1、 See the last page for disclaimer Page 1 of 27 Equity Research Equity Research Report Company Report 股股票票研研究究 公公司司报报告告 证证券券研研究究报报告告 通信设备行业通信设备行业 Telecommunication Equipment Sector 比亚迪电子比亚迪电子 BYD Electronic(00285 HK)Company Report:BYD Electronic(00285 HK)Gin Yu 余劲同(86755)2397 6686 公司报告：比亚迪电子(00285 HK

2、).hk 3 August 2022 Leading Platform-Based Manufacturer With Rapid Scale Expansion,Initiate With Buy 规模快速扩张的领先平台型制造商，首予“买入”评级 We initiate coverage on BYD Electronic with a TP of HK$24.97 and an investment rating of Buy.As consumer electronics,automotive,and other intelligent product businesses are al

3、l expected to grow rapidly,we forecast EPS to be RMB0.969/RMB1.415/RMB1.731 in FY22-FY24,respectively.With reference to the valuation level of comparable companies,we give the Company a TP of HK$24.97 and an investment rating of Buy.Rapid scale expansion.For the major customer in North America,we ex

4、pect the Companys share of assembly business to continue growing with the rising production capacity.We also expect new projects from Google and Lenovo to partially ease the pressure on the Android market.Due to rapid growth of BYD new energy vehicle sales,the Companys smart vehicle system sales is

5、expected to grow rapidly,while demand for communication modules for external tier-1 customers is expected to continuously rise.The Company is also expected to transfer more unused production capacity from Android business to automotive intelligent system business given strong demand to alleviate cos

6、t pressure.Markets such as robot vacuum,gaming hardware,and drones are expected to maintain rapid growth,thus we expect that the new intelligent product business will continue to gain growth momentum.The Companys product expansion depth to major customer in North America is expected to exceed market

7、 expectations.We expect mass production in the Vietnam factory and mass production of new glass structural parts will open up new growth space,and given deepening of cooperation with the major customer,the Company is expected to introduce more product lines to the customer in the future.Catalyst:Mas

8、sive production of new glass products and new factories.Risk warning:Slower-than-expected penetration into major customer business;Android market may remain weak;repeated pandemic outbreaks.我们首次覆盖比亚迪电子并给予我们首次覆盖比亚迪电子并给予 24.97 港元的目标价以及港元的目标价以及“买入买入”的投资评级。的投资评级。由于公司的消费电子、汽车、其他智能产品业务均将快速发展，我们预测公司 2022 财

9、年至 2024 财年的每股盈利为人民币 0.969/1.415/1.731 元。参考可比公司估值水平，我们给予公司 24.97港元的目标价以及“买入”的投资评级。规模快速扩张。规模快速扩张。北美大客户方面，我们预计公司组装业务的份额将随着产能的增长而持续上升。我们还预计谷歌、联想等新项目将部分缓解安卓市场的压力。由于比亚迪新能源汽车销量的迅猛增长，公司的智能车机系统销量预计将快速上升，同时外部 tier-1 客户通讯模组产品的需求预计也会持续上升。预计公司还会将更多闲置产能从安卓业务转移至需求强劲的汽车智能系统业务，从而缓解成本压力。扫地机器人、游戏硬件以及无人机等市场预计将保持较快增长态势，

10、因此我们预计新型智能产品业务将持续获得增长动力。公司对北美大客户的产品拓展深度有望超出市场预期。公司对北美大客户的产品拓展深度有望超出市场预期。我们预计越南工厂的量产和新玻璃结构件产品的量产将开辟新的增长空间，同时随着与大客户合作的深化，公司未来有望向客户推出更多产品线。催化剂：催化剂：新玻璃产品和新工厂的量产。风险提示：风险提示：大客户渗透情况不及预期；安卓市场继续疲软；疫情反复。Rating:Buy Initial 评级：买入买入 (首次覆盖)6-18m TP 目标价:HK$24.97 Share price 股价:HK$20.300 Stock performance 股价表现 Chan

11、ge in Share Price 股价变动 1 M 1 个月 3 M 3 个月 1 Y 1 年 Abs.%绝对变动%-18.0 26.4-49.1 Rel.%to HS Index 相对恒指变动%-8.1 33.1-24.3 Avg.Share price(HK$)平均股价（港元）21.8 19.1 24.5 Source:Bloomberg,Guotai Junan International.Table_Year End Turnover Net Profit EPS EPS PER BPS PBR DPS Yield ROE 年结 收入 股东净利 每股净利 每股净利变动 市盈率 每股净

12、资产 市净率 每股股息 股息率 净资产收益率 12/31(RMB m)(RMB m)(RMB)(%)(x)(RMB)(x)(RMB)(%)(%)2020A 73,121 5,441 2.415 240.6 7.1 9.885 1.7 0.241 1.4 27.7 2021A 89,057 2,310 1.025(57.6)16.1 10.664 1.6 0.103 0.6 10.0 2022F 107,688 2,184 0.969(5.5)17.8 11.530 1.5 0.097 0.6 8.7 2023F 125,875 3,188 1.415 46.0 12.2 12.847 1.3

13、0.142 0.8 11.6 2024F 140,644 3,901 1.731 22.3 10.0 14.436 1.2 0.174 1.0 12.7 Shares in issue(m)总股数(m)2,253.2 Major shareholder 大股东 BYD 65.8%Market cap.(HK$m)市值(HK$m)45,740.0 Free float(%)自由流通比率(%)34.2 3 month average vol.3 个月平均成交股数(000)14,315.2 FY22 Net gearing(%)FY22 净负债/股东资金(%)Net Cash 52 Weeks hi

14、gh/low(HK$)52 周高/低(HK$)42.000/13.200 FY22 Est.NAV(HK$)FY22 每股估值（港元）29.5 Source:the Company,Guotai Junan International.(70.0)(60.0)(50.0)(40.0)(30.0)(20.0)(10.0)0.0 10.0 Aug-21Oct-21Jan-22Apr-22Jul-22%of returnHSI IndexBYD Electronics Company Report See the last page for disclaimer Page 2 of 27 3 Aug

15、ust 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)Table of Contents Core Investment Points.3 Company Introduction:Leading Platform-Based Manufacturer.4 Smartphones and Tablets as the Core,Automotive Intelligent System and New Intelligent Products are Quickly Expanding.4

16、 Stable Shareholding Structure.7 Rapidly Rising Revenue Scale and Expected Recovery in Profitability.7 Assembly Business:Expansion in Market Share.9 Steady,Highly Concentrated EMS Market.9 Orders from the Major Customer in North America to Drive High Growth.10 Android Assembly Business to Remain Und

17、er Pressure;Expected to Improve qoq.11 Components and Parts Business:New Products Open Up Room for Growth.11 Rising Glass and Ceramic Structural Parts.11 Huge Room for Market Expansion on the Major Customer in North America.13 Diversified Customer Bases to Stabilize Android Structural Parts Business

18、.14 Automotive Intelligent System Business:Both Volume and Price to Rise.15 Rapidly Rising New Energy Vehicles and Vast Space for Automotive Electronics.15 Strong Growth of Parent Company and Strong Demand from External Customers.16 New Intelligent Product Business:Diversified Layout in Growth Track

19、.18 E-cigarette:Broad Market Space.18 Robot Vacuums and Drones:Industry Giants to Drive the Companys Development.18 Game Hardware and Other Smart Devices:Technology Advancement to Drive Demand.19 Earnings Forecasts and Investment Rating.21 Earnings Forecasts.21 Valuation and Investment Rating.22 Key

20、 Risks.22 Financial Statements and Ratios.26 WYEYVW4XDVQX4WEW9PdN6MnPrRsQnPkPrRuMeRrRsO9PrRwPNZpOsMuOrMtN Company Report See the last page for disclaimer Page 3 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)Core Investment Points Core investment points:BY

21、D Electronic(the Company)mainly focuses on assembly as well as components and parts businesses,covering smartphone and PC products,automotive intelligent system,and other intelligent products,among others.The Company entered into iPad assembly in 2019 and quickly expanded its presence in the supply

22、chain.We expect that the Electronics manufacturing services(EMS)share of the major North American customer will continue to shift from Taiwan-based manufacturers to mainland China-based manufacturers,such as the Company.Regarding Android business,we expect 2H22 to see qoq improvement,while new struc

23、tural parts projects from Google pixel phone and Lenovo notebooks will partially ease the pressure on the Android market.As the main supplier of BYD Company Limiteds(BYD)electronic vehicle system,the Company will fully benefit from the high sales growth of BYDs new energy vehicles;meanwhile,with exp

24、ansion of the product line,value per car is expected to further increase in 2023 and beyond.The Companys automotive intelligent business is expected to improve due to rising demand from external tier-1 customers.With its capabilities of large-scale precision manufacturing and rapid production capaci

25、ty expansion,the Company is continuously expanding its layout in fields like robot vacuums,gaming hardware,e-cigarettes,drones,etc.We believe that all corresponding fields are growth tracks,thus the business is expected to continue to grow steadily.In terms of profitability,due to the relatively low

26、 capacity utilization rate,the Companys gross margin declined significantly in 2021 and is expected to continue to decline yoy in 1H22.However,the smartphone market is expected to recover qoq in 2H22,while the Company is also expected to transfer more unused production capacity from Android business

27、 to automotive intelligent system business,thus we expect gross margin to recover in 2H22,and further recover yoy in 2023.Product expansion depth of the Companys major customer in North America is expected to exceed market expectations.With mass production in the Vietnam factory in 1H22,the Company

28、will further expand its market share of the assembly business of the major North American customer while strengthening its partnership with the customer.In addition,it is expected that new glass structural parts products will be mass-produced in Zhongshan plant in 2H22,and we expect that this produc

29、t will open up new growth space for the Company.We expect that the assembly business and components&parts business will compliment each other,thus boost the deepening of cooperation with customers,and the Company is expected to introduce more product lines to customers in the future.Catalysts:Recove

