MarketWatch columnist Jennifer Booton wrote an article today that Apple announced a special press conference scheduled to be held on March 9, which may be the purpose of building momentum for the upcoming Apple Watch, which is also the first new product developed by the company under the leadership of Cook.
Goldman Sachs released a research report on the electronic components industry, saying that as the listing of new Apple products such as smartwatches approaches, the market will set off a new round of hype enthusiasm, and Apple concept stocks are expected to continue to strengthen. Apple parts suppliers and companies that supply iPhones and Apple Watches at the same time will perform better. Among Apple concept stocks, Goldman Sachs is the most optimistic about Luxshare Precision and put it on the strong buy list.
Goldman Sachs pointed out that Apple had previously stated that Apple Watch will be available in April, and the market generally expects that Apple will introduce more features of this smartwatch in detail at the event on March 9.
At the Goldman Sachs Technology and Internet Industry Conference held in San Francisco from February 10 to 12 this year, Apple CEO Tim Cook explained the company's strategy, innovation and sustainable growth opportunities. In his speech, Cook focused on Apple watches and their significance.
Cook noted that Apple watches will be the driving force for wearable devices. The current smartwatch market is compared with the MP3 player market before the iPod and the tablet market before the iPad. The current smartwatch products have limited impact. He believes that Apple watches will be the driving force that makes smartwatches affect people’s lifestyles, and believes that people will be amazed at how wide the device is used. It also mentioned that some functions include built-in Siri, turning wrist activation and exercise. In addition, Goldman Sachs expects extensive developer support to be the main differentiator.
In addition, Cook pointed out that Apple payments are expanding faster than expected, accounting for two-thirds of the amount of contactless payments in the United States. The retailers' installation speed is surprisingly fast, especially during the intensive holiday season at the end of 2014. Privacy remains a key factor in the service, as Apple Pay neither collects consumer transaction data nor shares consumer credit cards with merchants. Apple said it has no interest in monetizing user data like other mobile competitors do. Cook believes that over time, consumers will ultimately not only appreciate this privacy, but need such services.
Goldman Sachs believes that as Cook has mentioned many times in the past, Apple wants to create the best products, not the most and believes that by making great products, demand will follow.
The bank pointed out that as new Apple products such as smartwatches approach the market will surely set off a new round of hype enthusiasm, and Apple concept stocks are expected to continue to strengthen.
Among the Apple concept stocks covered by Goldman Sachs, Luxshare Precision is the most optimistic about Luxshare Precision, and the stock is on its strong buy list. The bank believes that the company is expected to achieve strong profit growth in the short-term and medium-term with its business strength. The reason for optimism is based on the following three points:
1. Its good customer base and excellent past performance should make the company lower in the $55 billion global connector market.
2. The company began to become the main supplier of Apple's full product input/output connectors in the second half of 2014;
Luxshare Precision has frequently received Apple's large orders
3. The company is committed to participating in the supply chain of major wearable products of the world's leading consumer electronics customers, and plans to penetrate into the high-margin automotive electronics business.
Goldman Sachs pointed out that given Luxshare Precision's wide range of products, it is expected that the company will face a number of driving factors in 2015:
1. The profit performance is particularly strong. According to estimates, the year-on-year profit growth rate of its 2014/15/15 year-on-year profits were 93%/98%/65% respectively.
2. Goldman Sachs expects Apple watches to be launched in early 2015 will become an important driving force for profit in 2015. Now that Apple’s press conference is approaching, Apple watches are about to come out, Luxshare Precision is expected to continue to strengthen.
Goldman Sachs expects Apple's related business to contribute to revenue
3. The Type-C fast charging cable will be gradually configured on flagship products of major domestic smartphone brands, and major notebook brands around the world are also expected to adopt the Type-C interface.
4. The company is penetrating new customers and products in the communications and automotive industries, which may give the market more confidence in Luxshare Precision's potential in these new areas.
Goldman Sachs gave it a 32-fold expected price-to-earnings ratio for 2015, corresponding to a 12-month target price of RMB 42.0.
