Investment Rating - The report maintains a "BUY" rating for FIT Hon Teng, with a target price (TP) raised to HK$4.24 based on a rolled-over 13x FY25E P/E, up from the previous 11x P/E [2][13]. Core Insights - FIT Hon Teng has announced a positive profit alert for 1H24, projecting earnings between US$28-33 million, a significant recovery from a net loss of US$9 million in 1H23, primarily driven by stronger demand in the computing and networking segments [2][7]. - The stock price has faced pressure due to concerns regarding the pace of earnings recovery in 2024 and increased operating expenses (OPEX) related to AirPods and Voltaira businesses. However, the report suggests that the recent stock correction is overdone, and the company is expected to benefit from multiple product launches and operating leverage in the second half of 2024 [2][8]. - The management has maintained a core operating profit margin (OPM) estimate of 5.5% for FY24, up from 4.9% in 2023, indicating improved operational efficiency [2][7]. Financial Summary - Revenue is projected to grow from US$4,196 million in FY23 to US$5,108 million in FY24, reflecting a year-on-year growth of 21.8%. This growth is expected to continue, reaching US$6,332 million in FY25 and US$7,497 million in FY26 [3][16]. - Net profit is forecasted to rebound significantly, from US$131.8 million in FY23 to US$194.3 million in FY24, representing a 47.4% year-on-year increase. The net profit is expected to further rise to US$298.3 million in FY25 and US$373.4 million in FY26 [3][16]. - The report revises FY25 and FY26 EPS estimates upward by 12% and 10%, respectively, reflecting stronger demand for AI servers and progress in AirPods production [2][8]. Market Outlook - The management has expressed optimism regarding the outlook for FY24, driven by recovery in the PC market, networking demand, and AirPods shipments. The company anticipates a 48% and 54% year-on-year increase in net profit for FY24 and FY25, respectively [2][8]. - Near-term catalysts include the progress of AirPods shipments, potential auto mergers and acquisitions, and updates on AI server products, which are expected to enhance earnings visibility [2][13].

2024 年 7 月 9 日 CMB 国际全球市场 | 股票研究 | 公司更新 FIT Hon Teng ( 6088 香港 ) 股票压力过头了 ; 提高对 AirPods / AI 服务器上涨的预 期 FIT Ho Teg 宣布 2016 年上半年收益为 28 - 3, 300 万美元 ( 而上半年为 900 万美元的净亏 损 ),主要是由更强大的计算 ( PC ) / 网络 ( 服务器 ) 部门和更好的运营效率推动。然 而,股价受到 2024 年盈利复苏速度以及 AirPods 和 Voltaira 业务更高 OPEX 的质疑的压力 。我们是疲软的买家,考虑到下半年的 2H24E 有多个产品发布和 2H24E 的运营杠杆。我们 将 FY25 / 26E 每股收益估计上调 12% / 10%,以反映更好的 AI 服务器需求和 AirPods 进展 。我们将 TP 上调至 4.24 港元,基于 2012 财年的 13 倍市盈率 ( 与之前的 11 倍市盈率相比 ),用于多产品周期和更高的收益可见性。我们认为,最近的股票调整过度了。重申购买。 在更强劲的 PC / 服务器需求下 , 1H24 的积极警报 , 但 ...

FIT Hon Teng ( 6088 香港 ) CMBI Corp Day 外卖 : FY24 / 25E 中 AI 服务器 , AI PC / 电话 和 AirPods 的多个增长动力 我们于 6 月 25 日在 CMBI 技术公司日主持了 FIT Ho Teg ( FIT ) 。在 6 月初 Comptex 和 WWDC 后上涨 50 % 之后,投资者对 1 ) 2025 年下半年 AI 服务器上涨,2 ) 越南 / 印度 AirPods 增加,3 ) 新的 EV 合资企业和机会,以及 4 ) AI PC / 电话周期表示强烈兴趣。管 理。在智能手机 / 网络领域,2Q24 版本 / GPM 指导有望实现上行潜力。总体而言,我们对 FIT 在 FY24 / 25E 的多个增长动力 ( AI 服务器连接器,AirPods,EV 业务 ) 持积极态度, 并预计 AI 服务器内容价值,一般服务器恢复和 AI PC / 智能手机的上升周期将进一步上升。 在审查 TP 的情况下保持买入。 | | | | | | | | | | |------------------------------------------ ...

