7 July 2025 | 10:31AM HKT GC Tech: Time Interconnect (1729.HK): High-speed cable and Servers ODM; China Cloud Capex to drive growth ahead We talked to Time Interconnect (1729.HK, Not Covered) management recently. Time Interconnect provides customized copper and optical fiber cable, along with servers ODM. Overall, management remains positive on the company's revenue growth in 2025E driven by (1) rising AI demand to drive adoption of high-speed cable products, where the company benefits from offering compreh ...

June 9, 2025 08:05 AM GMT Greater China Semiconductors | Asia Pacific Cloud semis: time to turn constructive With a potential cloud capex trough in 4Q/1Q26 and US tariff impact being priced in, we think it's time to turn positive from a top-down perspective. Rising inference demand to sustain CPU and non-standard AI server demand, on top of AI server rack ramp up. Upgrade Aspeed to OW and raise Montage PT. Key Takeaways Reversing our thesis on cloud semis: We took a more neutral view on cloud semi stocks in ...

Core Insights - Ciena Corp. reported a quarterly revenue growth of 23.6% to $1.13 billion, surpassing analyst expectations of $1.09 billion, but the adjusted EPS of 42 cents fell short of the consensus estimate of 52 cents [1] - The adjusted gross margin decreased by 250 basis points to 41%, while the adjusted operating margin increased by 140 basis points to 8.2% [1] Analyst Ratings and Price Targets - Rosenblatt analyst Mike Genovese maintained a Neutral rating on Ciena and reduced the price target from $85 to $78, citing concerns over margins due to customer and product mix [2] - Needham analyst Ryan Koontz reiterated a Buy rating with a price target of $90, expressing optimism about Ciena's technology and market position despite mixed fiscal second-quarter results [2][8] Revenue and Margin Insights - Genovese noted that the gross margin was impacted by a heavy sales mix of new line systems, which typically have lower margins initially [3] - Ciena's Cloud and Service Provider DCI markets are expected to drive multi-year growth above 8% to 11%, with potential revenue growth exceeding this range before the end of fiscal 2025 [4] Future Projections - Genovese projected fiscal 2025 revenue of $4.58 billion and adjusted EPS of $2.24, while Koontz projected revenue of $4.57 billion and adjusted EPS of $2.25 [6][9] - Both analysts highlighted that the fiscal second-half guidance indicates higher revenue growth but lower gross margin and EPS than previously expected [6] Market Dynamics - The strong performance in the Cloud segment, which grew 88% year-over-year, contributed to Ciena's outperformance, although new products with lower gross margins are increasing in mix faster than anticipated [7] - Increased tariff costs are expected to impact gross profit by approximately $10 million per quarter, raising concerns about potential worsening conditions [7] Competitive Landscape - The outlook for Datacom companies and Telecom- and DCI-exposed names remains positive, as Ciena's gross margin issues are considered company-specific [5] - Koontz views the stock pullback as a buying opportunity, anticipating continued share gains and emerging intra-data center opportunities in fiscal 2027 [8]

May 5, 2025 09:00 PM GMT Greater China Semiconductors | Asia Pacific Cloud semis: Heading into the 2H25 trough M Recent developments in the cloud semis space mean our conservative stance holds near-term, but we maintain our view that the cycle could trough in 2H25. Key Takeaways China CIO survey suggests potential downside in 2H25: China cloud capex tends to play catch-up in the late phase of a cloud capex upturn or even in a downturn (link). Our recent CIO survey points to datacenter build-out as a top spe ...

Hardware & Networking Cloud Capex Wrap-up: Robust Investment Momentum Continues, Contrary to Concerns Around Slowdown and Tariff Impact J P M O R G A N Meta, Microsoft and Google reported strong capex growth in the Mar-Q, with the three US Cloud Service Providers (CSPs) together reporting strong double-digit growth year-over-year in aggregate (+60% y/y). Importantly, the raised full-year outlook from Meta, the reiterated fiscal 2H outlook from Microsoft, and the reiterated full-year outlook from Google impl ...

14 April 2025 | 12:15AM HKT China AI servers China Cloud capex to support growth ahead; Initiate Huaqin and Lingyi at Buy; Inspur at Neutral We initiate on the China AI servers supply chain: Inspur (brand), Huaqin (ODM), and Lingyi (component), and expect the supply chain to be driven by demand from their home market, China. In our global server report, we expect China Cloud capex to grow at 26% YoY in 2025E, and to stay at a similar high level in 2026E. As local foundation models enhance, we expect more ap ...