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<Research>CLSA: Mideast Clients May Turn to CN Electronic Products; BYD Electronics, AAC, Xiaomi, Cowell Preferred
Recommend 75 Positive 142 Negative 51 |
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The walkie-talkie explosions in Lebanon may prompt some Middle Eastern countries to switch to mainland China for manufacturing electronic equipment, CLSA released a report as commenting. Mainland electronics companies with factories in the mainland may benefit. In the technology sector in the mainland and Hong Kong, the broker thought that separate concerns on both the Android and Apple sides have been largely priced in, and the valuations of some stocks have reached very attractive levels. The broker’s top picks for H-shares were BYD ELECTRONIC (00285.HK), AAC TECH (02018.HK), XIAOMI-W (01810.HK) and COWELL (01415.HK). For BYD Electronics, the continued growing EV business from its parent company, BYD COMPANY (01211.HK), could serve as a sustainable growth driver for the company. The company charted a YoY decline in net profit in 2Q24, mainly due to the base effect of the same period last year. As the base in 3Q23 is still high and the production of metal casings for iPhones is still accelerating, it is expected that the company's net profit will record a YoY decline in 3Q24, and growth will turn positive in 4Q24. The broker gave the stock an Outperform rating with a target price of $38.4. As for AAC, the broker said that the company is on track to achieve its profit growth, on the ride of a reduction in losses in the optical business, organic growth from Apple and growth in the automotive acoustics business. The broker rated the stock Outperform with a target price of $38.6. In addition, the broker also mentioned that most investors have stopped worrying about the gross profit of Xiaomi's smartphones and are now concerned about the new models of Xiaomi's EVs and the company's plan to expand its EV production capacity after 2026. The broker rated the stock as Outperform and had a target price of $24.5. AAStocks Financial News |
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