Huatai Securities raised the target price of BYD ELECTRONIC to 61.8 yuan, with long-term growth of liquid cooling products potentially bringing new momentum

Huatai Securities' research report points out that BYD Electronic (00285.HK), as a platform-based high-end manufacturing enterprise, has achieved rapid growth in revenue and profit driven by the mobile phone business of its North American major clients and the automotive product business of its parent company from 2020 to 2024.

Looking ahead to the second half of this year, Huatai Securities believes that "the North American major client's mobile phone mid-frame + the parent company's automotive business" will still be the main source of BYD Electronic's performance growth. However, the continuous advancement of data center AI server assembly business and the rollout of liquid cooling products (or starting shipments in the second half of the year) may bring new momentum for the company's medium to long-term growth.

Huatai Securities has raised BYD Electronic's target price from the previous HKD 40.3 to HKD 61.8; considering the current valuation is attractive (equivalent to a forecasted 2025 price-to-earnings ratio of 14.7 times), it maintains a "Buy" rating; and maintains the company's net profit forecast attributable to the parent for 2025 to 2027 at RMB 5.03 billion, RMB 6.07 billion, and RMB 6.94 billion