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>Maintain BUY and raise TP to HK$2.42 to reflect stronger demand of next-gen high-speed connectivity in AI servers in FY24/25E, backed by MCIO connectors /cables and high-speed I/O products, recent launch of 224G high-speed products at DesignCon, and collaboration with MediaTek for high-speed connectivity solutions in CPO sockets at OFC.</li><li>During our NDR last week, mgmt. was positive on rising copper connectivity trend in AI servers and expected 1) 15-20% YoY for networking/server in FY24E (30-40% GPM), and 2) AI server related revenue (mainly copper) to reach 8-10% FY24E sales (vs. 1% in FY23), backed by new copper products and high-speed connection products in AI server.</li><li>We lifted FY24-25 EPS by 9-10% to reflect stronger demand of AI-related products and share gain from the US peers (Amphenol, TEL, Molex) in global server connector market following mass production of new AI products 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.

Maintain BUY and raise TP to HK$2.42 to reflect stronger demand of next-gen high-speed connectivity in AI servers in FY24/25E, backed by MCIO connectors /cables and high-speed I/O products, recent launch of 224G high-speed products at DesignCon, and collaboration with MediaTek for high-speed connectivity solutions in CPO sockets at OFC.During our NDR last week, mgmt. was positive on rising copper connectivity trend in AI servers and expected 1) 15-20% YoY for networking/server in FY24E (30-40% GPM), and 2) AI server related revenue (mainly copper) to reach 8-10% FY24E sales (vs. 1% in FY23), backed by new copper products and high-speed connection products in AI server.We lifted FY24-25 EPS by 9-10% to reflect stronger demand of AI-related products and share gain from the US peers (Amphenol, TEL, Molex) in global server connector market following mass production of new AI products 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) - Opportunities in US$1.7bn Server Connector/Cable Market

<ul><li>FIT Hon Teng delivered in-line FY23 results and upbeat FY24E guidance.</li><li>It posted FY23 revenue of US$4,196mn (-7% YoY) and net profit of US$130mn (- 24% YoY), largely in-line with guidance, mainly due to softer demand for traditional servers/PCs and optimization in networking segment.</li><li>Gross margin recovered to 19.2% thanks to a better product mix and strong execution of the “3+3 Strategy”. </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 delivered in-line FY23 results and upbeat FY24E guidance.It posted FY23 revenue of US$4,196mn (-7% YoY) and net profit of US$130mn (- 24% YoY), largely in-line with guidance, mainly due to softer demand for traditional servers/PCs and optimization in networking segment.Gross margin recovered to 19.2% thanks to a better product mix and strong execution of the “3+3 Strategy”. 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.

<ul><li>FIT Hon Teng will announce its 4Q23/FY23E results in March. We estimate FY23E revenue/net profit of US$ 4,184mn/131mn (-8%/-23% YoY) and 4Q23 revenue/ net profit of US$1,235mn/76.0mn (+7%/+121% YoY), largely in-line with guidance, given weak CE demand, SP business price pressure, networking product portfolio alternation and auto business integration.</li><li>Looking ahead, we are positive in new product ramp-up (high-speed connectivity products/DDR5 connectors/CPU sockets), auto business consolidation and audio product order wins in FY24/25E.</li><li>We slightly trimmed our topline estimates for FY23/24E due to smartphone price pressure and lowered shipment demand of the key customer. </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 will announce its 4Q23/FY23E results in March. We estimate FY23E revenue/net profit of US$ 4,184mn/131mn (-8%/-23% YoY) and 4Q23 revenue/ net profit of US$1,235mn/76.0mn (+7%/+121% YoY), largely in-line with guidance, given weak CE demand, SP business price pressure, networking product portfolio alternation and auto business integration.Looking ahead, we are positive in new product ramp-up (high-speed connectivity products/DDR5 connectors/CPU sockets), auto business consolidation and audio product order wins in FY24/25E.We slightly trimmed our topline estimates for FY23/24E due to smartphone price pressure and lowered shipment demand of the key customer. 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) - FY23E Preview: Earnings Recovery on Track

<ul>
<li>Apple is widely expected to launch its long-awaited MR headset in WWDC 2023 this week.</li>
<li>We believe 2023 is set to be one of the best years in VR/AR ecosystem development as Apple’s first MR headset will set new standard for innovation.</li>
<li>We expect technology upgrade to accelerate in displays, optics/sensors and tracking/interaction for enhancing user experience. </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.


Apple is widely expected to launch its long-awaited MR headset in WWDC 2023 this week.
We believe 2023 is set to be one of the best years in VR/AR ecosystem development as Apple’s first MR headset will set new standard for innovation.
We expect technology upgrade to accelerate in displays, optics/sensors and tracking/interaction for enhancing user experience. 

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 – Apple MR: Long-awaited next “iPhone moment”

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)