Beijing-based investment firm China Renaissance has initiated coverage on Apple with a Buy rating. Analyst Jason Sun writes that Apple’s hardware business is still a cash cow given the company’s leading position in the high-end market with the iPhone and revenue is still stable in the iPad and Mac segments.
Sun sees other revenue potential from wearable and services products outside of AirPods and the Apple Watch.
Apple is expected to launch its AR Glass early next year, further diluting the revenue contribution from the traditional hardware business. Meanwhile, unlike major Chinese peers whose services revenue is largely reliant on advertising and games, we believe Apple’s services revenue generation base is more stable and diversified. With a steadily growing user base and large upside potential on ARPU given the diversified sources, we expect services to be a strengthening pillar of growth for Apple — China Renaissance analyst Jason Sun
MacDailyNews Note: China Renaissance’s price target on Apple is $342.