30、ry of the consumer electronics market;massive production of new glass structural parts products and new factories;recovery of production capacity utilization.Risk warning:Penetration rate into the major customer in North Americas business is less than expected;the Android market may remain weak;repe

31、ated pandemic outbreaks may strain supply and logistics,thus affecting demand;new e-cigarette regulation in China adds uncertainty.Company Report See the last page for disclaimer Page 4 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)Company Introduction:Le

32、ading Platform-Based Manufacturer Smartphones and Tablets as the Core,Automotive Intelligent System and New Intelligent Products are Quickly Expanding BYD Electronic is a platform-based manufacturing enterprise covering smartphone and PC products,new intelligent products,automotive intelligent syste

33、m as well as medical and health applications.Having commenced operations in 2002 as a division of the BYD mainly manufacturing handset components and modules in December 2002,the Company was spun off from BYD and listed on the Main Board of the Hong Kong Stock Exchange on December 2007,and quickly e

34、xpanded into more areas including assembly services,automotive electronics,new intelligent products,face masks,etc.Table-1:Key Milestones Year Milestones 2002 Operated as a business division under BYD.2003 Became business partner with Huawei and Samsung.2006 Started assembly service for smartphone c

35、lients.2007 Initial public offering on the Hong Kong Stock Exchange.2011 Launched PMH(Plastic Metal Hybrid)technology to the market and started the metal smartphone era.Entered the booming tablet PC market.2013 Material laboratory certified by CNAS national certification.2017 Started independently d

36、esigning and manufacturing 3D glass hot-bending equipments through flexible automated production.Mastering whole process technology of ceramics and became the only company in the world capable of providing large-scale whole series casing of materials including metal,glass,ceramic and plastic.Made pr

37、ominent progress in automotive electronics and began supply to automotive clients.Chosen by MSCI China Index.2018 Metal parts shipments exceeded 200 million and accounted for 1/3 of the global shipments of metal Android phones.2019 Became the supplier of iPad assembly service.Annual capacity of 3D g

38、lass casing reached over 200 million pieces.Accelerated R&D in 5G radio frequency devices and materials as well as 5G vehicle communication modules.Invested in the 3rd generation semiconductor material SiC.2020 Volume of drones,robot vacuums,electronic atomization equipment,etc.,continued to expand.

39、Helped society amid health product shortages during the COVID-19 pandemic and continued to explore the medical equipment market.2021 Enforced strategic collaboration with the major client in North America and kept on expanding its product portfolio.Accomplished the core patent layout and capacity co

40、nstruction of electronic vaping products.Revenue from its automotive intelligent system doubled yoy.Source:the Company,Guotai Junan International.Company Report See the last page for disclaimer Page 5 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)The Comp

41、anys business comprises of mainly the following three main business lines:smartphone and PC products,new intelligent products,and automotive intelligent system.In FY20,due to the initial outbreak of the COVID-19 pandemic,revenue from medical products rose significantly and took up nearly 18%of the t

42、otal revenue.Excluding the medical and others business,in FY21,smartphone and PC business occupied 81.5%of total revenue,slightly increasing 0.3 ppt yoy,while the new intelligent product business took up around 14.2%,declining 1.6 ppt yoy,but is still higher than that in FY19 and before.The automoti

43、ve intelligent system business consisted of 4.2%of the total and grew more than 107%yoy.Geographically,as the Company continues to penetrate into the supply chain of the major customer in North America with its assembly and structural parts ability,revenue from overseas is increasing remarkably.Figu

44、re-1:BYD Electronics Revenue Breakdown by Business Figure-2:BYD Electronics Revenue Breakdown by Region Source:the Company,Guotai Junan International.Source:the Company,Guotai Junan International.Figure-3:Notable BYD Electronic Customers Source:the Companies,Guotai Junan International.The Companys s

45、martphone and PC business can be further subdivided into assembly business as well as components and parts business.In 2021,smartphone and PC assembly business accounted for 78.1%of the revenue of smartphone and PC business.The assembly services cover both Android customers and Apple(mainly covering

46、 iPad currently),while components and parts business covers back covers,middle frames,front covers and decorative pieces;and in terms of materials,components and parts business covers metal,glass,ceramic and plastic,etc.The Company can promote its components and parts business through its assembly b

47、usiness.Although the profit margin for assembly business is relatively low,the Company imports components and parts business which allows for higher gross margin through cooperation with customers in its assembly business by utilizing its strong capabilities in metal,glass and ceramic.35,517 45,409

48、48,719 71,632 4,340 6,025 9,476 12,445 1,190 1,594 1,817 3,770 13,109 1,210-10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 2018A2019A2020A2021ARMB MillionSmartphone and PC business New intelligent productsAutomotive intelligent system businessMedical products and others79.1%8

49、2.2%69.9%46.3%20.9%17.8%30.1%53.7%2018A2019A2020A2021APRC(including Hong Kong,Macau and Taiwan)Overseas Company Report See the last page for disclaimer Page 6 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)Figure-4:BYD Electronics Vertical Integration Stra

50、tegy Figure-5:Some of BYD Electronics Components and Parts Business Products Source:the Company,Guotai Junan International.Source:ZOL,Guotai Junan International.The Companys automotive intelligent system business has huge room for development.By utilizing its extensive experience in electronics,comm

51、unications and automotive-related fields,and active development of auto intelligent systems,intelligent driving cockpits and autonomous driving systems,the Company created DiLink auto intelligent system solutions;the representative products are multimedia central control,4G/5G communication modules,

52、etc.The major client of the business is parent company BYD,but the Company is also working closely with international mainstream tier-1 manufacturers.Figure-6:BYD Electronics Automotive Communication Module Figure-7:BYD Electronics Dlink Products Source:the Company,Guotai Junan International.Source:

53、Autohome,Guotai Junan International.Figure-8:BYD Electronics Automotive Intelligent System Source:the Company,Guotai Junan International.GlassMetalPlasticAssemblyVerticallyIntegratedFunctionalCeramicsAppearanceCeramics Back CoverMiddle FrameFront CoverIntelligent Cockpit4G/5G Communication ModuleT-B

54、OXMultimedia Central ControlHMIADASOn-board Computing UnitSensor ModuleDomain ControllerConnectedVehicleAutonomousVehicle Company Report See the last page for disclaimer Page 7 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)The Company has a broad layout i

55、n new intelligent products,including robot vacuum products,gaming hardware,e-cigarettes,smart home,drones,smart POS,etc.Due to strong market demand and the Companys profound designs,development and manufacturing capabilities,shipments of robot vacuums,gaming hardware and intelligent furniture produc

56、ts rose rapidly.The Company revenue from new intelligent products business rose by 31.3%yoy to RMB12,445 million in FY21.For e-cigarettes,due to continuous investment,the Company mastered the technology of metal and plastic casings,ceramic atomizing,motherboard production and assembly,especially for

57、 heat-not-burn(HNB)products.Figure-9:BYD Electronics Main New Intelligent Product Pool Source:the Company,Guotai Junan International.Stable Shareholding Structure The Companys ownership structure is stable,while its management is experienced in the industry.The Companys major shareholder is BYD Comp

58、any Limited(BYD),as at the end of 2021;BYD indirectly holds approximately 65.76%of the Companys issued share capital.Mr.Wang Chuan-Fu is the actual controller of BYD and serves as BYDs executive director and chairman of the board of directors,as well as the non-executive director of the Company.Mr.W

59、ang Nian-Qiang and Mr.Jiang Xiang-Rong are executive directors of the Company,while Mr.Wang Nian-Qiang also serves as the Companys chief executive.Figure-10:BYD Electronics Shareholding Structure as at 31 December 2021 Source:the Company,Guotai Junan International.Rapidly Rising Revenue Scale and Ex

60、pected Recovery in Profitability The Companys operating revenue is growing continuously,while gross margin is expected to recover in 2H22.From 2016 to 2021,CAGR of BYD Electronics revenue was 19.4%，while CAGR of shareholders net profit was 13.4%.In 2021,the Companys revenue increased significantly b

61、y 21.8%to RMB89,057 million,mainly due to the substantial growth of iPad assembly business as well as the rapid growth of automotive intelligent business and new intelligent products business.However,gross profit margin in 2021 decreased by 6.4 ppt yoy to 6.8%,mainly due to the low capacity utilizat

62、ion brought by shortage of upstream chip supply and the downturn in the Android smartphone market in 2H21,as well as the rise in proportion of low-gross profit margin assembly business.Repeated outbreaks of COVID-19,soaring inflation and macroeconomic headwinds collectively dampened consumer desire

63、to spend on new smartphones,and hammered the market and forced smartphone manufacturers to slash orders.Given prevalent weak demand and intense market competition,we believe that it will be difficult to significantly Robot VacuumGaming HardwareSmart HomeDroneElectronic CigaretteSmart POSGolden LinkG

64、old DragonflyH ShareholdersBYD Electronics65.8%5.8%28.4%BYD HKBYD100%100%BF Trustee100%Mr.Wang Chuan-fu17.8%BYD PrecisionHuizhou ElectronicBYD IndiaXian Electronic,Changsha Electronic,Shaoguan Electronic100%100%100%100%Company Report See the last page for disclaimer Page 8 of 27 3 August 2022 BYD El

65、ectronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)increase the Companys production capacity utilization rate from the 2021 level and therefore overall gross margin will continue to be under pressure.However,we may see improvement both in the supply chain and demand in 2H22 as supply o

66、f chips and other components improve and the China market gradually returns to normal.Besides,the Company is transferring unused capacity in Android assembly to automotive intelligent system business,which will mitigate the impact of the relatively low capacity utilization rate.Thus,gross profit mar

67、gin is expected to recover qoq.The Company has maintained the intensity of R&D investment to ensure long-term competitiveness,and meanwhile expense ratios are being properly controlled.In the past four years,the Companys R&D to revenue ratio has remained between 3.5%and 4.0%.We expect that with the

