Investment Rating - The report initiates coverage on FIT HON TENG (6088 HK) with a "Buy" rating [2] Core Views - FIT HON TENG is a global leader in interconnect solutions with diversified business across AI Audio and EV sectors [2] - The company is well positioned to benefit from the growth in AI data center construction EV electrification and audio product demand [2] - Key growth drivers include potential entry into NVIDIA's GB200 NVL backplane connector supply chain increased TWS headset assembly share for a major client and synergies from the Voltaira acquisition [2] Business Overview - FIT HON TENG is a subsidiary of Foxconn Group specializing in connector products and precision manufacturing [5] - The company operates in six business segments: smartphones networking computing EV system products and others [14] - In 2023 the revenue breakdown was 25% smartphones 10% networking 18% computing 7% EV 34% system products and 6% others [14] Growth Drivers 5G AIoT - The company provides copper to optical interconnect solutions for AI data centers with potential to supply NVIDIA's GB200 NVL backplane connectors [2][24] - It retains optical interconnect capabilities including 800G optical modules and CPO technology [2][25] EV - The EV business is expected to grow significantly with the full consolidation of Voltaira in 2024 [2][29] - Voltaira's expertise in automotive sensors and connectors complements FIT HON TENG's EV strategy [29] Audio - The company has a comprehensive audio product portfolio through acquisitions of SSI and Belkin [2][31] - It is expected to increase its share in TWS headset assembly for a major client with new production lines in India [35] Financial Performance - Revenue in 2023 was 129 57 million down 23 93% YoY [15] - The EV and system products segments showed strong growth in 2023 with EV revenue up 99 66% and system products up 5 97% [15] - For 2024 2026 the company forecasts revenue growth of 7 5% 39 1% and 25 6% respectively with net profit growth of 36 7% 53 5% and 38 8% [46] Valuation - The stock is trading at 11x 7x and 5x 2024 2026 P E ratios which are below the peer average of 20x 16x and 13x [53] - The 2024 and 2025 PEG ratios are 0 3 and 0 2 respectively indicating attractive valuation [53]
FIT HON TENG：首次覆盖报告：全球领先的互联解决方案制造商，AI+Audio+EV三大业务开启新成长空间