Investment Rating - The report maintains a "BUY" rating for FIT Hon Teng, with a target price raised to HK$7.33, indicating a potential upside of 22% from the current price of HK$6.01 [3][22]. Core Insights - FIT Hon Teng is positioned to benefit from significant growth drivers, particularly in AI-related revenue, which is expected to grow at a 95% CAGR from FY25 to FY27, reaching 18% of total revenue by FY27, up from 6% in FY25 [1][9]. - The company is anticipated to experience revenue and net profit growth of 11% YoY for FY25, with a notable increase in net profit growth of 21% YoY in 4Q25 [1][9]. - Upcoming catalysts include major industry events such as GTC and OFC 2026, which are expected to focus on advancements in interconnect and CPO solutions [1][22]. Financial Summary - Revenue is projected to increase from US$4,196 million in FY23 to US$6,696 million by FY27, reflecting a compound annual growth rate (CAGR) of 19.2% [2][24]. - Net profit is expected to rise from US$129.6 million in FY23 to US$434.8 million in FY27, with a significant growth rate of 39.5% in FY27 [2][24]. - The company's P/E ratio is forecasted to decrease from 42.2x in FY23 to 12.6x in FY27, indicating a potential re-rating as AI revenue contributions increase [2][22]. Segment Performance - The revenue breakdown indicates strong growth in the networking segment, with a projected increase of 56% YoY by FY27, while the smartphone segment is expected to decline by 16% in FY25 [19][24]. - AI server revenue is anticipated to grow significantly, reaching US$1.23 billion by FY26, contributing to the overall revenue mix [19][24]. - The mobility segment is also expected to show robust growth, with a projected increase of 95% YoY in FY25 [19][24].
FIT HON TENG：Strong 2026 outlook with AI interconnect/power/thermal upgrades as key growth drivers-20260226