Zhaoyin International released a research report stating that it maintains a “buy” rating on Fit Hon Teng Precision (06088) and the target price is pending adjustment. Overall, the bank is bullish on Fit Hon Teng Precision due to the emergence of diverse growth drivers in the second half of 2024 and 2025, benefiting from the strong growth of AI servers, the upcycle of AI mobile phone/PC, progress in new projects in the auto business, and synergies with parent company Foxconn in AI servers and iPhone business. The current share price of the company corresponds to a multiple of 14.3x/10.8x FY24/25E price-earnings ratio, and the bank believes that the valuation level is still attractive.

At the technology enterprise day event held by CMBI on June 25th, the bank held an online meeting with the management of Fit Hon Teng Precision. Regarding the company's 2Q24/FY24E performance guidance, the management stated that the current business development of the company is basically in line with the previous guidance and there is potential for improvement in mobile and network interconnect business. Considering the upgrade of AI functions in Apple's iPhone, the company has a positive attitude towards this year's and next year's expected shipment volume of iPhone and expects it to have a positive impact on the company's related business. In addition, in terms of AI server interconnect products, besides the value product number content of each computing board priced at $500-$1000 previously indicated by the company, the management also stated that there is potential for value improvement in the company's high-speed connection products on the backplane harness and switch boards.

Looking ahead to 2025, the core drivers of growth for the company will continue to be the continuous increase in AirPods, AI server-connected products, and auto business. In February of this year, the company's first Vietnamese AirPods production line reached full capacity. The management stated that the company will build six additional production lines in India in the future to support the production capacity of large customer products, and the time for these production lines to reach capacity is expected to be in 2025. In addition, the company recently announced its joint venture with StarCharge New Energy Technology Co. Ltd. to expand the charging pile and station market, and the company plans to cooperate with local governments in Europe on a charging pile project in 2025.