We raise TP to RMB75.55 (25% upside) to reflect our more positive view on iPhone 17/ foldable cycle, stronger synergy from Leoni/ODM integration, and AI server component pipeline (connectivity/thermal/power). We raise FY25-27E EPS by 0-19% to reflect FY25 guidance, enhanced synergy and better margin. We expect Luxshare to deliver 27% earnings CAGR over 2025-27E, driven by 9%/54%/47% FY25-27E revenue CAGR from consumer electronics/automotive/ communication segments. Trading at 25x/20x FY25/26E P/E after recent pullback, valuation is attractive in our view. Upcoming catalysts include iPhone 17 shipment, auto client wins, and AI server component ramp-up.

Beneficiary of Apple multi-product upgrade cycle. With a full coverage of Apple’s products (iPhone/Watch/AirPods/Mac/VisionPro), we believe Luxshare is well-positioned to benefit from strong execution and market share gains from Apple’s new product cycle in iPhone 17/foldable/20th anniversary edition and smart home/AI glasses during 2026-27E

Synergies from consolidation of Leoni and Wingtech's ODM. Mgmt. highlighted that the integration process has exceeded expectations: 1) original targets for Leoni (e.g. NP breakeven in 2025, GPM to reach corp. avg.) will be achieved at least one year earlier, and 2) vertical integration with Wingtech ODM will enhance competitiveness and boost exposure to non-Apple biz, particularly in PC segment targeting doubled sales over next three years.

Strong AI server product pipeline. We believe Luxshare is making progress with design wins and share gains with core AI server products (high-speed connectivity/power/thermal). In particular, mgmt. remains confident that CPC will become mainstream connectivity solution in near term, and AC/DC products have achieved breakthrough with core customers.

Upbeat FY25E guidance on iPhone 17 and better GPM. Luxshare guided FY25E NP growth of 24-29% YoY, mainly driven by new iPhone models and better profitability from Leoni and Wingtech assets. 3Q25 GPM at 12.8% (+1.1ppt YoY/0.8ppt QoQ) was a positive surprise, thanks to higher-margin auto/communications segments and strong execution of new acquisitions.

Multiple growth engines to drive re-rating; Raise TP to RMB75.55 We believe revenue mix shift to higher-growth, high-margin AI/auto segments along with stronger Apple upgrade cycle will boost re-rating. We raise our TP to RMB75.55, based on 10-year hist. avg. 25x FY26E P/E (vs prior 21x) for Apple cycle strength and strong execution of Leoni/ODM integrations.