Investment Rating - The investment rating for FIT Hon Teng is maintained as "Buy" with a target price (TP) set at HK$1.65 [3][7]. Core Insights - The FY23 results were in line with expectations, with operating revenue decreasing by 7.4% year-on-year to US$4,196 million and shareholders' net profit decreasing by 23.5% year-on-year to US$130 million [9][11]. - The company is implementing a "3+3" strategy focusing on the development of electric vehicles (EVs), 5G AIoT, and acoustics, which is expected to drive future growth [11][13]. - The revenue mix from EV Mobility, new Generation 5G AIoT, and Audio is projected to reach 30% in 2024 and 40% in 2025 [11][13]. Financial Performance - Forecasted EPS for FY24-FY26 is US$0.023, US$0.029, and US$0.035 respectively, with a 9.0x PER for 2024 [7][9]. - The gross profit margin increased by 2.3 percentage points year-on-year to 19.2% in FY23, while R&D expenses as a percentage of total revenue increased to 7.3% [9][22]. - The company expects revenue growth in the coming years, with total revenue projected to increase from US$4,196 million in FY23 to US$5,472 million by FY26 [22]. Business Strategy and Market Position - The acquisition of SWH, now FIT Voltaira, enhances the company's product offerings in the EV sector, positioning it to meet the growing demand for high-voltage connectors and wiring harnesses [13][11]. - The company aims to expand its customer base and production capabilities in the EV mobility sector, leveraging its global layout and partnerships through MIH [11][13]. - The audio business is also expected to benefit from the increasing demand for high-speed connections driven by AI server growth and data center construction [11][13].
Results Were in Line with Expectations, While Layout in EV Mobility to Bring Huge Expandable Market Space, "Buy"