20220616-招银国际-FIT_HON_TENG-06088.HK-Corp_Day_Takeaways___3+3_Strategy__to_emerge_as_new_growth_driver_6页_1mb

报告摘要

FIT Hon Teng (6088 HK) Summary

Core Content

FIT Hon Teng (6088 HK) is a technology company that is expected to recover from a slow first half of 2022 due to production resumption in Kunshan, major client product launches, and momentum from Belkin. The company's management has maintained its FY22E revenue and gross margin guidance, but revised FY22-24E EPS downward by 12-16% due to lower demand and margin pressures from recent lockdowns.

The company is focusing on its "3+3 Strategy" which includes EV, 5G AIoT, and Audio segments. This strategy is expected to become a major growth driver, with revenue mix targets of 31% in 2023 (compared to 16% in 2021). The strategy includes expansion into EV charging, interconnect, and display, 5G AIoT socket and networking, and Audio through partnerships with Beats, Belkin, and SSI.

The company is currently trading at a distressed valuation of 7.0x and 6.2x FY22E and FY23E P/E, respectively. The analyst maintains a BUY rating with a new target price of HK$1.55, which is based on a 10x FY22E P/E (1 standard deviation below the historical average). The risk-reward is considered extremely attractive due to the current undervaluation and upcoming catalysts such as new products from Belkin and EV, M&A activity, and improving margins.

Key Financial Highlights

Financial Metric	FY20	FY21	FY22E	FY23E	FY24E
Revenue (US$ mn)	4,315	4,490	4,525	4,941	5,450
YoY Growth (%)	-1.3	4.1	0.8	9.2	10.3
Net Profit (US$ mn)	43	138	135	152	178
EPS (US$ cents)	0.64	2.04	1.99	2.25	2.64
YoY EPS Growth (%)	-82.2	219.9	-2.2	12.9	17.2
P/E (x)	21.8	6.8	7.0	6.2	5.3
P/B (x)	0.4	0.4	0.4	0.4	0.3
Yield (%)	1.0	3.2	3.2	3.6	4.2
ROE (%)	1.9	5.7	5.4	5.8	6.5
Net Gearing (%)	Net Cash	Net Cash	Net Cash	Net Cash	Net Cash

Revenue Breakdown

Computers and consumer electronics: 795 (FY19) → 976 (FY22E) → 1,025 (FY23E) → 1,076 (FY24E)
Mobile and wireless devices: 1,739 (FY19) → 1,406 (FY22E) → 1,476 (FY23E) → 1,550 (FY24E)
Communications infrastructure: 885 (FY19) → 905 (FY22E) → 996 (FY23E) → 1,125 (FY24E)
Automotive, industrial and medical: 129 (FY19) → 203 (FY22E) → 253 (FY23E) → 329 (FY24E)
Smart accessories: 559 (FY19) → 1,036 (FY22E) → 1,191 (FY23E) → 1,370 (FY24E)

Key Ratios

Ratio	FY20	FY21	FY22E	FY23E	FY24E
Gross margin (%)	13.4	15.0	15.0	15.4	15.6
Operating margin (%)	2.9	3.9	3.6	3.7	3.9
Net profit margin (%)	1.0	3.1	3.0	3.1	3.3
ROE (%)	1.9	5.7	5.4	5.8	6.5
ROA (%)	0.9	2.7	2.7	2.8	3.2

Valuation and Analyst Ratings

Target Price (HK$): 1.55 (up 44% from previous)
Current Price (HK$): 1.08
P/E (FY22E/FY23E): 7.0x / 6.2x
P/B (FY22E/FY23E): 0.4x / 0.4x
CMBIGM Rating: BUY
Analyst Recommendation: Maintain BUY

Upcoming Catalysts

New products from Belkin and EV
M&A activity
Improving margins
EU's new Type-C regulation, which is expected to boost demand for Type-C sockets and cables

Shareholding Structure

Foxconn Far East Ltd: 76.61%
Lu Sung-Ching: 3.98%

Stock Performance

Period	Absolute	Relative
1-mth	1.9%	-3.8%
3-mth	16.3%	7.8%
6-mth	-32.3%	-24.0%

Summary of Key Points

Revenue Recovery: Expected in 2H22E due to production resumption in Kunshan and client product launches.
"3+3 Strategy": Will be a major growth driver, with revenue mix target of 31% in 2023.
Valuation: Trading at a distressed valuation of 7.0x/6.2x FY22E/FY23E P/E.
Analyst View: Maintain BUY with a new target price of HK$1.55, based on 10x FY22E P/E.
Catalysts: New products from Belkin and EV, M&A activity, and improved margins.
Financial Health: Net cash position, stable P/B ratio, and improving ROE and ROA.

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