Resilient 3Q23 despite macro headwinds;Positive outlook for auto and comm. business

（以下内容从招银国际《Resilient 3Q23 despite macro headwinds;Positive outlook for auto and comm. business》研报附件原文摘录）
立讯精密(002475)
Luxshare posted 3Q23 revenue/NP growth of -8.5%/+15.4% YoY, and preannounced FY23E earnings growth of 17.5-22.5% YoY, implying 31% YoY in4Q23E. 3Q23 earnings was largely in-line with the profit alert earlier, whileweaker 3Q revenue was mainly due to 1) structural changes of communicationsproduct portfolio, 2) lack of wearables product launches, 3) SiP products deliverychanges, 4) weaker Mini-LED sales, and 5) customer inventory corrections.Looking forward, despite ongoing macro headwinds, we believe that Luxshareis well-positioned to benefit from gain share in iPhone/MacBook/iPad/WatchOEM/components, and capture opportunities in automobile tier-1 and comm.businesses. We adjusted FY23-24E EPS by -4/-2% to factor in 3Q23 resultsand better margin. The stock now trades at 20.4/16.2x FY23/24E P/E, close to1-SD below 5-yr average P/E. Maintain BUY with new TP of RMB46.96 basedon rollover 24x FY24E P/E.
3Q23 mostly in-line; Weaker topline due to inventory correction, SiPdelivery changes, and slower wearables/Mini-LED. Despite weaksmartphone/CE demand, Luxshare delivered a solid 3Q23 with NP growthof 15.4% YoY. Mgmt. attributed 3Q revenue decline to inventory correction,SiP delivery changes, and product portfolio optimization in comm. segmentand weaker wearables/mini-LED sales. Backed by better revenue mix, GPMimproved YoY/QoQ to 13.8% in 3Q23 (vs. 10.0%/11.3% in 1Q/2Q23).
FY23 Outlook: multiple product share gain and accelerated auto/commsegments. Luxshare pre-announced FY23E net income growth at 17.5-22.5% YoY, implying 31% YoY in 4Q23 (vs 15% in 3Q). We believe strongerearnings in 4Q23 was a result of Luxshare’s share gain in top module/smartphone OEM biz and higher share allocation of high-end models. Inaddition, comm./auto tier-1 business are poised to deliver solid growth andbetter margins with order wins and product portfolio expansion in FY24/25E.
Attractive risk/reward; Reiterate BUY. We believe Luxshare’s operatingefficiency will continue to improve with economies of scale in iPhone/MacBook/iPad OEM/components, and growth momentum in auto tier-1business and communications segment will boost revenue upside inFY24/25E. We slightly adjusted FY23-25E EPS to reflect 3Q23 results andbetter profitability. The stock now trades at 20.4/16.2x FY23/24E P/E, closeto 1-SD below 5-year hist. avg P/E. Reiterate BUY with new TP of RMB46.96 based on rollover 24x FY24E P/E. Catalysts include top module/iPhone share gain and comm./auto tier-1 business progress.