Apple (AAPL.US) achieved steady growth in FY24Q4 revenue, and profits declined due to tax reimbursement. Sales of the 16 series were superior to the same period last year, and iPhone revenue growth resumed.
The Zhitong Finance App learned that Ping An Securities released a research report saying that Apple (AAPL.US) achieved steady growth in FY24Q4 revenue; in a single fiscal quarter, it achieved net profit of 14.7 billion US dollars, -36% year over year. The reason for the decline in net profit was mainly due to the company's inclusion of 10.2 billion US dollars in one-time income tax expenses, which were used to resolve the company's long-term tax-related cases in Ireland. In terms of sales of various products, the iPhone 15 series sold better than last year's 14 series. The iPhone 16 series also performed well, jointly supporting the iPhone business to achieve revenue growth. Since the iPad Pro and Air models newly released this year filled the demand accumulated by not updating new products last year, the iPad business became the fastest growing hardware segment in the single fiscal quarter.
The main views of Ping An Securities are as follows:
Incident: Recently, Apple released its FY24Q4 financial report as of September 28, 2024. The company achieved operating income of 94.9 billion US dollars, +6.1% year-on-year, and realized net profit of 14.7 billion US dollars, or -36% year-on-year.
Revenue achieved steady growth, and profits declined due to tax reimbursement.
In fiscal year 2024, the company achieved revenue of 391 billion US dollars, +2.02% year-on-year, and realized net profit of 93.736 billion US dollars, -3.36% year-on-year, gross margin of 46.21%, an increase of 2.08 pcts over fiscal year 2023. The net interest rate was 23.97%, a decrease of 1.34 pcts compared to fiscal year 2023. Looking at the single fiscal quarter, FY24Q4 achieved operating income of 94.9 billion US dollars, +6.1% year on year, and realized net profit of 14.7 billion US dollars, -36% year over year. The reason for the decline in net profit was mainly due to the company's inclusion of 10.2 billion US dollars in one-time income tax expenses, which were used to resolve the company's long-term tax-related cases in Ireland. In terms of profit margin, FY24Q4's gross margin reached 46.22%, +1.05 pcts year on year, -0.04 pcts month on month, net margin reached 15.52%, -10.13 pcts year on year, and -9.48 pcts month on month.
Sales of the 16 series were superior to the same period last year, and iPhone revenue growth resumed.
By business, FY24Q4's total hardware business revenue reached 66.96 billion US dollars, +4.1% year over year, and service business revenue reached 24.97 billion US dollars, +11.9% year over year. Looking at specific products in the hardware business, FY24Q4's iPhone/Mac/iPad/other product revenue was 462/7.7/7/9 billion US dollars respectively, corresponding year-on-year growth rates were +5.5%/+1.7%/+7.9%/-3%, respectively. Among them, the iPhone 15 series's sales performance was superior to last year's 14 series, and sales of the new iPhone 16 series also performed well, jointly supporting the iPhone business to achieve revenue growth. The overall performance of the Mac business was relatively stable, and the iPad business became the fastest growing hardware segment in a single fiscal quarter because the new iPad Pro and Air models released this year filled the demand accumulated by the iPad Pro and Air models that were not updated last year.
Revenue in many regions hit new highs in the fourth fiscal quarter, and the decline in revenue in Greater China narrowed quarter by quarter.
By region, revenue from the Americas/Europe/Greater China/Japan/Asia Pacific region was 416.6/249.2/15.03/5.93/7.38 billion US dollars, corresponding to year-on-year growth rates of +3.9%/+11.0%/-0.3%/+7.6%/+16.6%, respectively. Among them, revenue from America, Europe and the rest of the Asia-Pacific region hit new quarterly highs in the fourth fiscal quarter. Although Greater China was the only market where the company's revenue declined, the decline narrowed from quarter to quarter.
Thanks to Apple Intelligence, iOS 18.1 upgrades far faster than iOS 17.1.
Recently, Apple announced the official iOS 18.1, iPadOS 18.1, and macOS Sequoia 15.1 system updates to users. Apple Intelligence related functions were officially launched simultaneously, supporting functions including AI writing assistants and intelligent album search. Thanks to related AI functions, iOS 18.1's user upgrade rate is twice that of iOS 17.1 in the same period last year, and iOS 18.2 plans will be released at the end of 2024, and it is expected that a similar Image Playground will be launched at that time Wait for more new tools. At the same time, Apple has also updated new products such as Macbook Pro, Mac mini, and iMac equipped with M4 series chips.
Investment advice: Currently, Apple continues to increase investment in AI, and both software and hardware are working together. Combined with Apple's strong brand influence and ecosystem, it is expected to be the first to start a wave of AI terminal switching. Considering AI's high standards for performance and quality of terminal product components, related parts are expected to see an increase in stand-alone value, and related industry chain companies are expected to continue to benefit. It is recommended to focus on Lixun Precision (002475.SZ), Goertek (002241.SZ), Lansi Technology (300433.SZ), Lingyi Intelligent Manufacturing (002600.SZ), Dongshan Precision (002384.SZ), Pengding Holdings (002938.SZ), Zhuhai Guanyu (688772.SH), Xinwei Communications (3006.SZ) etc. Industrial chain company.
Risk warning:
1) Product technology update risk: The electronics industry is rapidly upgrading product technology, and new technologies and new processes are constantly emerging. If the company is unable to continuously update market-competitive products, it will weaken the company's competitive advantage.
2) Risk of macroeconomic fluctuations: If the growth rate of the global economy slows down, market demand will inevitably slow down or even shrink. Global consumer electronics demand declines, and the recovery of the consumer electronics industry is expected to fall short of expectations.
3) Trade friction risk: If trade protection policies are introduced in various regions, it may have an impact on the performance of relevant companies.
