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On Wednesday, BYD (SZ:002594) Electronic International Co Ltd (285:HK) (OTC: BYDIF) shares faced a new assessment from Citi, as the firm downgraded the stock from Buy to Neutral and adjusted the price target to HK$45.00 from the previous HK$48.00. The reevaluation by Citi came after the analysts attended BYD Electronic’s results briefing on Sunday, March 25, 2025.
During the briefing, BYD Electronic shared insights into their financial outlook and operational strategies. The company expects its revenue from Android-related products to remain flat, though profitability may rise due to a favorable product mix. On the other hand, revenue from iOS metal casing is projected to be stable or decline slightly, while assembly and cover glass sectors are anticipated to see an increase. Profitability improvements are expected as a result of automation upgrades and efficiency enhancements.
The firm also provided projections for its automotive revenue, forecasting over Rmb30 billion, while revenue from legacy intelligent products should remain stable year-over-year. The data center business revenue is predicted to be between Rmb3 billion and Rmb5 billion. In terms of investment in innovation and infrastructure, BYD Electronic plans to maintain stable year-over-year research and development costs, with capital expenditures ranging between Rmb2 billion and Rmb3 billion, and a slight decrease in depreciation and amortization.
Citi’s analysis indicates that the company’s guidance has not significantly changed since the fourth quarter of 2024. However, the financial institution has reduced its fiscal year 2025 and 2026 earnings projections for BYD Electronic due to margin concerns, which are partially mitigated by increased revenue expectations from the automotive segment. The decision to downgrade the stock rating to Neutral is based on the perspective that the growth for 2025 has already been reflected in the current stock price.
The report also highlighted potential catalysts for BYD Electronic that could influence the stock’s performance in the near future. These include the shipment of H2O NVL16 in April and the launch of Pura 80 in the second quarter of 2025. These upcoming developments could play a significant role in the company’s financial trajectory moving forward.
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