Investment Rating - The report maintains a "BUY" rating for FIT Hon Teng with the target price currently under review [2][9][10]. Core Insights - The company is expected to benefit from multiple growth drivers in FY24/25, including AI server connectors, AirPods production ramp-up, and new opportunities in the electric vehicle (EV) sector [2][9]. - Management has indicated that revenue and gross profit margin (GPM) guidance for Q2 2024 is on track, with potential upside in the smartphone and networking segments [2][9]. - The report highlights a positive outlook for the iPhone replacement cycle and potential order wins in AI server connectivity, which could significantly enhance revenue in the networking segment [2][9]. Revenue and Profit Forecasts - Revenue is projected to grow from US$4,196 million in FY23 to US$4,715 million in FY24, representing a year-over-year growth of 12.4% [3][12]. - Net profit is expected to increase from US$132 million in FY23 to US$200 million in FY24, reflecting a growth rate of 51.5% [3][12]. - The earnings per share (EPS) is forecasted to rise from 2.81 cents in FY23 to 3.73 cents in FY24 [3][12]. Growth Drivers - Key growth drivers identified for 2025 include AirPods, AI server connectors/cables, and the auto business, particularly through a new joint venture in the EV charger market [2][9]. - The company is expected to ramp up production in Vietnam and India for AirPods, with management anticipating six additional production lines in India by 2025 [2][9]. Valuation Metrics - The company is trading at a price-to-earnings (P/E) ratio of 14.3x for FY24 and 10.8x for FY25, which is considered attractive given the expected EPS growth of 51% and 33% for FY24 and FY25, respectively [2][9][10]. - The report notes that the valuation remains appealing compared to the anticipated recovery in the AI server and smartphone markets [2][9].

Investment Rating - The report maintains a "Buy" rating for FIT Hon Teng with a target price of HK$2.42 [1][2] - The target price is based on a 12.5x P/E ratio for 2024, reflecting the company's growth prospects and historical valuation levels [1] Core Views - FIT Hon Teng's Q1 2024 performance met expectations, with revenue increasing by 12.0% YoY to USD 965 million and gross margin improving by 4.5 percentage points to 20.3% [1] - The company's TWS business for a major North American customer is expected to see incremental growth in H2 2024 and accelerate in 2025 [1] - The first Airpods production line in Vietnam began shipments in Q1 2024, with the business expected to contribute 5%-7% of total revenue in 2024 [1] - The company plans to add 6 more production lines in India by 2025, leading to a surge in capacity and revenue growth [1] - Management expects double-digit revenue growth for 2024, with gross margin stabilizing around 20% and operating profit increasing significantly [1] - The company aims to reduce its three major operating expenses to below 13% by 2025 (from 14.4% in 2023) [1] - Revenue from electric vehicles, next-gen 5G AIoT, and acoustic businesses is expected to reach 30% in 2024 and 40% in 2025 [1] Financial Performance - Q1 2024 revenue breakdown: Smartphones (USD 202 million, -10.2% YoY), Network Infrastructure (USD 114 million, +8.6% YoY), PC & Consumer Electronics (USD 180 million, +5.9% YoY), Electric Vehicles (USD 116 million, +205.3% YoY), and System Terminal Products (USD 296 million, +6.9% YoY) [6] - Net profit for Q1 2024 was USD 10.2 million, compared to a net loss of USD 9.3 million in Q1 2023 [6] - Forecasted EPS for 2024-2026: USD 0.025, USD 0.034, and USD 0.042, respectively [1][5] Strategic Initiatives - The company's "3+3" strategy focuses on electric vehicles, 5G AIoT, and acoustic products, with electric vehicle business expected to be a strong growth driver [7] - The company is well-positioned to benefit from the AI-driven data center construction boom, with products like EDSFF connectors, MCIO, MXIO, and PCIE 6.0-compatible cables expected to drive growth in the network infrastructure segment [6] Market Opportunities - The company is targeting opportunities in the USD 1.7 billion server connector and cable market, with plans to mass-produce AI-related products in H2 2024 [6] - The Airpods business is expected to capture over 30% market share in the future [1]