68、substantial increase in the proportion of assembly business,the ratio of R&D expenses to revenue will decrease slightly,and will be around 3.5%.Besides,the Companys administrative expense ratio and selling and marketing expense ratio have both remained stable.Figure-11:BYD Electronics Revenue Figure

69、-12:BYD Electronics Shareholders Net Profit Source:the Company,Guotai Junan International.Source:the Company,Guotai Junan International.Figure-13:BYD Electronics Profit Margins Figure-14:BYD Electronics Expense Ratios Source:the Company,Guotai Junan International.Source:the Company,Guotai Junan Inte

70、rnational.36,73438,77441,04753,02873,12189,05725.4%5.6%5.9%29.2%37.9%21.8%0%5%10%15%20%25%30%35%40%010,00020,00030,00040,00050,00060,00070,00080,00090,000100,0002016A2017A2018A2019A2020A2021ARMB MillionTotal Revenue(LHS)YoY Growth(RHS)1,2332,5852,1891,5985,4412,31035.8%109.6%-15.3%-27.0%240.6%-57.5%

71、-100%-50%0%50%100%150%200%250%300%01,0002,0003,0004,0005,0006,0002016A2017A2018A2019A2020A2021ARMB MillionShareholders net profit(LHS)YoY Growth(RHS)7.6%11.0%10.2%7.5%13.2%6.8%3.4%6.7%5.3%3.0%7.4%2.6%0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%2016A2017A2018A2019A2020A2021AGross marginNet magin0.5%0.6%0.6%0.

72、5%0.3%0.3%1.5%1.1%1.3%1.2%0.9%1.2%2.7%3.1%3.9%3.9%4.0%3.7%0%1%1%2%2%3%3%4%4%5%2016A2017A2018A2019A2020A2021ASelling&marketing expenses/revenueAdministrative expenses/revenueR&D expense/revenue Company Report See the last page for disclaimer Page 9 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Ta

73、ble_PageHeader BYD Electronic(00285 HK)Assembly Business:Expansion in Market Share Steady,Highly Concentrated EMS Market The electronics manufacturing services(EMS)industry includes a wide spectrum of fields and has decent growth potential.With businesses and supply chains becoming increasingly comp

74、licated and specialized,the EMS industry has presented useful partnership opportunities for OEMs to help in areas covering product design to post-production services,enabling the production process to be more professional,smoother and more cost-effective.In 2021,according to Global Market Insights,t

75、he global EMS market size reached about US$500 billion despite disruptions caused by the COVID-19 pandemic,up 4.7%yoy.By application,3C products(computer,communication and consumer electronics)prevailed the most,followed by aerospace&defense,medical&health care,automotives,and others.As complexity a

76、nd variety is continuously evolving,EMS providers with high-quality manufacturing processes,wide range of services,wide global presence and knowledge in products have better chance to stand out in the competitive environment.A well-diversified product portfolio has enabled EMS providers to withstand

77、 the headwinds from the demand side and we expect that the EMS industry will continue to enjoy many opportunities.Figure-15:Global EMS Industry Market Size Source:New Venture Research,Guotai Junan International.Figure-16:Industry Chain of Electronics Manufacturing Services Source:HonHai Precision,Gu

78、otai Junan International.372430444471866170715.7%3.2%6.2%14.8%0.6%6.1%7.1%7.0%7.0%0%2%4%6%8%10%12%14%16%18%005006007008002017 2018 2019 2020 2021 2022F2023F2024F2025F2026FEMS market size(LHS)YoY Growth(RHS)US$MillionUS$Million Company Report See the last page for disclaimer Pag

79、e 10 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)In terms of competition landscape,the EMS industry is largely dominated by companies in Taiwan,but we expect market share to shift to mainland China manufacturers.In the 2021 rankings published by MMI,Hon

80、Hai Precision(Foxconn),Pegatron and Wistron dominate the top 3 places,which are all headquartered in Taiwan.BYD Electronic is listed in 6th place and represents the highest growth pace(up by 35.5%yoy)among the top 10.Due to strong players in the Greater China region,in 2021,the APAC region accounted

81、 for 82.0%of the top 50 EMS by revenue,which amounted to US$417 billion,increasing 9.9%yoy.Due to the active capacity expansion as well as mergers and acquisitions of mainland Chinese manufacturers,we expect that the share of mainland Chinese manufacturers in the EMS market will continue to rise.Tab

82、le-2:Rank of EMS Providers-2021 Rank Company Headquarter Revenue-2021(in US$million)1 HonHai Precision(Foxconn)New Taipei 214,612 2 Pegatron Taipei 45,245 3 Wistron Taoyuan 30,865 4 Jabil St.Petersburg 29,285 5 Flex San Jose 26,041 6 BYD Electronic Shenzhen 13,809 7 USI Shanghai 8,574 8 Sanmina San

83、Jose 6,757 9 New Kinpo Group New Taipei 5,005 10 Celestica Toronto 5,635 Source:Manufacturing Market Insider(MMI),Bloomberg,Guotai Junan International.Note:For New Kinpo Group,we only include revenue from its subsidiary:Kinpo Electronics Orders from the Major Customer in North America to Drive High

84、Growth We expect the Company to further acquire market share in the supply chain of the major customer in North America.The Company started assembly business for iPad in 2019 and the business scale in 2020 and 2021 achieved explosive growth.Although explosive growth was achieved,the Companys share i

85、n iPad assembly is still relatively low compared to Taiwan-based manufacturers,and has huge room for development.With the start of mass production in the Vietnam factory in 2H22,the Company will further increase its production capacity of iPad assembly to meet demand of its customers,thus promoting

86、its market share in iPad assembly.Besides,with deepening cooperation with customers,the Company may be able to enter into the assembly line with more products by utilizing its rapid production capacity expansion capability and good quality control;e.g.Apple Watch,Macbook and iPhone products.Figure-1

87、7:Global Tablet Shipments Figure-18:Global iPad Shipments Source:IDC,Guotai Junan International.Source:IDC,Guotai Junan International.144.5 163.5 168.4 158.0 152.5-1.2%13.1%3.0%-6.2%-10%-5%0%5%10%15%551701752019A2020A2021A2022F2026FGlobal tablet shipments(LHS)YoY Growth(RHS)Mil

88、lion43.843.349.953.357.824.73.0%-1.1%15.2%6.8%8.4%-3.5%-5%0%5%10%15%20%0 10 20 30 40 50 60 70 2002020211H22iPad shipments(LHS)YoY Growth(RHS)MillionMillion Company Report See the last page for disclaimer Page 11 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electr

89、onic(00285 HK)Android Assembly Business to Remain Under Pressure;Expected to Improve qoq We expect android assembly business to record yoy decline in 2022,but 2H22 will see qoq improvement.Currently,the Companys major android assembly business customers are Xiaomi,Honor and Huawei.Due to impact from

90、 lackluster demand,repeated local epidemic outbreaks,supply shortages and alarming inflation,the Android smartphone market faced strong pressure in 1H22.We expect 2022 to see yoy decline in Android smartphone shipments as unfavorable factors still weigh on the industry.However,looking into 2H22,we e

91、xpect QoQ performance to improve as supply and demand balance of product supply chains continue to improve and the China market gradually normalizes.From a long-term perspective,5G will still will have application potential in the future considering the better quality in speed,throughput,latency and

92、 capacity,which will promote shipments of 5G smartphones.On the other hand,the sluggish Android smartphone market severely affected the capacity utilization rate of assembly lines,which significantly lowered the gross profit margin;but the Company is transferring the unused production capacity from

93、Android assembly to automotive intelligent system business,which is expected to mitigate the impact of relatively low capacity utilization rate.Figure-19:Global Smartphone Shipments Figure-20:Market Share of Global Smartphone Manufacturers-2021 Source:IDC,Guotai Junan International.Source:IDC,Guotai

94、 Junan International.Components and Parts Business:New Products Open Up Room for Growth Rising Glass and Ceramic Structural Parts Structural parts are essential supportive and protective components for a wide array of downstream industries.There are various kinds of structural parts which are made o

95、f different materials,namely plastic,metal,glass and ceramic.They are often found in consumer electronics(smartphones,tablets,etc.),automobiles and other products as essential supportive and protective components.There are several features that characterize the structural parts industry.First,regard

96、ing different orders from different clients,the requirements are neither identical nor standardized,which encourages manufacturers to collaborate closely with their clients in research,design and manufacturing.Second,the highly customizable nature results in concentrated core clients.With consumer e

97、lectronics such as the smartphone and PC industries,the major portion of market share is in the hands of just several leading brands,where there is considerable appetite for orders.Therefore,serving these large clients well paves way for structural parts firms to succeed and any accident would be de

98、trimental to this beneficial relationship.Third,the yield rate is essential to a structural parts firms business and financial results as the manufacturing process becomes long and complex,even a tiny mistake could result in a defective product.Therefore,even though there are numerous industries tha

99、t structural parts manufacturers can participate in,we think that the manufacturers with deep industry and product knowledge,strong manufacturing capability and deft supply chain management are more likely to stand out from the fierce competition.Regarding the current market situation,the pandemic,a

100、larming inflation and growing geopolitical tension that are affecting both the supply and demand,for example,commodity prices are soaring and smartphone demand is contracting.However,with supply issues being mitigated,we expect the structural parts market to recover.Besides,we expect structural part

101、s to penetrate into more areas,such as vehicle electronics,medical instruments and e-cigarettes.1.47 1.40 1.37 1.28 1.35 1.31 1.35-0.5%-4.3%-2.1%-6.7%5.7%-3.5%3.0%-8%-6%-4%-2%0%2%4%6%8%1.151.21.251.31.351.41.451.52017A2018A2019A2020A2021A2022F2023FGlobal smartphone shipments(LHS)YoY Growth(RHS)Billi

