Investment Rating - The report maintains a Buy rating for FIT Hon Teng with a target price of HK$4.25, representing a 64.8% upside from the current price of HK$2.58 [3][13] Core Views - FIT Hon Teng's 3Q24 revenue and net profit grew by 1% and 24% YoY, respectively, driven by improved product mix, cost control, and operational efficiency [1][2] - The company's net profit margin (NPM) recovered to 5.8% in 3Q24, up from 1.1% and 2.0% in 1Q24 and 2Q24, respectively, supported by high-margin AI server products [1][2] - The GB200 AI server products are expected to start small-volume shipments in 4Q24, with mass production anticipated in 1Q25, driving revenue growth in connectors, cooling, and power-related products [2][3] - The report forecasts FY24E revenue and net profit growth of 12% and 42% YoY, respectively, with further improvements in operating efficiency and margins [2][13] Financial Performance - FY24E revenue is projected at $4,677 million, a 11.5% YoY increase, while FY25E revenue is expected to grow 30.8% YoY to $6,117 million [4][9] - FY24E net profit is estimated at $183.5 million, a 41.6% YoY increase, with FY25E net profit expected to grow 62.8% YoY to $298.7 million [4][9] - The gross profit margin (GPM) is expected to improve to 21% in FY24E, up from 19% in FY23, driven by better product mix and cost control [9][16] - Operating profit margin (OPM) is forecasted to increase to 7.0% in FY24E, compared to 6.3% in FY23, with further improvement to 7.7% in FY25E [9][16] AI Server Opportunity - The GB200/GB300 AI server revenue is estimated to reach $885.9 million in a bull case scenario, with $422.4 million in a base case and $191.3 million in a bear case [11] - Key components contributing to AI server revenue include connectors/cables, power/thermal solutions, and NVLink copper cables/connectors, with FIT Hon Teng holding a 20% share in connectors/cables and 5% in power/thermal solutions [11] - The HGX/MGX AI server revenue is projected at $76.7 million in a bull case, with $61.9 million in a base case and $47.0 million in a bear case [12] Valuation - The target price of HK$4.25 is based on a 13x FY25E P/E, reflecting the company's growth potential and margin recovery [13] - The current share price implies a 12.9x FY24E P/E and 7.9x FY25E P/E, which is considered attractive given the company's growth prospects [13][14] - The ROE is expected to improve to 10.8% in FY25E, up from 7.3% in FY24E, driven by higher profitability and operational efficiency [4][20] Catalysts - Key catalysts include the mass production of GB200 server products, progress in the Auto Kabel acquisition, updates on AirPods production in Vietnam/India, and further margin improvements [3][13]
FIT HON TENG：3Q24 先行 ： 盈利与利润率稳健回升一致 ； 关注 4Q24E GB200 产品