Investment Rating - The investment rating for FIT Hon Teng is maintained as "Buy" with a target price (TP) set at HK$2.42, corresponding to a 12.5x 2024 price-to-earnings ratio (PER) [2][3][7]. Core Insights - FIT Hon Teng's 1Q2024 results were in line with expectations, showing a revenue increase of 12.0% year-over-year (yoy) to US$965 million, with a gross profit margin improvement of 4.5 percentage points yoy to 20.3% [2][8]. - The company anticipates a ramp-up in its True Wireless Stereo (TWS) business for major customers in North America in the second half of 2024, with significant growth expected in 2025 [2][10]. - The management projects a double-digit revenue growth for the full year 2024, with gross margins stabilizing around 20% and a significant increase in operating profit [10][11]. Financial Performance - In 1Q2024, the gross profit increased by 44% yoy, and shareholders' net profit reached US$10 million, compared to a net loss of US$9 million in 1Q2023 [2][8]. - Forecasted earnings per share (EPS) for 2024, 2025, and 2026 are US$0.025, US$0.034, and US$0.042, respectively [2][7]. - The revenue mix from Electric Vehicle (EV) Mobility, new Generation 5G AIoT, and Audio is expected to reach 30% in 2024 and 40% in 2025 [11]. Strategic Initiatives - The company is implementing a "3+3" strategy focusing on the development of EVs, 5G AIoT, and acoustics, which is expected to drive growth [11]. - FIT Hon Teng plans to expand its production capacity significantly, including the addition of six more production lines in India by 2025 [2][10]. - The management is optimistic about capturing opportunities in the US$1.7 billion server connector and cable market, with plans to mass-produce AI-related products in the second half of 2024 [9][10].

Investment Rating - The report maintains a "Buy" rating for FIT Hon Teng with a target price of HKD 2.40, reflecting a 23.1% upside from the current price of HKD 1.95 [2][10]. Core Insights - FIT Hon Teng reported a solid Q1 performance, aligning with positive profit warnings and management expectations. The company reiterated its FY24E guidance, projecting a year-over-year revenue decline in the low double digits, a gross profit margin (GPM) increase, and an operating profit margin (OPM) of 5.5% [1][10]. - The recent stock adjustment is viewed as profit-taking after a 101% increase over the past three months, with an optimistic outlook for 2H24E driven by growth in AirPods, integration of Voltaira's automotive electronics business, and successful orders for AI server/network products [1][10]. Financial Performance Summary - Q1 revenue reached USD 965.06 million, a 12% year-over-year increase, with a net profit of USD 10.2 million, compared to a loss of USD 9.3 million in Q1 of the previous year. This performance was supported by a recovery in the PC/server market and strong results from the Voltaira business [1][5]. - The GPM improved by 450 basis points year-over-year to 20.3%. The electric vehicle (EV) segment saw a remarkable 205% year-over-year growth, while the computing segment grew by 6% and the networking segment by 9% [1][5]. Revenue and Profit Forecasts - For FY24E, revenue is expected to rebound by 12% year-over-year, with net profit projected to increase by 52%. The FY24E earnings per share (EPS) is estimated at USD 2.81, with subsequent years showing continued growth [1][6][9]. - The report indicates that the FY24E revenue forecast remains unchanged at USD 4.715 billion, with gross profit expected to be USD 984 million, maintaining a GPM of 20.9% [8][9]. Market Opportunities - The management highlighted a significant opportunity in AI servers, with expected revenue contribution of 7-9% in FY24E, up from 1% in FY23. The anticipated value per compute tray is estimated between USD 500 and USD 1,000 [1][6]. - The integration of Voltaira's automotive electronics is expected to contribute positively to revenue growth, alongside the anticipated increase in AirPods shipments and enhancements in AI server product offerings [1][10].

Investment Rating - FIT Hon Teng maintains a BUY rating with a new target price of HK$2 40 based on 11x FY24E P/E [2][13] Core View - FIT Hon Teng's 1Q24 results were in line with expectations driven by recovery in PC/server markets solid Voltaira business and strong Networking segment [2] - The company is expected to benefit from AirPods ramp-up integration of Voltaira auto electronics business and AI server/networking products in 2H24E [2] - Revenue and net profit are forecasted to rebound 12% and 52% YoY respectively in FY24E [2] - The stock's recent correction is attributed to profit-taking after a 101% rally in the past three months [2] Financial Performance - 1Q24 revenue reached US$965mn a 12% YoY increase while net profit was US$10 2mn compared to a loss of US$9 3mn in 1Q23 [2] - Gross profit margin improved by 450bps YoY to 20 3% due to a better product mix [2] - EV segment revenue surged 205% YoY driven by the Voltaira merger while Computing and Networking segments grew 6% and 9% YoY respectively [2] - FY24E revenue is projected at US$4 715mn with a 12 4% YoY growth and net profit is expected to reach US$199 6mn a 51 4% YoY increase [3][9] Segment Analysis - EV Mobility segment revenue jumped 205% YoY in 1Q24 due to the Voltaira merger [7] - Networking segment grew 9% YoY driven by AI demand and new CPU-related products [2] - Computing segment increased 6% YoY supported by market recovery [2] AI Server Opportunity - FIT Hon Teng expects US$500-1 000 content value per compute tray for AI servers in FY24E [2] - AI revenue share is projected to be 7-9% in FY24E up from 1% in FY23 [2] Valuation - The stock is trading at 8 9x/6 7x FY24/25E P/E which is considered attractive given multiple growth drivers [2][13] - The new target price of HK$2 40 is based on 11x FY24E P/E reflecting accelerated growth and profitability recovery [13] Growth Drivers - Key catalysts include AirPods shipments AI server product updates and continued revenue upside from auto business consolidation [13] - The company's "3+3 Strategy" is expected to drive accelerated growth and profitability recovery [13]

