Core Viewpoint - Industrial Fulian's strong performance in AI server business is expected to continue, leading to sustained revenue growth and profitability [2][5]. Financial Performance - In H1 2025, the company achieved revenue of 360.76 billion yuan, a year-on-year increase of 35.6%, and a net profit of 12.11 billion yuan, up 38.6% year-on-year [2]. - For Q2 2025, revenue reached 200.35 billion yuan, reflecting a 35.9% year-on-year growth and a 24.9% quarter-on-quarter increase; net profit was 6.88 billion yuan, up 51.1% year-on-year and 31.6% quarter-on-quarter [2]. AI Business Growth - The overall server revenue grew over 50% year-on-year in Q2 2025, with CSP server revenue increasing over 150% and AI server revenue up over 60% [3]. - The GB200 product showed significant improvement in assembly yield and capacity utilization, with a clear upward trend in performance [3]. - The GB300 is expected to achieve substantial shipments in H2 2025, with single-unit profits anticipated to exceed those of GB200 [3]. - ASIC collaboration with major North American CSPs is expected to contribute higher revenue and profit increments in 2026 due to its customized nature [3]. Communication Network Business - The 800G high-speed switch has seen substantial shipments, with H1 2025 revenue reaching nearly three times that of the entire year of 2024 [4]. - The precision structural components business benefited from the popularity of specific AI mobile phones and high-end models, with a 17% year-on-year increase in shipment volume [4]. Investment Recommendations - Revenue projections for 2025-2027 are set at 922.4 billion, 1,405.6 billion, and 1,701.1 billion yuan respectively, with net profits of 33.6 billion, 49.4 billion, and 58.1 billion yuan [5]. - Corresponding EPS estimates are 1.69, 2.49, and 2.93, with PE ratios of 27.1, 18.4, and 15.7 [5].

Investment Rating - The investment rating for the company is "Accumulate" [3] Core Views - The company is expected to achieve a revenue of 3.65 to 3.88 billion yuan in the first half of 2025, representing a year-on-year growth of 85% to 97%. The net profit attributable to shareholders is projected to be between 510 to 550 million yuan, with a year-on-year increase of 432% to 471% [1] - The company's Q2 performance shows significant growth driven by AI server and high-speed switch orders, with Q2 revenue estimated at 2.186 billion yuan, a year-on-year increase of 100.9% and a quarter-on-quarter increase of 38.4% [6] - The company is expanding its AI-PCB capacity and accelerating the introduction of more ASIC customers, which is expected to enhance its market share in the ASIC supply chain and high-speed switch market [6] Financial Data and Valuation - The total revenue for 2023 is projected at 3.273 billion yuan, with a year-on-year decrease of 7%. However, revenue is expected to grow significantly in the following years, reaching 8.202 billion yuan in 2025, a growth of 75% [2][10] - The net profit for 2025 is estimated at 1.321 billion yuan, reflecting a year-on-year growth of 298% [2][10] - The company's PE ratio is projected to decrease from -1554.2 in 2023 to 29.4 in 2025, indicating improving profitability [2][10] Stock Performance - The company's stock has shown strong absolute performance over the past 12 months, with a 73% increase [5] - The relative performance against the CSI 300 index has also been positive, with an increase of 58% over the same period [5] Key Financial Metrics - The company has a total market capitalization of 38.8 billion yuan and a current share price of 46.7 yuan [3] - The return on equity (ROE) is reported at 11.2%, indicating a solid return on shareholders' equity [3]

Summary of Flex (FLEX) 2025 Conference Call Company Overview - **Company**: Flex (FLEX) - **Industry**: Electronics Manufacturing Services (EMS) - **Key Speakers**: CEO Revathi Advaithi, Rob Campbell (CEC Business Lead), Michelle Simmons (Head of IR) Core Business Segments - **Data Center Business**: - Unique positioning as a supplier of both IT integration and power products, which is rare in the industry [6][10] - Current business size is approximately $5 billion, with a growth rate of 35% projected for the year [10] - Previous year growth was 50% year-on-year [12] - Major drivers include the increasing demand for AI infrastructure, which is compute and power hungry [12][14] - **CEC (Communications Enterprise and Cloud)**: - Largest business unit within Flex, comprising networking, wireless, and satellite communications [27][28] - Engages with all four major US hyperscalers, providing a range of services from server boards to full rack integration [35][36] Financial Performance and Growth Drivers - **Revenue Growth**: - Data center business is expected to grow at 35% this year, following a 50% growth last year [10][12] - Long-term guidance suggests a conservative growth rate of 20% through the cycle [14] - **Impact of Tariffs**: - Transition towards North American manufacturing has accelerated due to tariffs and supply chain resiliency discussions [21][22] - Flex is focusing on complex products with long-term customer relationships to drive growth [22] Market Trends and Competitive Advantages - **AI Infrastructure**: - Significant growth potential in AI infrastructure build-out over the next decade, driving demand for data center services [12][13] - Power density and cooling solutions are becoming increasingly critical as data center requirements evolve [14][55] - **Power Business**: - Flex is positioned uniquely in the power space, providing solutions from grid to chip, which integrates both electrical and IT components [54][55] - Focus on complex products leads to higher margins, with the data center space being particularly lucrative [48] Margin Outlook - **Operating Margins**: - Guidance for 6% operating margin, with a focus on improving the mix of business units to enhance margins [42][46] - Agility business is currently producing higher margins than reliability, with expectations for continued improvement [46] Capital Allocation and Shareholder Returns - **M&A and Share Buybacks**: - Flex has balanced M&A investments with a share buyback strategy, aiming for continued shareholder returns [62] - The company plans to maintain this strategy moving forward, focusing on both organic growth and acquisitions [62] Additional Insights - **Consignment Business**: - The percentage of revenue from consignment has increased from 11% to 20%, indicating a growing trend [58] - Despite this, Flex has maintained strong growth rates in its data center business [58] - **Future Vision**: - Flex aims to be a technology leader in the data center space, addressing heat and power challenges with innovative solutions [60][61] - The company believes its margin journey has just begun, with significant potential for future growth [61]

