3Q results,slower consumer electronics and lower GPM. Our new SOTP-based TP ofHK$43.54 implies 16.2x FY26E P/E. Trading at 12.9x FY26E P/E, the stock offersattractive risk/reward in our view. Upcoming catalysts include iPhone shipmentupside, AI server products' client wins/shipment, robotics breakthrough and GPMimprovement.
　　Valuation
　　Maintain BUY with new SOTP-based TP of HK$43.54We maintain our positive view on BYDE’s outlook in FY26E and expect improving revenuemix will continue to drive GPM recovery in FY26E. We maintain BUY and our TP is basedon SOTP valuation to reflect BYDE’s business diversification with different growth profilesand visibility.
　　Our new SOTP-based TP of HK$43.54 implies 16.2x FY26E P/E. We assign the same setof P/E multiples: 15x P/E to its assembly EMS business, 15x for iPhone casing and 15xP/E for component business, given Android’s business margin recovery and Apple’sbusiness expansion. We assign a target P/E multiple of 16x for new intelligent and 18x forNEV segments to reflect their growth potential and higher earnings visibility.