Citibank: Initiates Blue Horizon Technology H-shares with a "buy" rating and a target price of HK$26, preferring H-shares over A-shares in the short term.

Citibank released a report covering BlueFocus Technology's H shares for the first time, giving it a "buy" rating with a target price of 26 Hong Kong dollars. At the same time, Citibank raised the target price of BlueFocus Technology's A shares from 25 yuan to 32 yuan, still based on a P/E ratio of 25.7 times, but using the 2026 earnings per share estimate due to improved visibility on the trend of foldable smartphones. From a valuation perspective, the bank prefers H shares over A shares in the short term. Citibank reiterated that BlueFocus Technology will be a key beneficiary of a foldable iPhone that Apple may introduce in 2026. The bank estimates that this potential foldable iPhone will contribute 5% and 12% of BlueFocus Technology's revenue in 2026 and 2027, respectively. In addition, the company will also benefit from the application of super hard coating technology for front covers, the increase in the value of rear cover materials for thin and light models, and an increase in the share of new iPhone metal middle frame orders in the second half of 2025. In the short term, the demand for replenishing iPhone stocks due to changes in tariff policies is expected to support BlueFocus Technology's profit performance in the second and third quarters of 2025. Citibank expects BlueFocus Technology's non-Apple business to be an important support for market sentiment and long-term growth. With the advancement of Xiaomi's high-end smartphone strategy, as well as new business opportunities in notebook computers and the development of smart retail payment terminal devices, the company's assembly business is expected to continue to grow. Although artificial intelligence smart glasses and humanoid robots are still in emerging business areas, the bank is optimistic about their long-term development potential.