Goldman Sachs has released a research report raising its price target for BYD ELECTRONIC (00285) from HK$21 to HK$22, while maintaining a Sell rating, with the target price based on 10 times the forecast 2027 price-to-earnings ratio.
The investment bank expects BYD ELECTRONIC's revenue growth to recover in 2027, driven by stabilizing smartphone and personal computer demand amid relatively stable memory costs, an upgraded product mix, increased revenue exposure from Apple (AAPL.US) and BYD (01211), as well as expansion into the AI server supply chain, including liquid cooling and power supply segments.
The bank continues to expect the company's gross margin to recover by 2028.
Goldman Sachs noted that end demand remains relatively modest amid elevated memory costs.
The bank has incorporated AI computing infrastructure into its forecasts to reflect the company's expansion into the AI data center sector, while simultaneously lowering its consumer electronics revenue estimates, correspondingly cutting BYD ELECTRONIC's net profit forecasts for 2026 to 2028 by 40%, 3%, and 32%, respectively.
The bank still anticipates that net profit in the second half of 2026 will grow 24% compared to the first half, mainly due to stabilizing memory costs expected to drive improvement in electric vehicle and consumer electronics end demand, combined with better seasonal performance and the launch of more flagship models.
Comments