We raise TP to RMB59.5 (31% upside) as we are positive on Luxshare into 2H25E, backed by 1) share gains in Apple supply chain, 2) iPhone upgrade cycle in next two years (foldable/curved display in FY26/27E), 3) communication: AI server components to ramp up in 2H25E, 4) automotive: consolidation of Leoni in 3Q25E, and 5) Android ODM: integration synergy and expansion into Android clients’ TAM. For 2Q25, revenue/net profit growth of 23%/23% YoY is in-line with midpoint of prior guidance, and company guided 3Q25 net profit to grow 15-28% YoY with midpoint at RMB 4.5bn (+22% YoY), ahead of consensus estimates. We adjust FY25-27E earnings estimates and lift TP to RMB 59.5, based on rollover 21x FY26E P/E, in-line with past 5-yr hist. fwd. P/E (vs prior 24x FY25E). Luxshare will host an earnings call at 3pm on 27 Aug, and we will look for details on non-Apple business outlook, Android ODM integration, and updates on AI server/auto/robotics segments. Maintain BUY.

2Q25 in-line; Solid growth from communications/auto and iPhone OEM. Luxshare posted 2Q25 revenue/NP growth of 23%/23% YoY, largely in-line with company’s prior guidance. In particular, we are impressed by stronger communications/automotive growth at 49%/82% YoY in 1H25, compared to 12%/14% YoY growth from computer/consumer electronics. 2Q25 GPM came in at 12.0% (vs 11.2% in 1Q25), suggesting improving product mix and enhanced operating efficiency. 2Q25 investment gains of RMB1.78bn (vs RMB1.25bn in 1Q) suggested improving efficiency and pull- in orders for iPhone OEM business ahead of tariff.

3Q25 earnings guidance of 15-28% YoY is encouraging. Luxshare pre- announced 3Q25E earnings growth of 15-28% YoY (midpoint +22% YoY/ +24% QoQ), slightly higher than market consensus. We remain positive on Luxshare’s business outlook in 2025/26E, backed by: 1) iPhone share gains and upgrade cycle in next two years (foldable/curved display in FY26/27E), 2) datacenter/AI server components/OEM (DAC/ACC high-speed cables, transceivers, thermal, power), 3) auto’s tier-1 strategy with domestic/ overseas expansion and consolidation of Leoni AG/Kabel, and 4) Android ODM: integration synergy and expansion into Android clients’ TAM.

Attractive risk/reward at 16.1x FY26 P/E; Reiterate BUY. The stock now trades at 19.0x/16.1x FY25/26E P/E, vs. 29%/18% earnings growth in FY25/26E. We rolled forward our target multiple to FY25E, and our new TP of RMB 59.5 is based on rollover 21x FY26E P/E, in-line with past 5-yr hist. fwd. P/E (vs prior 24x FY25E P/E). Catalysts include iPhone share gains, AI server demand, auto deal consolidation and Apple launch event in early Sept.