20230804-招银国际-FIT_HON_TENG-06088.HK-1H23_Preview__expect_weakness_in-line__Back-end_loaded_in_2H23E_6页_1mb

FIT Hon Teng (6088 HK) Report Summary

1H23 Performance

• Estimated 2023 first-half revenue: US$1,823 million, a 13% year-on-year decline, in-line with guidance.
• Net loss projected at US$11.9 million, attributed to weak consumer electronics demand, higher digital transformation expenses, and overseas capacity expansion.

2H23E Outlook

• Expectation for back-end loaded recovery; revenue and earnings to rise, with quarter-on-quarter improvement driven by better product mix (e.g., CPU sockets, DDR5 connectors, acoustics) and new iPhone model launches.
• Operating expenses ratio peaks at 14% in FY23E, moderating thereafter.

Valuation and Recommendation

• Current valuation: Trading at 8.1x and 6.6x forward P/E for FY23E and FY24E, respectively, below 5-year averages.
• Target price: HK$2.18 (66.4% upside from current price), based on 11x FY24E P/E.
• Recommendation: Maintain BUY due to attractive risk-reward from earnings recovery and multiple growth drivers.

Key Financial Metrics

• FY23E revenue forecast: US$4,495 million; net profit: US$144 million.
• Gross margin ~18-19%; operating margin ~5-6%; net margin ~3-4%.

Catalysts

• New product ramps, TWS project wins, and Apple-related share gains.