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Goldman Sachs reiterates Buy rating on BYD Electronic stock as Apple partnership drives growth

EditorAhmed Abdulazez Abdulkadir
Published 12/30/2024, 06:13 AM
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On Monday, Goldman Sachs updated its financial outlook for BYD (SZ:002594) Electronic International Co Ltd (285:HK) (OTC: BYDIF), with a significant price target increase to HK$51.02 from the previous HK$44.64, while reaffirming a Buy rating on the stock. The adjustment reflects the firm's confidence in BYD Electronic's growth trajectory, driven by its strategic focus on leading brand customers in both consumer electronics and automotive electronics sectors.

Goldman Sachs analysts highlighted BYD Electronic's relationship with Apple (NASDAQ:AAPL) as a key factor for the positive outlook. The company's role in providing components for Apple's iPad and iPhone lines is expected to bolster its market share. The recent completion of the Jabil consolidation in late 2023, which enabled BYD Electronic to supply metal middle frames for iPhones, is seen as a move that will expand its component business and offer more comprehensive solutions to its customers.

Looking ahead to 2024, the analysts anticipate improved efficiency following the consolidation, which should further enhance BYD Electronic's competitive edge in the consumer electronics space. The firm's automotive electronics division is also poised for growth, benefiting from the success of its parent company, BYD, a leader in China's electric vehicle (EV) market.

BYD's adoption of advanced features like smart driving is expected to have a positive impact on BYD Electronic's offerings, which include a range of products from infotainment systems to advanced driver-assistance systems (ADAS).

The launch of BYD's city navigation on autopilot (CNOA) across China on December 24 further reinforces Goldman Sachs' optimistic stance on BYD Electronic's prospects in the automotive electronics domain. The analysts believe that the fierce competition in both consumer electronics and the China EV market will lead to industry consolidation, from which BYD Electronic is well-positioned to benefit due to its focus on serving industry leaders.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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