EBSCN·2025-08-27 11:35Investment Rating - The report initiates coverage on the company with a "Buy" rating [4]. Core Insights - The company, Huiju Technology, is a custom wire interconnection solution provider, with a diversified business model encompassing wire components, digital wires, and server segments, primarily serving telecommunications, data centers, industrial, medical, and automotive sectors [1][16]. - The company is expected to benefit significantly from the strong growth in the AI market, with projected revenues for FY2024 reaching HKD 7.39 billion, a year-on-year increase of 53.1% [1][5]. - The acquisition of Leoni AG's automotive cable solutions business is anticipated to enhance the company's competitiveness in the smart automotive supply chain [3][68]. Summary by Sections Company Overview - Huiju Technology was established in 2017 and listed in 2018, with Lixun Precision becoming the controlling shareholder in 2022 by acquiring 74.67% of the company [1][20]. - The company operates in three main segments: wire components, digital wires, and servers, with a focus on customized solutions for various industries [1][16]. AI Market Growth - The global AI market is experiencing rapid expansion, with investments expected to reach USD 315.8 billion in 2024 and exceed USD 815.9 billion by 2028, driven by increasing demand for AI computing power [2][33]. - The company's data center segment is projected to generate HKD 12.14 billion in revenue for FY2024, reflecting a year-on-year growth of 53.4% [2][39]. Automotive Sector Development - The global automotive industry is undergoing a transformation towards electrification and intelligence, with the smart connected vehicle market in China expected to grow significantly [3][61]. - The acquisition of Leoni AG is expected to strengthen the company's position in the automotive cable market, which is projected to reach USD 29.7 billion by 2034 [3][62]. Financial Forecast and Valuation - The company is forecasted to achieve net profits of HKD 6.58 billion, HKD 11.12 billion, and HKD 14.12 billion for FY2025, FY2026, and FY2027, respectively, with growth rates of 46.0%, 68.9%, and 26.9% [4][5]. - The report suggests a valuation based on projected P/E ratios of 37x, 22x, and 17x for the years 2025 to 2027 [4][5].