[ET Net News Agency, 6 April 2018] Morgan Stanley chopped its target price for BYD
Electronics (00285) to HK$10 from HK$24, and its rating to "underweight" from
"equal-weight".
The research house sees increasing pricing pressure for metal casing. Its checks suggest
ASP for Samsung Galaxy S9 casing could have come down YoY, coupled with potential volume
decline compared to the S8. BYDE made some progress at Huawei, but Morgan believes ASP
could have come down YoY as well.
Morgan lowered metal casing revenue estimates as it lowered metal casing ASP estimates,
due to increasing competition. It also lowered volume forecasts for Samsung, as it
believes volume for S9 could be worse than S8, and BYDE could lose share if Samsung
switches more allocation to Vietnam.
Morgan lowered its earnings estimates 29% for 2018, and 33% for 2019. This mainly
reflects a lower metal casing ASP and thus lower metal casing revenue. (KL)