The Zhitong Finance App learned that CMB International released a research report stating that maintaining the Hongteng Precision (06088) “buy” rating, the target price was raised 9.5% from HK$2.21 to HK$2.42.

The bank said the company is ready to benefit from the trend of artificial intelligence server (copper-based component products) connectivity. Affected by new products launched in the fourth quarter of 2023, artificial intelligence-related products (mainly copper) will account for 8%-10% of sales in 2024. The bank is positive about the growing trend of copper connections in AI servers, and expects annual network and server growth of 15% to 20% in 2024.

According to the report, the server connector and cable market TAM will reach $1.7 billion in 2025. Hongteng Precision's stock price has soared 53% since the target price was last upgraded. CMB International believes its assessment is attractive and expects more catalysts in the short term.