Financial Performance - For the fiscal year ended December 31, 2023, the revenue was $4,195,550 thousand, a decrease of 7.4% compared to $4,530,603 thousand in 2022[7]. - Gross profit for 2023 was $807,140 thousand, representing a gross margin of 19.2%, up from 16.9% in 2022[6]. - Operating profit decreased to $262,831 thousand in 2023, with an operating margin of 6.3%, compared to 6.8% in the previous year[7]. - Net profit attributable to shareholders was $128,969 thousand, down from $169,619 thousand in 2022, reflecting a net profit margin of 3.1%[7]. - Revenue for the year ended December 31, 2023, was $4,196 million, a decrease of 7.4% compared to the previous year, while profit decreased by 23.5% to $130 million[18]. - Annual profit fell by 23.5% from $170 million in 2022 to $130 million in 2023, resulting in a profit margin decrease from 3.8% to 3.1%[31]. - The company reported a net profit of $128,969 thousand for the year, compared to $169,619 thousand in the previous year, reflecting a decrease of approximately 24%[191]. - The company’s total comprehensive income for the year was reported at $89,578 thousand, a decrease from $170,342 thousand in the previous year[191]. Revenue Segmentation - The smartphone component segment remains the primary revenue source, with a 17.2% decrease in revenue compared to the previous year due to changes in high-end smartphone product structures and competition[18]. - The network infrastructure segment experienced a significant revenue decline of 43.7% year-over-year, attributed to inventory destocking in the server downstream market[18]. - Revenue from the electric vehicle (EV) segment increased by 99.7% year-over-year, bolstered by the acquisition of Prettl SWH Group, now known as FIT Voltaira Group GmbH[18]. - The system terminal product segment saw a revenue increase of 6.0% year-over-year, maintaining competitiveness in existing acoustic products and capitalizing on new wireless charging opportunities for smartwatches[19]. - Revenue from the smartphone segment decreased by 17.2%, primarily due to changes in high-end smartphone product structures and increased competition[23]. - Revenue from the network infrastructure segment decreased by 43.7%, influenced by inventory destocking in the server downstream and a shift in product mix[24]. - Revenue from the electric vehicle segment increased by 99.7%, attributed to the acquisition of the German automotive component manufacturer FIT Voltaira[24]. Assets and Liabilities - Total assets increased to $5,093,736 thousand in 2023, compared to $4,547,183 thousand in 2022[6]. - Total liabilities rose to $2,656,358 thousand, compared to $2,200,244 thousand in the previous year, marking an increase of 20.7%[189]. - Cash and cash equivalents increased significantly to $1,316,364 thousand from $914,045 thousand, a rise of 44%[187]. - The company’s retained earnings stood at $1,850,209 thousand as of December 31, 2023, up from $1,734,043 thousand, indicating a growth of about 6.7%[192]. Expenses and Investments - Distribution and selling expenses increased by 12.8% to $105 million in 2023, mainly due to the full consolidation of FIT Voltaira[26]. - Administrative expenses rose by 46.8% to $191 million in 2023, primarily due to the acquisition of FIT Voltaira and increased professional fees[27]. - R&D expenses increased by 4.0% from $296 million in 2022 to $308 million in 2023, primarily due to the acquisition of FIT Voltaira[28]. - Capital expenditures surged to $510 million in 2023 from $131 million in 2022, primarily for the acquisition of FIT Voltaira and new production facilities[33]. Cash Flow and Financing - Operating cash flow from business activities increased to $648,793 thousand, up from $635,725 thousand year-over-year, indicating a growth of about 2%[194]. - The company incurred a total cash outflow from investing activities of $410,212 thousand, significantly higher than the previous year's outflow of $66,164 thousand[194]. - The company raised $1,368,698 thousand through bank borrowings, compared to $1,112,870 thousand in the prior year, reflecting an increase of approximately 23%[194]. - The cash flow from financing activities showed a net inflow of $248,584 thousand, a recovery from a net outflow of $270,239 thousand in the previous year[194]. Strategic Initiatives - The company is implementing a "3+3" strategy to restructure resources for future growth and develop high-margin products[11]. - Significant capital investments are being made for ongoing global expansion despite external market challenges[11]. - The company continues to invest in advanced connector solutions for electric vehicles, 5G AI IoT, and acoustic applications to leverage next-generation interconnect technology trends[12]. - The acquisition of Belkin has resulted in record performance, with plans to expand the Disney collaboration product line and introduce innovative products in 2024[13]. Governance and Compliance - The board of directors' compensation is reviewed by the compensation committee and approved by the board, considering factors such as experience, responsibilities, and company performance[41]. - The company has established stock option plans and restricted stock incentive plans to provide valuable rewards to attract and retain talent[41]. - The company has a strong focus on compliance with relevant laws and regulations, as well as maintaining relationships with employees, customers, and suppliers[60]. - The company ensures compliance with legal and regulatory requirements as part of its corporate governance responsibilities[134]. Shareholder Relations - The company emphasizes the importance of effective communication with shareholders to enhance investor relations and ensure informed investment decisions[164]. - Shareholders holding at least 10% of the company's share capital have the right to request a special general meeting to discuss specified matters[166]. - The company has adopted a shareholder communication policy to foster mutual relationships and communication with shareholders[164]. Risk Management - The company has a risk management framework that includes a supervisory layer (Board and Audit Committee), an execution layer (functional departments), and a management layer (management team)[156]. - The internal audit department completed the 2023 risk management report and presented it to the Audit Committee, confirming the effectiveness of the risk management system[157]. Employee and Diversity Initiatives - As of December 31, 2023, the company had approximately 66,148 employees, an increase from 53,544 employees as of December 31, 2022[40]. - The overall gender ratio of the company as of December 31, 2023, is 48.2% male and 51.8% female[147]. - The board of directors consists of 87.5% male and 12.5% female members[147]. - The company appointed a female director on August 7, 2023, emphasizing its commitment to gender diversity[146].

