Summary of Huiju Technology Conference Call Company Overview - Huiju Technology reported a revenue of HKD 4.9 billion in the first half of 2025, representing an 82% year-on-year increase, with a net profit of HKD 310 million, up 47% year-on-year. The company expects to exceed HKD 10 billion in revenue and achieve a net profit of approximately HKD 650 million for the full year 2025 [2][3][4] - The company is primarily engaged in digital wires, wire components, and server OEM services, with the server business accounting for the largest share (43%) [2][3][4] - The data center-related business contributes over 60% of total revenue, benefiting from the growing demand for AI computing power [2][3][4] Core Business Highlights - The gross margin for special wires is close to 50%, and wire components have higher added value. Revenue from data center wire components, special wires, and server businesses is expected to grow by 100%, 200%, and 40% year-on-year, respectively [2][3][4][12] - The company is controlled by Luxshare Precision, which holds over 70% of its shares, and plans to empower Huiju Technology with AI data center and automotive-related cable businesses [2][3][4][9] - The integration of Leoni K, a German automotive cable company, is expected to contribute approximately HKD 300 million in net profit by 2027, with a long-term net profit margin target of around 5% [2][3][4][13][14] Growth Logic - Huiju Technology's growth logic includes both organic growth and growth from consolidation. The company anticipates revenues of HKD 11 billion, HKD 14 billion, and HKD 16.7 billion from 2025 to 2027, with corresponding growth rates of 50%, 30%, and 20% [6][12] - The expected net profits for the same period are HKD 650 million, HKD 1.1 billion, and HKD 1.4 billion, with growth rates of 40%, 70%, and 30% [6][12] Market Position and Valuation - Huiju Technology is currently the only company in the Hong Kong stock market directly controlled by Luxshare, indicating strong support and collaboration expectations [5][17] - The company has a market capitalization exceeding HKD 28 billion, corresponding to a PE ratio of 43 times, which is considered high given its rapid growth [2][3][5] - The stock has a high expectation gap, with limited institutional coverage prior to September 8, 2023, when it entered the Hong Kong Stock Connect [17][18] Future Outlook - The company is expected to benefit from the increasing demand for AI computing power, particularly from North American clients like Google, which will positively impact its server OEM business [21] - The integration of Leoni K is progressing well, enhancing investor confidence and market expectations [21] - Long-term growth potential remains significant, with expectations for substantial revenue increases in various sectors, including data centers and automotive cables [24] Conclusion - Huiju Technology is positioned for significant growth driven by its strategic focus on high-demand sectors, strong backing from its parent company, and successful integration of new assets. Despite its high valuation, the company's growth prospects and market positioning suggest a favorable investment opportunity [15][19][24]

Core Viewpoint - 汇聚科技, a custom wire interconnection solution provider, is experiencing significant growth driven by the expansion of AI-related markets and the increasing demand for high-speed automotive data cables [1][2]. Group 1: Company Overview - 汇聚科技 was established in 2017 and went public in 2018, with 74.67% of its shares acquired by its controlling shareholder,立讯精密, in 2022 [1]. - The company operates in three main segments: wire components, digital wires, and servers, serving various sectors including telecommunications, data centers, industrial, medical, and automotive [1]. Group 2: Financial Performance - For FY2024, the company expects revenue of HKD 7.39 billion, a year-on-year increase of 53.1%, with gross profit of HKD 1.08 billion (up 58.6%) and net profit of HKD 450 million (up 62.7%) [1]. - The growth in performance is attributed to increased revenues from data centers, network wires, specialty wires, and servers [1]. Group 3: Market Trends and Opportunities - The global AI market is experiencing strong growth, with investments expected to reach USD 315.8 billion in 2024 and exceed USD 815.9 billion by 2028 [1]. - The demand for AI computing power is benefiting the company's data center segment, which anticipates revenue of HKD 1.214 billion in FY2024, a 53.4% increase year-on-year [1]. - The digital wire segment is also seeing significant growth, with network wires and specialty wires projected revenues of HKD 1.18 billion (up 49.6%) and HKD 240 million (up 207.8%) respectively in FY2024 [1]. Group 4: Strategic Developments - The acquisition of Leoni AG by the controlling shareholder, 立讯精密, is expected to enhance the company's automotive business, capitalizing on the growing demand for high-speed automotive data cables [2]. - Leoni K, the automotive cable solutions division, reported revenue of approximately EUR 1.464 billion in 2023 and turned profitable in Q1 2024 with a net profit of EUR 6.58 million [2]. - The integration of Leoni's expertise and global production capabilities is anticipated to strengthen the company's competitive position in the smart automotive supply chain [2]. Group 5: Profit Forecast and Valuation - The company forecasts net profits of HKD 658 million, HKD 1.112 billion, and HKD 1.412 billion for 2025-2027, with growth rates of 46.0%, 68.9%, and 26.9% respectively [3]. - The valuation based on projected earnings suggests a price-to-earnings ratio of 37x, 22x, and 17x for 2025-2027 [3]. - The growth is supported by sustained demand in AI-related data center infrastructure and the automotive sector's shift towards smart technologies [3].

Investment 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].