102、on20.1%17.4%14.1%9.9%9.5%29.1%SamsungAppleXiaomiOPPOvivoOthers Company Report See the last page for disclaimer Page 12 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)Figure-21:Market Size by Shipment Value of the Global Smartphone Enclosure and Module Solu

103、tion Industry Figure-22:Breakdown by Application Sector by Shipment Value,2020 Source:Frost&Sullivan Report,Guotai Junan International.Source:Frost&Sullivan Report,Guotai Junan International.Glass front cover+glass back cover+metal middle frame is the mainstream technical route for the current marke

104、t.The back covers of mobile phones went through the development trend from plastic to metal,then to glass.In the era of feature phone,plastic is the mainstream back cover material;due to low cost and minimal signal interference,plastics are currently still used in many low-end smartphones.Due to bet

105、ter texture and heat dissipation,metal gradually replaced plastic with the coming of the smartphone era.Since metal back covers will interfere with 5G signals,and will also affect wireless charging,glass has gradually replaced metal as the mainstream material for the back cover of smartphones.Due to

106、 the high costs and low production yield,ceramic is still a relatively niche technical route.Table-3:Comparison of Structural Parts Materials Material Main ingredients Costs Difficulty in manufacturing Electromagnetic shielding Abrasion resistance Heat dissipation Shatter resistance Texture and appe

107、arance Plastics PC(Polycarbonate)Lowest Lowest Low Weak Slow Strong Not very comfortable to hold,cheap appearance Metal Aluminum Alloy、Stainless Steel Higher Higher High Weak Fast Strong Hot in summer and cold in winter due to its fast heat dispersion,but better appearance than plastic Glass Alumino

108、silicate Higher Higher Low Strong Slow Weak Smooth when holding,classy appearance,flexible to customize with colorful effects Ceramic Zirconia Highest Highest Low Strong Slow Weak Smooth when holding,classy appearance Source:Xincailiao,Guotai Junan International.BYD Electronic is the market leader i

109、n metal structures,and its share in glass structures is expected to rise.Currently,the Company is the No.1 metal casing manufacturer in Android smartphones,with a market share over 40%in the Android smartphone market;the Company has more than 30 technologies in metal and more than 30,000 computerize

110、d numerical control(CNC)machines.In terms of glass structures,the Company has a number of advanced technologies and mature production lines that can realize the whole process of 3D glass construction from hot-bending,CNC,polishing,strengthening,printing,PVD,etc.,as well as self-made equipments for d

111、ecoration film and key processes.The Company has already become the leading 3D glass vendor,but its market share in glass structures is still much lower than its share in metal structures.We believe that the Companys glass front cover and back cover business still has huge market potential.At presen

112、t,due to high cost and difficulty in manufacturing,ceramics are mainly used in some high-end models,but with the rising yield rate and the Companys complete material and manufacturing technology from ceramic powder granulation,blank forming,sintering,precision dimension processing,polishing,post-pro

113、cessing,etc,we expect penetration rate of the Companys ceramic structures business in high-end smartphone models to increase gradually.21,62722,71522,97423,69324,36826,43627,75229,20631,18733,358-1.5%5.0%1.1%3.1%2.8%8.5%5.0%5.2%6.8%7.0%-2%0%2%4%6%8%10%05,00010,00015,00020,00025,00030,00035,00040,000

114、2001920202021F 2022F2023F2024F2025FUS$MillionUS$MillionMarket Size of the Global Smart Device Enclosure and Module(LHS)YoY Growth(RHS)70.2%62.3%14.8%11.2%8.5%10.5%5.3%10.1%0.1%1.3%1.1%4.6%0%10%20%30%40%50%60%70%80%90%100%20202025FOthersVR/ARAutomotiveSmart WatchTabletSmartphone Company Re

115、port See the last page for disclaimer Page 13 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)Figure-23:Market Size by Shipment Value of Global Smartphone Enclosures and Modules by Material Figure-24:Market Size by Shipment Value of Global Tablet Enclosures

116、 and Modules by Material Source:Frost&Sullivan Report,Guotai Junan International.Source:Frost&Sullivan Report,Guotai Junan International.Huge Room for Market Expansion on the Major Customer in North America We expect shipments of structural parts for the Apple Watch to increase steadily,while new gl

117、ass structural parts products will bring huge growth potential to the Company.Due to rising demand for health monitoring applications,smartwatch shipments are on the rise.Shipments rose significantly by 23.8%yoy in 2021 and 13%yoy in 1Q22.The Apple Watch dominates the market with more than 30%and 36

118、%market share of the global smartwatch market in 2021 and 1Q22 according to Counterpoint.The Apple Watch series 8 may add a body temperature monitoring function in 2H22,and blood pressure monitoring and blood sugar monitoring functions in the future.Being an important part of Apples ecosystem and ha

119、ving a loyal crowd,we expect Apple Watch shipments to continue rising with more and better health functions,as well as upgrades in both hardware and software.The Company already occupies a large share of the glass cover and ceramic back plate in Apple Watch,thus we expect steady Apple Watch shipment

120、s to continue promoting the Companys components and parts business.Besides,new glass structural parts products for the major customer in North America are expected to be mass produced at Zhongshan plant in 2H22;given the huge market space for these products and customer supply chain balance strategi

121、es,we expect that the new products will provide strong growth momentum to the business.Last but not least,the Companys continuous expansion in iPad assembly business will promote the development of its iPad structural parts business.Figure-25:Global Apple Watch Shipments Figure-26:Global iPhone Ship

122、ments Source:Counterpoint,Strategy Analytics,Guotai Junan International.Source:IDC,Guotai Junan International.7,175 8,171 9,218 11,167 12,030 12,601 13,862 14,292 14,747 15,503 16,520 5,719 4,833 4,706 3,304 2,912 2,467 2,377 2,262 2,051 1,861 1,662 2,605 2,736 2,395 1,786 1,545 1,383 1,365 1,313 1,

123、309 1,288 1,223 175 219 373 492 598 652 764 912 1,094 1,297 1,367-5,000 10,000 15,000 20,000 25,000 200021F 2022F 2023F 2024F 2025FUS$MillionGlassMetalPlasticSapphire,Ceramic and Others1,773 1,467 1,346 1,181 1,148 1,228 1,310 1,364 1,420 1,476 1,537 2,498 1,977 1,882 1,766 1,8

124、64 2,032 2,006 1,959 1,914 1,880 1,845 574 491 430 342 293 343 334 334 334 341 349-1,000 2,000 3,000 4,000 5,000 6,000 2001820192020 2021F 2022F 2023F 2024F 2025FUS$MillionGlassMetalPlastic17.2 22.5 28.4 33.9 38.4 12.1 31.0%26.2%19.4%13.2%14.0%0%5%10%15%20%25%30%35%0 10 20 30 40 50 201720

125、0211Q22Apple Watch shipments(LHS)YoY Growth(RHS)MillionMillion215.8208.8191203.4235.7101.10.2%-3.2%-8.5%6.5%15.9%1.4%-10%-5%0%5%10%15%20%0 50 100 150 200 250 2002020211H22iPhone shipments(LHS)YoY Growth(RHS)MillionMillion Company Report See the last page for disclaimer Page 14

126、of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)Diversified Customer Bases to Stabilize Android Structural Parts Business We expect android components and parts business to be basically stable in 2022.Similar to android assembly business,android components

127、and parts business has been affected by the weak Android smartphone market.However,unlike android assembly business,android components and parts business has a more diversified customer base;in addition to Xiaomi,Honor and Huawei,there are also companies such as Samsung,OPPO,vivo,etc.In addition,the

128、 Company will import the metal casing for Lenovo notebooks and the metal middle frame of the Google Pixel Phones,which are expected to bring new business.Foldable smartphones are bringing fresh experiences to consumers and are growing fast compared to traditional smartphones,with 7.1 million units s

129、hipped in 2021,surging 264.3%yoy.Although the number of shipments is insignificant compared to traditional models,shipments are rapidly rising;due to more complex and precise structure,we expect the explosive growth of foldable smartphones to bring new opportunities to the structural parts market in

130、 the future.Figure-27:Global PC Shipments Figure-28:Shaft of Foldable Smartphone Source:IDC,Guotai Junan International.Source:the Company,Guotai Junan International.275.8 260.2 259.6 259.6 267.7 303.9 349.9 321.2 339.0-10.6%-5.7%-0.2%0.0%3.1%13.5%15.1%-8.2%-15%-10%-5%0%5%10%15%20%05003003

131、504002015A 2016A 2017A 2018A 2019A 2020A 2021A 2022F 2026FGlobal PC shipments(LHS)YoY Growth(RHS)Million Company Report See the last page for disclaimer Page 15 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)Automotive Intelligent System Business:Both Volu

132、me and Price to Rise Rapidly Rising New Energy Vehicles and Vast Space for Automotive Electronics Chinas automobile market is quickly recovering and new energy vehicles are expected to maintain strong growth.In 1H22,the local COVID-19 epidemic in China resulted in some major cities being placed into

133、 lockdown,notably in Shanghai where many automobile manufacturers exist.Data has shown that sales in 1H22 contracted 6.6%yoy to 12.1 million units,however,automobile sales quickly recovered in June 2022 with 24.1%yoy growth and 33.3%qoq growth.In the case of negative growth in overall automobile sal

134、es,new energy automobiles continued to demonstrate strong momentum with 120%yoy growth to 2.6 million units despite supply and logistics challenges during 1H22,which accounted for 21.5%of total automobile sales.As companies and factories are restarting businesses and favorable policies are being rel

135、eased,the entire automobile market is quickly recovering.In the long run,as countries are racing shoulder to shoulder to achieve carbon neutrality,China is no exception and has set ambitious goals to deal with carbon emissions.Promoting new energy vehicles(NEV)is one of the vital measures that China