Investment Rating - The report maintains a BUY rating for FIT Hon Teng with a target price (TP) of HK$ 2.42, indicating a potential upside of 12.6% from the current price of HK$ 2.15 [5][13]. Core Insights - Recent stock price corrections are viewed as overdone, primarily driven by investor concerns regarding Apple's TWS order allocation. Management has confirmed that the first production line of AirPods in Vietnam began shipments in February 2024, expected to contribute 5-7% of sales in FY24E. By 2025, additional production lines will be added in India, positioning FIT and Luxshare as the two largest AirPods suppliers with a projected market share of 30% and 70% respectively [2][3]. - The management has reiterated a solid outlook for 2024, projecting high-teens revenue growth, over 15% gross profit (GP) and operating profit (OP) growth year-on-year, driven by AirPods, AI server connectors, and the auto business [3][4]. Financial Summary - Revenue is projected to grow from US$ 4,196 million in FY23A to US$ 4,715 million in FY24E, reflecting a year-on-year growth of 12.4%. Net profit is expected to increase significantly from US$ 129.6 million in FY23A to US$ 201.2 million in FY24E, representing a growth of 55.3% [4][11]. - The earnings summary indicates a consistent improvement in profitability metrics, with gross profit margins expected to rise from 19% in FY23A to 20% in FY24E, and operating profit margins increasing from 6.3% to 7.5% over the same period [11][18]. Growth Drivers - Key growth drivers identified include the AirPods production ramp-up, AI server product launches, and consolidation in the auto business, with expected contributions of 5-7% from AirPods, 7-9% from AI server products, and 8% from the auto business in FY24E [3][4]. - The report highlights that the recent share price correction presents a buying opportunity, with the stock trading at attractive valuation multiples of 9.7x and 7.6x for FY24E and FY25E P/E respectively, compared to a historical average of 15x [3][13].