External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>FIT Hon Teng announced 1H23 results with revenue of US$ 1.78bn and net loss of US$ 9mn, largely in-line with guidance and our preview note, mainly due to weak seasonality, expense on digital transformation and networking product mix change.</li><li>Mgmt. maintained FY23E guidance (revenue flat YoY, gross profit double-digit YoY increase, net income 5-15% YoY decline), and expected 2H23E earnings recovery driven by seasonality, new product ramp up and contribution from Voltaira.</li><li>We trimmed FY23-25E EPS by 5-6% to reflect higher expense for business transformation. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

FIT Hon Teng announced 1H23 results with revenue of US$ 1.78bn and net loss of US$ 9mn, largely in-line with guidance and our preview note, mainly due to weak seasonality, expense on digital transformation and networking product mix change.Mgmt. maintained FY23E guidance (revenue flat YoY, gross profit double-digit YoY increase, net income 5-15% YoY decline), and expected 2H23E earnings recovery driven by seasonality, new product ramp up and contribution from Voltaira.We trimmed FY23-25E EPS by 5-6% to reflect higher expense for business transformation. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

FIT Hon Teng (6088 HK) – Weak 1H23 In-Line; Positive Outlook in 2H23E

<ul><li>FIT will announce its 1H23 results next week. We estimate 1H23E revenue of US$1,823mn (-13% YoY) and net loss of US$11.9mn, largely in-line with earlier guidance, given weak seasonality of consumer electronics, higher expense for digital transformation and overseas capacity expansion.</li><li>Looking into 2H23E, we expect a back-end loaded 2H23E with QoQ recovery, backed by better product mix (CPU socket, DDR5 connector, acoustics, Prettl business) and new iPhone model launch.</li><li>Despite near-term opex pressure, we think 1H23 earnings weakness has been reflected in share price, and we are positive on FIT’s improving product mix and margin expansion trend in 2H23E. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

FIT will announce its 1H23 results next week. We estimate 1H23E revenue of US$1,823mn (-13% YoY) and net loss of US$11.9mn, largely in-line with earlier guidance, given weak seasonality of consumer electronics, higher expense for digital transformation and overseas capacity expansion.Looking into 2H23E, we expect a back-end loaded 2H23E with QoQ recovery, backed by better product mix (CPU socket, DDR5 connector, acoustics, Prettl business) and new iPhone model launch.Despite near-term opex pressure, we think 1H23 earnings weakness has been reflected in share price, and we are positive on FIT’s improving product mix and margin expansion trend in 2H23E. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

FIT Hon Teng (6088 HK) – 1H23 Preview: Expect Weakness In-Line

Thematic (Sector/Industry)

<ul><li>2Q23 global smartphone shipment posted 7.8% YoY decline, which narrowed from -14.6%/-18.3% YoY in 1Q23/4Q22, based on IDC.</li><li>Despite shipment weakness in 1H23, inventory level started to normalize in 2Q23, and we expect supply chain restocking will lead to positive YoY growth in 4Q23E.</li><li>In particular, China market outperformed in 2Q23 with -2.1% YoY (vs. -12.1%/-12.8% YoY in 1Q23/ 4Q22).</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

2Q23 global smartphone shipment posted 7.8% YoY decline, which narrowed from -14.6%/-18.3% YoY in 1Q23/4Q22, based on IDC.Despite shipment weakness in 1H23, inventory level started to normalize in 2Q23, and we expect supply chain restocking will lead to positive YoY growth in 4Q23E.In particular, China market outperformed in 2Q23 with -2.1% YoY (vs. -12.1%/-12.8% YoY in 1Q23/ 4Q22).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Technology – 2Q23 Global Smartphone Shipment Decline Narrowed

<ul><li>We hosted an investor meeting with FIT’s mgmt. this week. Investors are interested in 2H23 outlook, technology trends and investment roadmap.</li><li>Overall, we remain positive on margin recovery in FY24/25E following higher investment into new products in FY23E.</li><li>We expect opex ratio to peak at 14.0% in FY23E and improve to 13.2%/12.8% in FY24/25E on economies of scale of new highermargin products. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We hosted an investor meeting with FIT’s mgmt. this week. Investors are interested in 2H23 outlook, technology trends and investment roadmap.Overall, we remain positive on margin recovery in FY24/25E following higher investment into new products in FY23E.We expect opex ratio to peak at 14.0% in FY23E and improve to 13.2%/12.8% in FY24/25E on economies of scale of new highermargin products. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

FIT Hon Teng (6088 HK) – Multiple Growth Drivers and Margin Recovery in FY24/25E

<ul><li>We discussed with mgmt. after recent correction this week.</li><li>Overall, we believe market concerns on higher opex are overdone since we expect opex ratio to peak at 14.0% in FY23E and improve to 13.2%/12.8% in FY24/25E on the back of economies of scale and improving efficiency.</li><li>We also expect FIT’s product expansion into higher-margin 400G optical cable/acoustics/EV components through Prettl’s acquisition would drive NPM recovery from 3.2% in FY23E to 3.6%/4.0% in FY24/25E. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We discussed with mgmt. after recent correction this week.Overall, we believe market concerns on higher opex are overdone since we expect opex ratio to peak at 14.0% in FY23E and improve to 13.2%/12.8% in FY24/25E on the back of economies of scale and improving efficiency.We also expect FIT’s product expansion into higher-margin 400G optical cable/acoustics/EV components through Prettl’s acquisition would drive NPM recovery from 3.2% in FY23E to 3.6%/4.0% in FY24/25E. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

FIT Hon Teng (6088 HK) – Recent Sell-Off Overdone

Taiwan

FIT Hon Teng Limited manufactures and distributes electrical components. The Company produces backplane connectors, memory cards, sockets, terminal blocks, and other products. FIT Hon Teng markets its products throughout Taiwan.

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FIT Hon Teng (6088 HK)