136、 is taking to reduce carbon emissions and currently NEV sales still trail that of fossil fuel cars,which also represents tremendous space to fill.In addition to favorable policies,the electric vehicle current charging infrastructure still cannot fulfill consumers needs.According to China Electric Ve

137、hicle Charging Infrastructure Promotion Alliance(EVCIPA)and China Association of Automobile Manufactures(CAAM),although there are 1.53 million charging piles and 10.01 million electric vehicles owned as at the end of 1H22,which equates to one charging pile for approximately 6.5 electric vehicles,the

138、y are highly concentrated in urban areas and thereby unable to support drivers much outside urban areas.Therefore,demand will rise much faster once there are more public electric vehicle chargers.Moreover,as increasing numbers of electric vehicle brands emerge and start to produce a wide array of el

139、ectric vehicles,it is becoming much easier and more acceptable for consumers to choose a product they want in every price range.With the governments positively affirmative attitude towards new energy vehicles and the maturing of industry chains,we believe that new energy vehicle manufacturers have c

140、onsiderable opportunities to grow,penetration rate will continue growing.Automotive electronics will grow rapidly as more vehicles will be electrified,digitalized and even autonomous.By application,automotive electronics can generally can be divided into ADAS,entertainment,powertrain,safety systems

141、and body electronics.The global automotive electronics market grew 7.2%yoy to US$274 billion in 2021,while in China it has been evolving remarkably,amounting to approximately US$110 billion in 2021,representing yoy growth of 7.3%.The ever-increasing sales of new energy vehicles indicates that the fu

142、ture of automobiles is mostly electric and consumers are expecting cars to be safer,more intelligent and have include more types of digital entertainment,which all require the evolution of LiDAR,sensors,cameras,and human-vehicle interaction systems,etc.The cockpit will be equipped with more hardware

143、 powered by chips with strong computing capacity,among which IVI(In-Vehicle Infotainment)systems will take up the main portion of the whole system.Naturally,with more chip-powered hardware and software being built into cars,the cost of automobile electronics per car is increasing significantly,and w

144、e expect automotive electronics as a percentage of total cost per car to increase steadily.Overall,we believe that the trend of vehicle electrification and intelligence will bring broad development space for the automotive electronics industry.Figure-29:Automobile and New Energy Automobile Sales in

145、China Figure-30:Automobiles and New Energy Automobiles Owned in China Source:China Association of Automobile Manufacturers,Guotai Junan International.Source:The Ministry of Public Security,Guotai Junan International.28.0 28.9 28.1 25.8 25.3 26.3 12.1 0.50.81.31.21.43.52.613.9%3.0%-2.8%-8.2%-1.8%3.8%

146、-6.6%53.6%53.3%61.6%-4.0%13.3%157.6%120.0%-20%0%20%40%60%80%100%120%140%160%180%055200H22Million Automobile Sales in China(LHS)New Energy Automobile Sales in China(LHS)YoY Growth-Automobile Sales in China(RHS)YoY Growth-New Energy Automobile Sales in China(RHS)194217

147、2402602813023100.91.52.63.84.97.810.012.8%11.9%10.6%8.3%8.1%7.5%6.2%116.7%68.1%70.6%46.0%29.1%59.3%65.9%0%20%40%60%80%100%120%140%0500300350200H22Million Automobile Owned in China(LHS)New Energy Automobile Owned in China(LHS)YoY Growth-Automobile Owned in China(RHS)Y

148、oY Growth-New Energy Automobile Owned in China(RHS)Company Report See the last page for disclaimer Page 16 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)Figure-31:Global Automotive Electronics Market Size Figure-32:Chinese Automotive Electronics Market Si

149、ze Source:Precedence Research,Guotai Junan International.Source:Intelligence Research Group,Guotai Junan International.Figure-33:Automotive Electronics as a Percentage of Total Cost(per car)Source:Intelligence Research Group,Guotai Junan International.Strong Growth of Parent Company and Strong Deman

150、d from External Customers BYDs new energy vehicle sales performance is growing rapidly,and as a major supplier of BYDs vehicle system,the Company will continue to benefit.Meanwhile,demand from external customers will also be strong.Since a major amount of BYD Electronics automotive intelligent syste

151、m revenue is contributed by its parent company BYD,the performance of BYD is crucial to its success.After a two-year decline since 2018,a remarkable jump in automobile sales was recorded in 2021,registering yoy growth of 73.3%.New energy vehicles served as the main contributor to the phenomenal succ

152、ess,increasing 218.3%yoy.In March 2022,BYD terminated oil-fueled vehicle production.The strategy so far has delivered satisfying results with new energy vehicle sales for 1H22 skyrocketing to 641,350 units,marking a yoy increase of 314.9%.We expect that automobile sales of BYD will continue signific

153、ant growth,thus giving strong growth drive to the product shipments of automotive intelligent system business.Aside from the fact that the increasing popularity in new energy vehicles gives automotive electronics opportunity to shine,BYD Electronic will introduce more products,such as ADAS,to enrich

154、 its product mix,which may help elevate the value of automotive electronics per car.Besides,the demand for communication in automobiles is increasing,thus revenue from communication modules for external tier-1 customers is expected to rise continuously.Therefore,we expect the automotive intelligent

155、system business to grow continuously.256 274 295 316 340 365 7.2%7.3%7.4%7.4%7.5%0 50 100 150 200 250 300 350 400 202020212022F2023F2024F2025FGlobal Automotive Electronics Market(LHS)YoY Growth(RHS)US$BillionUS$Billion8087961031101189.9%10.1%7.0%7.3%7.0%0%2%4%6%8%10%12%0204060801720182019

156、202020212022FAutomobile Electronics Market in China(LHS)YoY Growth(RHS)US$BillionUS$Billion0.9%3.2%3.6%10.0%15.2%19.1%29.6%34.3%49.6%0%10%20%30%40%50%60%00201020202030FAutomobile Electronics as a Percentage of Total Cost Company Report See the last page for disclaimer Page 17 o

157、f 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)Figure-34:BYD Total Auto Sales Figure-35:BYD New Energy Vehicle Sales Source:BYD,Guotai Junan International.Source:BYD,Guotai Junan International.Figure-36:Global Internet of Vehicles Market Size Figure-37:Glob

158、al Internet of Vehicles Market Penetration Source:EqualOcean,Forward Industry Research Institute,Guotai Junan International.Source:EqualOcean,Forward Industry Research Institute,Guotai Junan International.Figure-38:BYD Eletronics Automotive Intelligent System Products Source:the Company,Guotai Junan

159、 International.520.7461.4427.0740.1646.4-11.4%-7.5%73.3%161.0%-40%0%40%80%120%160%200%00500600700800200211H22Total Auto Sales(LHS)YoY Growth(RHS)000247.8229.5189.7603.8641.4-7.4%-17.3%218.3%314.9%-50%0%50%100%150%200%250%300%350%00500600700200211H22New Ene

160、rgy Vehicle Sales(LHS)YoY Growth(RHS)000245 643 1,546-200 400 600 800 1,000 1,200 1,400 1,600 1,800 201520202025FRMB billion30.7%38.4%45.0%49.4%52.2%55.1%57.6%59.4%0%10%20%30%40%50%60%70%20021F2022F2023F2024F2025FSmart CockpitIntelligent DrivingIntelligent DrivingControllerInterior and Ex

161、terior TrimCentral control systemInstrumentation systemADASAutomatic parkingShift panelDomain controllerSafety handleCharging/USBBattery management systemGlass decorative plate Company Report See the last page for disclaimer Page 18 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader

162、BYD Electronic(00285 HK)New Intelligent Product Business:Diversified Layout in Growth Track E-cigarette:Broad Market Space The massive market size of the traditional cigarette market and low penetration rate of the e-cigarette market signals high potential for growth.Data from iiMedia shows that in

163、2021,global market size of new types of cigarettes was US$56.9 billion,up by 25.6%yoy,but the penetration rate is still low compared to the whole tobacco market.Within the category,the vaping type of e-cigarettes makes up the main constituent but the HNB type is also expanding vigorously.In terms of

164、 e-cigarettes,being an alternative choice of combustible cigarettes and with a low penetration rate,e-cigarettes are rising as the next generation of products to complement traditional tobacco.Both the midstream parts suppliers and downstream OEM brands are growing exponentially.BYD Electronic has b

165、een successfully shipping HNB products to overseas major customers and vapor products are also on the way.Except for structural parts and printed circuit board assembly(PCBA)of e-cigarettes,the Company plans to put HNB ODM projects of overseas customers into mass production in 2H22,which is expected

166、 to drive incremental growth to the business.Considering the Companys low penetration rate compared with its peers like Smoore International and the tremendous market size,as well as its release of more new products,we expect that e-cigarettes business will brace for decent growth.Figure-39:NGP Reve

167、nue and as percentage of the Total Figure-40:Vaping and HNB(Heat-Not-Burn)Market Size Source:Phillip Morris International,British American Tobacco,Imperial Brands,Guotai Junan International.Note:NGP(Next Generation Products):vapor,HNB and oral nicotine Source:iiMedia Research,Guotai Junan Internatio

168、nal.Robot Vacuums and Drones:Industry Giants to Drive the Companys Development The robot vacuum industry is on the fast track of development as a result of technology advancement and shift in habits.The main customer of BYD Electronics in the robot vacuum field is iRobot.The idea of using robots to

169、clean emerged in 2001 with the release of the first generation of robot vacuum by Electrolux.In the following year,the now robot vacuum giant iRobot introduced its signature product,Roomba.In 2021,the global market size of robot vacuums was US$2,790 million(excluding China)and iRobot remains the dom

170、inant player with 53%global market share(excluding China)and 69%in North America.Despite supply and logistics challenges caused by the pandemic,iRobot managed to ship approximately 5.60 million robot vacuums in 2021 and ASP has also been rising,reaching US$332.As robot vacuum cleaners are equipped w

