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FIT HON TENG：Beneficiary of GB200 server ramp in 4Q24E; Assessing the AI server opportunity
06088FIT HON TENG(06088) 招银国际·2024-10-23 13:23

Investment Rating - Maintain BUY rating with a target price of HK425basedon13xFY25EP/E[1][30]CoreView−FITHonTengisidentifiedastheGB200serverwinnerintheH−sharetechspace,benefitingfromtheGB200serverrampin2025[1]−AIserverrevenueisestimatedtoreachUS4 25 based on 13x FY25E P/E [1][30] Core View - FIT Hon Teng is identified as the GB200 server winner in the H-share tech space, benefiting from the GB200 server ramp in 2025 [1] - AI server revenue is estimated to reach US484mn/823mn, accounting for 11%/16% of FIT's earnings in 2025/26E [1] - In the bull case, revenue could reach US886mninFY25E[1]−FITisexpectedtobenefitfromGB200serverrackrampwithsharegainsoverthenextfewyears[1]EarningsSummary−RevenueisforecastedtogrowfromUS886mn in FY25E [1] - FIT is expected to benefit from GB200 server rack ramp with share gains over the next few years [1] Earnings Summary - Revenue is forecasted to grow from US4 531mn in FY22 to US7347mninFY26E,withaYoYgrowthof3087 347mn in FY26E, with a YoY growth of 30 8% in FY25E [2][26] - Net profit is expected to increase from US170 1mn in FY22 to US3849mninFY26E,withaYoYgrowthof628384 9mn in FY26E, with a YoY growth of 62 8% in FY25E [2][26] - EPS is projected to rise from US2 42 cents in FY22 to US542centsinFY26E[2][26]AIServerOpportunity−FITisakeycomponentsupplierforGB200NVL72/36,includingcomputetrayconnectors/cables,NVLinkcoppercables,powerbusbar,liquidcoolingcomponents,andGPUsockets[1]−GB200serverrevenueisestimatedtoreachUS5 42 cents in FY26E [2][26] AI Server Opportunity - FIT is a key component supplier for GB200 NVL72/36, including compute tray connectors/cables, NVLink copper cables, power busbar, liquid cooling components, and GPU sockets [1] - GB200 server revenue is estimated to reach US422mn/886mn (base/bull) in FY25E [1] - Compute tray connector/cables and NVLink copper cables are expected to deliver US115mn/291mninFY25E[1]−LiquidcoolingcomponentsandGPUsocketsareforecastedtogenerateUS115mn/291mn in FY25E [1] - Liquid cooling components and GPU sockets are forecasted to generate US0 6mn/4 6mn in FY25E [1] Latest Developments - FIT is developing CPO solutions and launched the conceptual design of FITConn 800G high-speed connector module for AI connectivity [1] - Hon Hai showcased GB200 NVL72 racks and liquid cooling components at HHTD 2024 [1] - FIT is under qualification for server UQDs and is developing UDQs for use inside the server and on the CDM [19] Valuation - Trading at 9 5x FY25 P/E, valuation remains attractive compared to 42%/63% EPS growth in FY24/25E [1] - Upcoming catalysts include GB200 updates and 3Q24 results in November [1] Financial Summary - Revenue is expected to grow from US4531mninFY22toUS4 531mn in FY22 to US7 347mn in FY26E, with a YoY growth of 30 8% in FY25E [26] - Net profit is forecasted to increase from US1701mninFY22toUS170 1mn in FY22 to US384 9mn in FY26E, with a YoY growth of 62 8% in FY25E [26] - EPS is projected to rise from US242centsinFY22toUS2 42 cents in FY22 to US5 42 cents in FY26E [26]