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 announced that its wholly-owned subsidiary, FIT Voltaria, would acquire a German auto electronics supplier, Auto-Kabel Group, at a total consideration of EUR 72.5mn (implying 0.5x P/B, lower than FIT’s 1.3x and global peers’ 3.4x).</li><li>The deal is expected to close by the end of 2024 upon regulatory approval.</li><li>AutoKabel is a global leader in electromobility with nine global production sites, focusing on components for auto systems and power consumption (charging sockets, drive cables and battery connectors). </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 announced that its wholly-owned subsidiary, FIT Voltaria, would acquire a German auto electronics supplier, Auto-Kabel Group, at a total consideration of EUR 72.5mn (implying 0.5x P/B, lower than FIT’s 1.3x and global peers’ 3.4x).The deal is expected to close by the end of 2024 upon regulatory approval.AutoKabel is a global leader in electromobility with nine global production sites, focusing on components for auto systems and power consumption (charging sockets, drive cables and battery connectors). 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) - Positive on Acquisition of Auto-Kabel Group; Reiterate BUY

<ul><li>FIT Hon Teng announced a positive profit alert for 1H24 earnings, at US$28- 33mn (vs net loss of US$9mn in 1H23), mainly driven by stronger computing (PC)/ networking (server) segments and better operating efficiency.</li><li>However, stock price is pressured by questions on 2024 earnings recovery pace and higher OPEX for AirPods and Voltaira biz.</li><li>We are buyers on weakness given a back-loaded 2H24E with multiple product launches and operating leverage in 2H24E. </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 a positive profit alert for 1H24 earnings, at US$28- 33mn (vs net loss of US$9mn in 1H23), mainly driven by stronger computing (PC)/ networking (server) segments and better operating efficiency.However, stock price is pressured by questions on 2024 earnings recovery pace and higher OPEX for AirPods and Voltaira biz.We are buyers on weakness given a back-loaded 2H24E with multiple product launches and operating leverage in 2H24E. 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) - Share Pressure Overdone

<ul><li>We hosted FIT Hon Teng (FIT) at CMBI Technology Corporate Day on 25 Jun.</li><li>After 50% rally post-Computex and WWDC in early June, investors expressed strong interests in 1) AI server upside in 2H24/2025, 2) AirPods ramp-up in Vietnam/India, 3) new EV JV and opportunities, and 4) AI PC/phone cycle in 2H24E. Mgmt. stated 2Q24 rev/GPM guidance on track with upside potential in smartphone/networking segments.</li><li>Overall, we maintain our positive view on FIT’s multiple growth drivers in FY24/25E (AI server connectors, AirPods, EV biz), and expect further upside in AI server content value, general server recovery and AI PC/smartphone upcycle. </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 FIT Hon Teng (FIT) at CMBI Technology Corporate Day on 25 Jun.After 50% rally post-Computex and WWDC in early June, investors expressed strong interests in 1) AI server upside in 2H24/2025, 2) AirPods ramp-up in Vietnam/India, 3) new EV JV and opportunities, and 4) AI PC/phone cycle in 2H24E. Mgmt. stated 2Q24 rev/GPM guidance on track with upside potential in smartphone/networking segments.Overall, we maintain our positive view on FIT’s multiple growth drivers in FY24/25E (AI server connectors, AirPods, EV biz), and expect further upside in AI server content value, general server recovery and AI PC/smartphone upcycle. 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 in AI Server, AI PC/Phone and AirPods in FY24/25E

<ul><li>FIT Hon Teng posted a solid set of 1Q24 results, in-line with its positive profit alert, and mgmt. reiterated its FY24E guidance (rev +low-double digit YoY, GP +mid-double digit YoY, OPM 5.5%) in earnings call.</li><li>After hosting post-results NDR call with mgmt. on 10 May, we believe recent stock correction was mainly due to profit taking after a 101% rally in the past three months, and we remain positive on its 2H24E outlook backed by AirPods ramp-up, integration of Voltaira auto electronics business and order wins of AI server/networking products (US$500-1,000 content value per compute tray).</li><li>We slightly adjust FY24-26E forecasts to reflect higher GPM and better sales mix offset by higher opex for new 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.

FIT Hon Teng posted a solid set of 1Q24 results, in-line with its positive profit alert, and mgmt. reiterated its FY24E guidance (rev +low-double digit YoY, GP +mid-double digit YoY, OPM 5.5%) in earnings call.After hosting post-results NDR call with mgmt. on 10 May, we believe recent stock correction was mainly due to profit taking after a 101% rally in the past three months, and we remain positive on its 2H24E outlook backed by AirPods ramp-up, integration of Voltaira auto electronics business and order wins of AI server/networking products (US$500-1,000 content value per compute tray).We slightly adjust FY24-26E forecasts to reflect higher GPM and better sales mix offset by higher opex for new 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.

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Tencent Music Entertainment Group / Equity Bottom-Up

<ul>
<li>Hong Kong market sectors outperforming since the stimulus in September are Consumer Discretionary and Healthcare as Utilities, Telecom and Energy lag.</li>
<li>
<a href="https://www.smartkarma.com/entities/crrc-corp-ltd-461535b2-37ac-4589-b4d9-8b71c06c43b8" target="_blank" data-smartkarma-citation="entities:124:1" rel="noopener">CRRC Corp Ltd H (1766 HK)</a> gets BUY recommendations as its results point to continued strength in the rail equipment sector with passenger volume surging.
</li>
<li>
<a href="https://www.smartkarma.com/entities/tencent-music-entertainment-group" target="_blank" data-smartkarma-citation="entities:36601:1" rel="noopener">Tencent Music Entertainment Group (1698 HK)</a> reported solid results as it shifts to a pay-to-stream subscription model. <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> had a blowout quarter with EV sales surging.
</li>
</ul>


Hong Kong market sectors outperforming since the stimulus in September are Consumer Discretionary and Healthcare as Utilities, Telecom and Energy lag.

CRRC Corp Ltd H (1766 HK) gets BUY recommendations as its results point to continued strength in the rail equipment sector with passenger volume surging.


Tencent Music Entertainment Group (1698 HK) reported solid results as it shifts to a pay-to-stream subscription model. Xiaomi Corp (1810 HK) had a blowout quarter with EV sales surging.



BUY/SELL/HOLD: Hong Kong Stock Updates (NOVEMBER 18)

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)