171、ith advanced technology,such as using AI technology to navigate itself,and are able to accomplish cleaning tasks more efficiently and emancipate people from burdensome daily chores,they have become more appealing and acceptable for consumers.Currently,we believe that robot vacuums are still in the e

172、arly stages of significant market penetration,and are expected to maintain rapid growth.We expect that market growth of iRobot will lead the market and benefit upstream suppliers like BYD Electronic.6.67.48.912.213.1%20.1%36.5%7.5%8.4%9.7%12.4%0%10%20%30%40%0246801920202021Top 3 Internati

173、onal Tobacco Companies NGP Revenue(LHS)YoY Growth(RHS)NGP Revenue as percentage of the Total(RHS)US$BillionUS$Billion21.5 26.7 30.6 35.9 42.4 46.8 5.3 8.5 14.7 21.1 31.4 39.9 0 20 40 60 80 100 200212022E2023EVapingHNBUS$US$BillionBillion Company Report See the last page for disclaimer Pag

174、e 19 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)Figure-41:iRobots Share in Different Markets in 2021 Figure-42:iRobots Shipments and ASP Source:iRobot,Guotai Junan International.Source:iRobot,Guotai Junan International.As a core supplier of DJI,the Com

175、pany will continue to benefit from strong market demand for drones.Civil drones are generally divided into consumer and industrial drones.Consumer drones are more likely to please individuals by shooting panoramic pictures in an artistic sense and thus are designed for leisure.As for industrial dron

176、es,there are a wide range of variety of scenarios that these drones can be used in industry,like in agriculture,surveillance,patrol and logistics.The flexibility it provides makes it a perfect tool to use and trust,which makes investors increasingly interested in this booming industry;in 2021,invest

177、ment in the drone industry skyrocketed to approximately US$7,000 million,growing by 186.5%yoy.Therefore,we believe that the drone market will expand vigorously,and given DJIs advanced technical capabilities and leading market position,we expect BYD Electronics to continue to benefit as its supplier.

178、Figure-43:Global Drone Market Size and Forecast Figure-44:Global Drone Investments Source:Drone Industry Insights,Guotai Junan International.Source:Drone Industry Insights,Guotai Junan International.Game Hardware and Other Smart Devices:Technology Advancement to Drive Demand The smart hardware indus

179、try has been ever-growing thanks to progress in technology,such as AI and IoT.With more advanced technology,such as AI and machine learning that demand increasing computation power,the role of GPU chips is expanding its territory beyond PCs and games consoles.When it comes to discrete GPUs,NVIDIA do

180、minates the biggest share of approximately 78%of the discrete GPU market and its scale will further rise considering the booming demand in gaming,data centers and smart vehicles.As a supplier to NVIDIA,the Company is expected to benefit from the continuous development of the GPU market.The number of

181、 connected POS has been growing rapidly to more than 38.9 million units in 2021,despite tighter regulation in 2019 to curb illegal activity using POS.Intelligent POS not only can perform normal functions,but are also equipped with additional functionalities like recognizing QR codes and collecting t

182、ransaction data.With increasing numbers of consumers accustomed to paying with QR codes and the fact that sales data from this technology is also helpful to merchants,as well as richer functions and new opportunities brought by e-CNY,we expect the penetration rate of intelligent POS to rise continuo

183、usly.53%69%43%66%47%31%57%34%0%20%40%60%80%100%Global(excl China)North AmericaEMEAJapaniRobotOthersSize:$2,790MGrowth:+7%Size:$985MGrowth:+1%Size:$1,390MGrowth:+13%Size:$250MGrowth:+8%2.94 3.70 4.50 4.99 5.49 5.60 224 239 243 303003500.00 1.00 2.00 3.00 4.00 5.00 6.00 201620172

184、0021Robot units shipped(mn units,LHS)ASP(US$,RHS)14.1 18.0 20.9 26.3 30.4 33.8 28%16%26%16%11%0%5%10%15%20%25%30%0554020021E2022E2023EGlobal Drone Revenue(LHS)YoY Growth(RHS)US$US$BillionBillion628 711 945 2,002 3,798 4 6 113 25 2,629 38 31 261 401 529 12%76%84%186%0

185、%20%40%60%80%100%120%140%160%180%200%01,0002,0003,0004,0005,0006,0007,0008,000200202021VC ValueIPO/PIPE ValueOtherYoY(RHS)US$US$MillionMillion Company Report See the last page for disclaimer Page 20 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK

186、)Figure-45:Global PC Discrete GPU Market Size Figure-46:Discrete GPU Market Share Source:IDC,Guotai Junan International.Source:Jon Peddie Research(JPR),Guotai Junan International.Figure-47:NVIDIAs Revenue by Segment Figure-48:Number of POS in China Source:NVIDIA,Guotai Junan International.Source:The

187、 Peoples Bank Of China,Guotai Junan International.Note:Data of number of connected intelligent POS in 2021 is unavailable.7.68.26.98.313.68.4%-15.8%19.8%63.8%-20%-10%0%10%20%30%40%50%60%70%02468720021Discrete GPU-PC Overall Revenue(LHS)YoY Growth(RHS)US$BillionUS$Billion81%83%8

188、3%78%78%19%17%17%18%17%5%4%0%20%40%60%80%100%1Q212Q213Q214Q211Q22NVIDIAAMDIntel5.56.25.57.812.53.6 1.92.93.06.710.63.8 2.32.52.42.23.80.940.6%20.6%-6.8%52.7%61.4%46.4%-20%-10%0%10%20%30%40%50%60%70%051015202530FY17FY18FY19FY20FY211QFY22GamingData CenterOthersTotal Revenue YoY Growth(RHS)US$US$Billio

189、nBillion22.8 24.5 31.2 34.1 30.9 38.3 38.9 0.11.02.56.911.615.00554045200021Million Million number of connected POS(LHS)number of connected intelligent POS(LHS)Company Report See the last page for disclaimer Page 21 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)T

190、able_PageHeader BYD Electronic(00285 HK)Earnings Forecasts and Investment Rating Earnings Forecasts Smartphone and PC business:Due to continuing penetration into supply chains of the major customer in North America and the continuous expansion into the glass structural parts market,we expect smartph

191、one and PC business to increase by 15.1%/12.4%/8.2%in FY22-FY24,respectively.Automotive intelligent system business:With the surge in BYDs auto sales,strong demand from external customers,and the Companys expanding business scope,we expect automotive intelligent system business to increase by 117.2%

192、/61.6%/33.5%in FY22-FY24,respectively.New intelligent product business:Due to strong product sales of the Companys major customers in fields of smart products and expanding market space,we expect new intelligent product business to increase by 27.8%/18.6%/14.6%in FY22-FY24,respectively.Figure-49:BYD

193、 Electronics Revenue from Smartphone and PC Assembly Business Figure-50:BYD Electronics Revenue from Smartphone and PC Components and Parts Business Source:the Company,Guotai Junan International.Source:the Company,Guotai Junan International.Figure-51:BYD Electronics Revenue from Automotive Intellige

194、nt System Business Figure-52:BYD Electronics Revenue from New Intelligent Product Business Source:the Company,Guotai Junan International.Source:the Company,Guotai Junan International.We forecast EPS to be RMB0.969/RMB1.415/RMB1.731 in FY22-FY24,respectively.Based on our forecasts on revenue growth a

195、nd expenses,we forecast shareholders net profit to change by-5.4%/45.9%/22.4%in FY22-FY24,respectively.31,15255,97766,45375,41281,72316.0%79.7%18.7%13.5%8.4%0%10%20%30%40%50%60%70%80%90%010,00020,00030,00040,00050,00060,00070,00080,00090,0002020A2021A2022F2023F2024FRMB MillionSmartphone and PC assem

196、bly business revenue(LHS)YoY Growth(RHS)17,56715,65515,99217,27718,606-5.4%-10.9%2.2%8.0%7.7%-15%-10%-5%0%5%10%14,00014,50015,00015,50016,00016,50017,00017,50018,00018,50019,0002020A2021A2022F2023F2024FRMB MillionSmartphone and PC components and parts business revenue(LHS)YoY Growth(RHS)1,8173,7708,

197、18913,23117,66014.0%107.5%117.2%61.6%33.5%0%20%40%60%80%100%120%140%02,0004,0006,0008,00010,00012,00014,00016,00018,00020,0002020A2021A2022F2023F2024FRMB MillionAutomotive intelligent system business revenue(LHS)YoY Growth(RHS)9,47612,44515,90518,86321,61757.3%31.3%27.8%18.6%14.6%0%10%20%30%40%50%60

198、%70%05,00010,00015,00020,00025,0002020A2021A2022F2023F2024FRMB MillionNew intelligent products revenue(LHS)YoY Growth(RHS)Company Report See the last page for disclaimer Page 22 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)Figure-53:BYD Electronics Profi

199、t Margins Figure-54:BYD Electronics Shareholders Net Profit Source:the Company,Guotai Junan International.Source:the Company,Guotai Junan International.Valuation and Investment Rating We initiate our coverage on BYD Electronic with a target price of HK$24.97 and an investment rating of Buy.With refe

200、rence to the PE ratios of comparable companies,and considering the high-growth attributes of each business line of the Company,we give a 15.0 x PE ratio in FY23 corresponding to TP of HK$24.97;PE ratios in FY22 and FY24 are 21.9x and 12.3x,respectively.With reference to the PB ratios of comparable c

201、ompanies,we give a 1.7x PB ratio in FY23,corresponding to TP of HK$25.69;PB ratios in FY22 and FY24 are 1.9x and 1.5x,respectively.Combining the two valuation methods and taking a conservative stance,we give a target price of HK$24.97 and an investment rating of Buy.Figure-55:BYD Electronics PE Grap

