BYDE reported FY20 revenue/net profit growth of 38%/241% YoY. Earnings was in-line given stronger GPM, and revenue was 4%/7% below our/consensus estimate, due to weaker casing (Huawei) and mask demand in 4Q20. Looking into 2021, we remain positive on BYDE as the major beneficiary of industry consolidation and Apple/ Xiaomi’s supplier diversification strategy. We slightly adjusted our EPS to reflect lower mask demand, e-cigarette sales and higher share gain from Xiaomi/iPad. Our new SOTP-based TP of HK$56.2 implies 17.9x FY21E P/E. Reiterate Buy.
- Results inline despite weaker mask and casing in 4Q20. 4Q net profit jumped 94% YoY while revenue grew 48% YoY, slightly below our estimates, mainly due to short-term impact from Huawei ban and weaker mask sales on easing COVID-19. Looking ahead, mgmt. targets to achieve RMB100bn revenue in FY21E, thanks to 1) Android demand recovery, 2) share gain in metal/glass front cover, 3) Apple’s iPad OEM share gain, and 4) Apple’s watch/NB/pad component ramp. Mgmt. believes Xiaomi and Honor will become major drivers from Android clients in 2021.
- Apple: Share gain in iPad/Watch EMS/components. Mgmt. expects Apple will become BYDE’s largest customer in FY21E (30% of sales). We believe BYDE will expand its iPad share allocation to 30-40% in 2021 (vs 20-30% for one model in FY20, and we estimate Apple revenue will jump 3 times in FY21E. As we believe Apple will continue to diversify component suppliers, we expect BYDE to gain share in iPhone/Watch ceramic products and also penetrate into iPad metal casing and front glass. We forecast Apple revenue will reach RMB50bn in FY23E.
- Our FY21/22E EPS are 18%/13% above consensus; Reiterate BUY. We remain positive on BYDE’s product roadmap, share gain in major brands and expansion into medical segment. We revised our SOTP-based TP to HK$56.2 to reflect weaker mask demand but higher sales from Apple and medical segment. Our TP implies an undemanding valuation of 17.9x FY21E P/E. Catalysts include faster share gain, stronger mask and Xiaomi/Apple product launches.