Investment Rating - The report assigns a "Buy" rating for the company with a target price of $133.02 based on a 20X PE for 2026 [4]. Core Views - The company is a leading manufacturer of ASIC servers and Ethernet switches, benefiting from the growth in AI inference demand, particularly from major cloud service providers in North America [2][3]. - The company is expected to recover from a short-term decline in server revenue due to Google's TPU product transition, with anticipated growth resuming in the second half of 2025 [2]. - The company is actively expanding its customer base for ASIC servers, having become a supplier for Meta and secured a project with a leading commercial AI company [2][3]. Summary by Sections 1. Deep Layout in ASIC Servers and Ethernet Switches - The importance of inference computing power is increasing, and the ASIC industry chain is expected to benefit from this trend [14]. - The company is positioned to benefit from the volume growth of ASIC servers and the expansion of its customer base, particularly with Google and Meta [27][31]. - The Ethernet switch business is poised to grow due to the trend of AI Ethernet networking, with increased demand for high-speed switches [32]. 2. Transition from EMS to ODM - The company is shifting from an EMS model to an ODM model, which is expected to enhance customer binding and improve profitability [47]. - The revenue from the hardware platform solutions (ODM) is projected to grow significantly, contributing to overall revenue growth [50][52]. - The company's gross margin and operating profit margin have been steadily increasing due to the growth of its ODM business [52]. 3. ASIC Industry and Company Alpha - The company is well-positioned in the ASIC server and Ethernet ODM switch market, benefiting from industry trends and new customer acquisitions [3][4]. - The company’s net profit is forecasted to grow significantly over the next few years, with expected profits of $593 million, $765 million, and $871 million for 2025, 2026, and 2027 respectively [4][8]. - The company is expected to gain market share as it expands its customer base and increases the complexity of its products [31]. 4. Profit Forecast and Investment Recommendations - The company’s revenue is projected to grow from $7.96 billion in 2023 to $15.89 billion in 2027, with a compound annual growth rate (CAGR) of approximately 14.1% [8]. - The EBITDA is expected to increase from $467 million in 2023 to $1.296 billion in 2027, reflecting strong operational performance [8].

刘扬伟表示，现在AI服务器是满手订单，需求不是瓶颈，主要是生产及测试，能否赶得上客户需求， 从4月营收来看，GB200开始大量出货，AI服务器出货将一季比一季好，今年AI服务器营收成长将超过 50%，AI服务器营收规模可突破1兆元。 法人关注GB300出货进展，刘扬伟语带保留说，"那个男人快来了，到时可以问他，不过，因为有了 GB200的生产经验，可以大大缩短量产时间，学习曲线会愈来愈好。" 在中东AI专案方面，刘扬伟说，鸿海在沙乌地阿拉伯布局多年，与当地厂商合资电动车企业，旗下鸿 腾精密也与当地企业合作，布局充电装置，在沙国也有资通讯（ICT）合作案进行，加上鸿海在AI服务 器产业链，与上游芯片和下游客户建立稳固合作关系，在重大专案上，鸿海都会参与其中。 他强调，中东AI需求庞大，至于是向品牌采购，还是向ODM厂采购AI服务器，客户会做一个平衡，接 下来要与客户共同讨论规划。 至于ASIC服务器，刘扬伟说，已与几家业者在开发，客户就是CSP，鸿海会做到L10（服务器组装）。 鸿海（2317）昨（14）日举行法说会，董事长刘扬伟表示，受到地缘政治及汇率影响，2025年业绩展望 将由强劲成长下修为显著成长。业内 ...