202、h Figure-56:BYD Electronics PB Graph Source:Bloomberg,Guotai Junan International.Source:Bloomberg,Guotai Junan International.Key Risks Penetration rate into the major customer in North Americas business is less than expected.Due to the fact that the share increase and business expansion in major cus

203、tomers in North America are the main drivers of the Companys revenue growth,the financial performance of the Company will be affected if the progress does not go as planned.Repeated COVID-19 outbreaks may strain supply and logistics while affecting demand.If repeated COVID-19 outbreaks cause major c

204、ities to be locked down in the future,supply and logistics will be negatively harmed.Besides,demand for consumer discretionary goods including mobile phones,tablets,PCs,etc.,will be affected;all these factors will cut demand for the Companys products,affecting capacity utilization rate.13.2%6.8%6.3%

205、6.9%7.2%7.4%2.6%2.0%2.5%2.8%0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%2020A2021A2022F2023F2024FGross marginNet magin5,4412,3102,1843,1883,901240.6%-57.5%-5.4%45.9%22.4%-100%-50%0%50%100%150%200%250%300%01,0002,0003,0004,0005,0006,0002020A2021A2022F2023F2024FRMB MillionShareholders net profit(LHS)YoY Growth

206、(RHS)051015202530Aug-20Sep-20Oct-20Nov-20Dec-20Jan-21Feb-21Mar-21Apr-21May-21Jun-21Jul-21Aug-21Sep-21Oct-21Nov-21Dec-21Jan-22Feb-22Mar-22Apr-22May-22Jun-22Jul-22Average-1 SD+1 SD0123456Aug-20Sep-20Oct-20Nov-20Dec-20Jan-21Feb-21Mar-21Apr-21May-21Jun-21Jul-21Aug-21Sep-21Oct-21Nov-21Dec-21Jan-22Feb-22M

207、ar-22Apr-22May-22Jun-22Jul-22Average-1 SD+1 SD Company Report See the last page for disclaimer Page 23 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)The Android market may remain weak.The Companys assembly as well as components and parts business will be

208、negatively affected if demand stays low.Besides,competition will be intense if weak demand continues.Therefore,the Companys revenue and profit margins will be affected,given the low capacity utilization rate.New regulations on e-cigarettes in China adds more uncertainty to the whole market and the C

209、ompany.The Company may spend extra in costs in getting production approval and technology approval or even cut its scale in order to comply with new regulation.Company Report See the last page for disclaimer Page 24 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00

210、285 HK)Table-4:Peers Comparison Market Cap PER PBR ROE(%)PSR EV/EBITDA Company Ticker Currency Price(HKD Mil)22F 23F 24F 22F 23F 24F 22F 22F 22F Byd Electronic Intl Co Ltd 00285 HK HKD 20.300 45,740 17.6 11.8 9.2 1.5 1.3 1.2 8.8 0.4 7.8 Assembly and Components Fih Mobile Ltd 02038 HK HKD 1.010 8,042

211、 n.a.21.5 12.9 0.6 0.6 0.5 2.7 0.1 1.5 Hon Hai Precision Industry 2317 TT TWD 108.000 391,980 10.0 9.0 8.1 1.0 0.9 0.9 10.3 0.2 5.3 Pegatron Corp 4938 TT TWD 63.000 44,020 10.3 9.0 8.3 1.0 0.9 0.9 9.1 0.1 5.3 Wistron Corp 3231 TT TWD 26.400 20,065 10.8 7.6 7.1 0.9 0.8 0.8 8.5 0.1 5.6 Compal Electron

212、ics 2324 TT TWD 22.950 26,480 10.5 10.3 10.0 0.9 0.9 0.8 8.5 0.1 7.8 Quanta Computer Inc 2382 TT TWD 78.700 79,587 11.5 10.4 9.2 1.8 1.7 1.6 16.0 0.3 7.4 Jabil Inc JBL US USD 59.240 63,966 8.0 7.6 7.2 3.2 2.6 2.1 43.6 0.2 3.9 Flex Ltd FLEX US USD 16.630 59,538 8.4 7.7 7.1 1.9 1.8 1.5 24.7 0.3 6.5 Sa

213、nmina Corp SANM US USD 45.680 21,817 9.7 9.1 7.2 n.a.n.a.n.a.16.4 0.4 n.a.Plexus Corp PLXS US USD 94.010 20,450 21.4 17.0 14.7 2.4 2.1 1.8 11.9 0.7 10.7 Benchmark Electronics Inc BHE US USD 25.780 7,110 14.6 13.4 n.a.n.a.n.a.n.a.n.a.0.4 n.a.Kimball Electronics Inc KE US USD 21.510 4,196 15.5 10.9 9.

214、6 1.2 1.0 n.a.7.6 0.4 6.2 Universal Scientific Indus-A 601231 CH CNY 17.630 45,076 16.0 13.4 11.9 2.6 2.3 2.0 16.9 0.6 10.2 Dbg Technology Co Ltd-A 300735 CH CNY 10.720 9,645 15.1 11.8 9.7 1.7 1.6 1.5 11.6 n.a.n.a.Celestica Inc CLS CT CAD 13.490 10,151 6.2 5.7 5.4 n.a.n.a.n.a.13.8 0.2 3.9 Venture Co

215、rp Ltd VMS SP SGD 17.520 29,033 14.6 13.6 12.6 1.8 1.7 1.6 12.6 1.5 9.3 Siix Corp 7613 JP JPY 968.000 2,924 7.8 6.5 5.4 0.6 0.6 0.6 8.5 0.2 n.a.Kaga Electronics Co Ltd 8154 JP JPY 3,265.000 5,617 5.7 5.7 5.5 0.8 0.7 0.7 15.7 0.2 3.9 Scanfil Oyj SCANFL FH EUR 7.100 3,707 13.0 11.7 11.0 2.0 1.8 1.6 15

216、.8 0.6 8.4 Simple Average 11.9 10.7 9.1 1.5 1.4 1.3 13.8 0.4 6.5 Weighted Average 11.1 9.8 8.7 1.5 1.3 1.2 14.6 0.3 6.1 Structural Parts Fit Hon Teng Ltd 06088 HK HKD 1.210 8,793 9.2 7.9 6.6 0.4 0.4 0.4 5.1 0.2 2.0 Tongda Group Holdings Ltd 00698 HK HKD 0.124 1,205 4.0 3.1 2.5 0.1 0.1 0.1 3.4 0.1 2.

217、2 Ju Teng International Hldgs 03336 HK HKD 1.370 1,644 6.9 4.7 3.5 0.2 0.2 0.2 3.5 0.1 n.a.Foxconn Technology Co Ltd 2354 TT TWD 48.300 17,887 11.2 10.4 9.5 0.5 0.5 0.5 5.8 0.6 0.5 Catcher Technology Co Ltd 2474 TT TWD 168.000 32,097 14.9 15.1 15.1 0.8 0.8 0.8 5.3 3.6 1.9 Lens Technology Co Ltd-A 30

218、0433 CH CNY 10.890 62,909 21.2 14.3 11.1 1.2 1.1 1.0 7.5 1.0 9.0 Shenzhen Everwin Precision-A 300115 CH CNY 12.840 17,912 29.2 17.4 n.a.2.5 2.3 n.a.7.1 1.0 n.a.Suzhou Dongshan Precision-A 002384 CH CNY 28.800 57,197 21.8 18.0 14.7 3.0 2.6 2.2 14.1 1.4 11.6 Luxshare Precision Industr-A 002475 CH CNY

219、34.680 285,409 25.0 18.9 15.3 5.3 4.2 3.4 21.8 1.2 14.5 Lingyi Itech Guangdong Co-A 002600 CH CNY 5.010 41,148 20.9 17.0 14.1 0.8 0.7 0.7 9.9 1.0 n.a.Suzhou Anjie Technology Co-A 002635 CH CNY 17.910 14,213 28.4 20.4 16.3 2.0 1.8 1.7 6.7 2.5 14.6 Simple Average 17.5 13.4 10.9 1.5 1.4 1.1 8.2 1.2 7.0

220、 Weighted Average 22.7 17.4 14.2 3.5 2.9 2.4 15.7 1.3 11.8 Vehicle Electronics Huizhou Desay Sv Automotiv-A 002920 CH CNY 197.310 127,256 94.4 68.1 51.1 17.1 14.2 11.7 18.9 8.6 72.3 Ningbo Joyson Electronic -A 600699 CH CNY 20.930 33,259 51.8 28.2 21.9 2.4 2.2 2.0 5.1 0.6 12.4 Foryou Corp 002906 CH

221、CNY 55.790 30,831 63.1 45.2 34.6 6.3 5.4 4.7 9.7 4.6 45.9 Shenzhen Soling Industrial-A 002766 CH CNY 6.430 6,327 n.a.n.a.n.a.n.a.n.a.n.a.n.a.n.a.n.a.Visteon Corp VC US USD 124.770 27,543 24.7 15.8 12.2 7.3 6.1 4.6 24.0 1.1 10.9 Aptiv Plc APTV US USD 106.380 226,244 27.5 18.5 14.5 3.2 2.8 2.5 11.4 1.

