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>We spoke to FIT’s mgmt. following share price correction of 11% yesterday (24 Oct), mainly due to news about inspections by Chinese tax authorities and Natural Resource Department on Hon Hai’s key operating sites in China.</li><li>Mgmt. stated that tax inspection was part of the annual routine exercise and all businesses operate as normal.</li><li>In our view, despite ongoing overhang on the inspections, share price correction is overdone and valuation becomes attractive at 7.0x/5.6x FY23/24E P/E (1-sd below 5-year avg.), compared to 24%/25% EPS growth 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 spoke to FIT’s mgmt. following share price correction of 11% yesterday (24 Oct), mainly due to news about inspections by Chinese tax authorities and Natural Resource Department on Hon Hai’s key operating sites in China.Mgmt. stated that tax inspection was part of the annual routine exercise and all businesses operate as normal.In our view, despite ongoing overhang on the inspections, share price correction is overdone and valuation becomes attractive at 7.0x/5.6x FY23/24E P/E (1-sd below 5-year avg.), compared to 24%/25% EPS growth 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 Correction Overdone; 3Q23 Earnings Recovery on Track

Thematic (Sector/Industry)

<ul><li>Apple introduced four new iPhone 15 models (15/15 Plus, 15 Pro/Pro Max), featuring major camera upgrade (periscope lens), 3nm A17 Pro chips, titanium alloy casing, USB-C socket, customizable action button, and spatial video support for Vision Pro display.</li><li>Apple also updated two Apple Watch (Series 9, Ultra 2). We believe most spec are in-line with expectations, and no price hike for all models (same storage) will be positive to share gain.</li><li>For stocks, given major upgrades in camera, USB-C and mid-frame casing, we prefer Apple supply chain such as Luxshare for iPhone/Watch OEM share gain, BYDE for titanium casing upgrade trend (Jabil), Tongda for structural component upgrade, FIT Hon Teng for USB-C adoption, and Sunny Optical/Cowell for improved camera (periscope).</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 introduced four new iPhone 15 models (15/15 Plus, 15 Pro/Pro Max), featuring major camera upgrade (periscope lens), 3nm A17 Pro chips, titanium alloy casing, USB-C socket, customizable action button, and spatial video support for Vision Pro display.Apple also updated two Apple Watch (Series 9, Ultra 2). We believe most spec are in-line with expectations, and no price hike for all models (same storage) will be positive to share gain.For stocks, given major upgrades in camera, USB-C and mid-frame casing, we prefer Apple supply chain such as Luxshare for iPhone/Watch OEM share gain, BYDE for titanium casing upgrade trend (Jabil), Tongda for structural component upgrade, FIT Hon Teng for USB-C adoption, and Sunny Optical/Cowell for improved camera (periscope).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 Launch Event: IPhone 15/Apple Watch Inline

<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

<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

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)