222、6 12.5 Denso Corp 6902 JT JPY 7,330.000 346,168 21.4 13.5 11.2 1.3 1.2 1.2 6.4 1.1 9.2 Continental Ag CON GY EUR 66.700 107,212 11.4 7.1 5.7 1.0 0.9 0.9 9.1 0.4 4.2 Simple Average 42.1 28.1 21.6 5.5 4.7 3.9 12.1 2.5 23.9 Weighted Average 34.7 23.4 18.2 4.4 3.8 3.2 10.4 2.3 19.8 Company Report See th

223、e last page for disclaimer Page 25 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)Other Components&Parts Aac Technologies Holdings In 02018 HK HKD 14.560 17,596 13.9 10.6 8.6 0.7 0.6 0.6 5.0 0.7 4.0 Sunny Optical Tech 02382 HK HKD 107.100 117,473 22.8 17.7

224、 14.7 4.2 3.5 3.0 18.9 2.7 14.5 Smoore International Holding 06969 HK HKD 17.480 104,853 23.4 17.9 14.3 4.0 3.3 2.8 18.5 6.2 21.6 Simple Average 20.0 15.4 12.5 3.0 2.5 2.1 14.1 3.2 13.4 Weighted Average 22.4 17.3 14.0 3.9 3.2 2.7 17.7 4.1 16.8 Overall Average 22.9 16.9 13.5 2.9 2.5 2.1 12.1 1.8 12.7

225、 Overall Weighted Average 22.7 17.0 13.8 3.3 2.8 2.4 14.6 2.0 13.7 Source:Bloomberg.Company Report See the last page for disclaimer Page 26 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)Financial Statements and Ratios Table_IncomeStatement Income Statemen

226、t Year end 31 Dec(RMB m)2020A 2021A 2022F 2023F 2024F Smartphone and PC revenue 48,719 71,632 82,445 92,689 100,329 New intelligent product revenue 9,476 12,445 15,905 18,863 21,617 Automotive intelligent system revenue 1,817 3,770 8,189 13,231 17,660 Medical products and others revenue 13,109 1,210

227、 1,149 1,092 1,037 Total Revenue 73,121 89,057 107,688 125,875 140,644 Cost of revenues(63,492)(83,028)(100,958)(117,189)(130,517)Gross profit 9,629 6,029 6,731 8,685 10,126 Other income and gains 485 657 640 646 713 Government grants and subsidies 392 585 538 629 703 Research and development expens

228、es(2,913)(3,308)(3,769)(4,406)(4,923)Selling and distribution expenses(237)(275)(332)(388)(434)Administrative expenses(673)(1,041)(1,259)(1,472)(1,645)Impairment losses on financial assets 2 8 0 0 0 Loss on disposal of financial assets measured at amortised cost(1)(13)0 0 0 Other expenses(391)(133)(

229、161)(188)(210)Operating Profit 6,292 2,509 2,387 3,507 4,331 Finance costs(71)(43)(39)(42)(45)Profit Before Tax 6,221 2,465 2,349 3,465 4,287 Income Tax(779)(155)(164)(277)(386)Profit After Tax 5,441 2,310 2,184 3,188 3,901 Non-controlling Interest 0 0 0 0 0 Shareholders Profit/Loss 5,441 2,310 2,18

230、4 3,188 3,901 Basic EPS 2.415 1.025 0.969 1.415 1.731 Cash Flow Statement Year end 31 Dec(RMB m)2020A 2021A 2022F 2023F 2024F Profit before tax 6,221 2,465 2,349 3,465 4,287 D&A 2,042 2,557 2,708 2,674 2,642 Change in working capital(4,745)1,137(2,504)(2,842)(1,500)Interest received 50 80 85 81 95 T

231、ax paid(377)(139)(164)(277)(386)Others 18 235 105(15)(66)Cash from Operating Activities 3,209 6,335 2,577 3,085 5,072 CAPEX(2,804)(3,929)(2,303)(2,256)(2,209)Others(177)164(124)(119)(115)Cash from Investing Activities(2,981)(3,764)(2,427)(2,375)(2,325)Change in borrowings 2,008(1,991)0 0 0 Dividend

232、paid(160)(543)(232)(219)(320)Others(278)(664)(39)(42)(45)Cash from Financing Activities 1,570(3,198)(271)(261)(365)Net Changes in Cash 1,799(628)(121)449 2,382 Cash at Beg of Year 1,651 3,466 2,825 2,704 3,153 FX change 16(13)0 0 0 Cash at End of Year 3,466 2,825 2,704 3,153 5,535 Source:the Company

233、,Guotai Junan International.Balance Sheet Year end 31 Dec(RMB m)2020A 2021A 2022F 2023F 2024F PP&E 9,693 11,182 10,951 10,725 10,503 Right-of-use assets 1,202 1,061 952 853 765 Others 1,013 1,303 1,270 1,327 1,387 Total Non-current Assets 11,907 13,545 13,172 12,905 12,655 Inventories 6,891 10,567 1

234、0,769 12,587 14,064 Trade receivables 14,391 9,240 10,769 12,587 14,064 Trade receivable financing 88 2,987 2,688 2,823 2,964 Prepayments and other receivables 1,231 1,657 2,003 2,342 2,616 Cash&Cash Equivalents 3,466 2,825 2,704 3,153 5,535 Others 0 354 369 387 407 Total Current Assets 26,069 27,63

235、0 29,302 33,880 39,650 Total Assets 37,976 41,175 42,474 46,784 52,306 Trade and bills payables 8,146 11,724 10,096 10,547 11,747 Other payables and accruals 4,295 4,176 5,078 5,894 6,565 Borrowings 2,009 0 0 0 0 Others 389 320 358 396 428 Total Current Liabilities 14,840 16,220 15,532 16,837 18,740

236、 Deferred tax liabilities 313 404 424 445 468 Lease liabilities 405 374 381 389 397 Others 147 150 158 165 174 Total Non-current Liabilities 864 928 963 1,000 1,038 Total Liabilities 15,704 17,148 16,495 17,836 19,777 Share capital 4,052 4,052 4,052 4,052 4,052 Reserves 18,220 19,975 21,927 24,896 2

237、8,476 Total Shareholders Equity 22,272 24,027 25,979 28,948 32,528 Minority Interest 0 0 0 0 0 Total Equity 22,272 24,027 25,979 28,948 32,528 Financial Ratios 2020A 2021A 2022F 2023F 2024F Gross profit margin(%)13.2 6.8 6.3 6.9 7.2 Operating profit margin(%)8.6 2.8 2.2 2.8 3.1 Net profit margin(%)7

238、.4 2.6 2.0 2.5 2.8 ROA(%)16.5 5.8 5.2 7.1 7.9 ROE(%)27.7 10.0 8.7 11.6 12.7 Current ratio(x)1.8 1.7 1.9 2.0 2.1 Quick ratio(x)1.3 1.1 1.2 1.3 1.4 Debt to equity ratio(x)12.3 2.1 2.1 2.0 1.9 Net gearing(%)Net Cash Net Cash Net Cash Net Cash Net Cash Company Report See the last page for disclaimer Pag

239、e 27 of 27 3 August 2022 BYD Electronic 比亚迪电子(00285 HK)Table_PageHeader BYD Electronic(00285 HK)Company Rating Definition The Benchmark:Hong Kong Hang Seng Index Time Horizon:6 to 18 months Rating Definition Buy 买入 Relative Performance15%;or the fundamental outlook of the company or sector is favora

240、ble.Accumulate 收集 Relative Performance is 5%to 15%;or the fundamental outlook of the company or sector is favorable.Neutral 中性 Relative Performance is-5%to 5%;or the fundamental outlook of the company or sector is neutral.Reduce 减持 Relative Performance is-5%to-15%;or the fundamental outlook of the c

241、ompany or sector is unfavorable.Sell 卖出 Relative Performance 5%;or the fundamental outlook of the sector is favorable.Neutral 中性 Relative Performance is-5%to 5%;or the fundamental outlook of the sector is neutral.Underperform 跑输大市 Relative Performance-5%;Or the fundamental outlook of the sector is u

242、nfavorable.DISCLOSURE OF INTERESTS(1)The Analysts and their associates do not serve as an officer of the issuer mentioned in this Research Report.(2)The Analysts and their associates do not have any financial interests in relation to the issuer mentioned in this Research Report.(3)Except for SF REIT

243、(02191 HK),JINSHANG BANK(02558 HK),BANKOFZHENGZHOU(06196 HK),XPENG-W(09868 HK),Guotai Junan and its group companies do not hold equal to or more than 1%of the market capitalization of the issuer mentioned in this Research Report.(4)Guotai Junan and its group companies have not had investment banking

244、 relationships with the issuer mentioned in this Research Report within the preceding 12 months.(5)Guotai Junan and its group companies are not making a market in the securities in respect of the issuer mentioned in this Research Report.(6)Guotai Junan and its group companies have not employed an in

245、dividual serving as an officer of the issuer mentioned in this Research Report.There is no officer of the issuer mentioned in this Research Report associated with Guotai Junan and its group companies.DISCLAIMER This Research Report does not constitute an invitation or offer to acquire,purchase or su

246、bscribe for securities by Guotai Junan Securities(Hong Kong)Limited(Guotai Junan).Guotai Junan and its group companies may do business that relates to companies covered in research reports,including investment banking,investment services,etc.(for example,the placing agent,lead manager,sponsor,underw

247、riter or invest proprietarily).Any opinions expressed in this report may differ or be contrary to opinions or investment strategies expressed orally or in written form by sales persons,dealers and other professional executives of Guotai Junan group of companies.Any opinions expressed in this report

248、may differ or be contrary to opinions or investment decisions made by the asset management and investment banking groups of Guotai Junan.Though best effort has been made to ensure the accuracy of the information and data contained in this Research Report,Guotai Junan does not guarantee the accuracy

249、and completeness of the information and data herein.This Research Report may contain some forward-looking estimates and forecasts derived from the assumptions of the future political and economic conditions with inherently unpredictable and mutable situation,so uncertainty may contain.Investors shou

250、ld understand and comprehend the investment objectives and its related risks,and where necessary consult their own financial advisers prior to any investment decision.This Research Report is not directed at,or intended for distribution to or use by,any person or entity who is a citizen or resident o

251、f or located in any jurisdiction where such distribution,publication,availability or use would be contrary to applicable law or regulation or which would subject Guotai Junan and its group companies to any registration or licensing requirement within such jurisdiction.2022 Guotai Junan Securities(Hong Kong)Limited.All Rights Reserved.27/F.,Low Block,Grand Millennium Plaza,181 Queens Road Central,Hong Kong.Tel.:(852)2509-9118 Fax:(852)2509-7793 Website:.hk