FIT HON TENG (6088.HK): BENEFITS OF GB200 SERVER RAMP IN 4Q24E; PROVIDES THE AI SERVER OPPORTUNITY

CMSI International · Oct 23

We identified FIT Hon Teng as the GB200 server winner in H-share tech space, given FIT is poised to benefit from GB200 server ramp in 2025, with Hon Hai being the first ODM shipping to major CSPs in 4Q24E. As GB200 NVL72/36’s key component supplier for compute tray connectors/cables, NVLink copper cables, power busbar, liquid cooling components and GPU sockets, we estimate AI server revenue will reach US$484mn/823mn, accounting for 11%/16% of FIT’s earnings in 2025/26E, in our base case (40k NVL72-eq. racks in FY25E).

In our bull case (50k NVL72, US$80k NVLink cable ASP), we forecast revenue could reach US$886mn in FY25E. Despite recent design changes and NVDA product roadmap updates, we believe potential delay would only push out demand rather than diminish it, and FIT is on track for robust growth following GB200 mass production in 4Q24E. Reiterate BUY with TP of HK$ 4.25 based on 13x FY25E P/E. Catalysts include GB200 updates and 3Q24 results in Nov.

Our analysis suggested GB200 server revenue will reach US$422mn/886mn (base/bull) in FY25E. Our base case assumes GB200 NVL72-eq. server racks to reach 40k units in 2025, and we estimate FIT’s GB200 products will generate revenue of US$422mn in FY25E. By product, we forecast compute tray connector/cables (e.g. MCIO, sockets, PCIe) and NVLink copper cables will deliver US$115mn/291mn, while other compute tray/rack components (power busbar, UQD, GPU socket) will generate revenue of US$11mn/0.6mn/4.6mn in FY25E. Together with HGX/MGX AI servers, we estimate AI server revenue will reach US$484mn/823mn in FY25E/26E.

Latest development on liquid cooling and CPO solutions. In HHTD

2024, Hon Hai, along with its subsidiaries (FII/Ingrasys/FIT), showcased its GB200 NVL72 racks and liquid cooling components, including its full UQD coupling solutions (UQD, full-flow coupling valves, rectangular connector).

FIT is also developing CPO solution and launched conceptual design of FITConn 800G high-speed connector module for AI connectivity.

GB200 server ramp in 4Q24E as upcoming catalysts; Reiterate BUY.

We reiterate our view that FIT will benefit from GB200 server rack ramp with share gains over the next few years Trading at 9.5x FY25 P/E, we think valuation remains attractive, vs 42%/63% EPS growth in FY24/25E.

Maintain BUY with TP of HK$ 4.25, based on 13x FY25E P/E

We identified FIT Hon Teng as the GB200 server winner in H-share tech space, given FIT is poised to benefit from GB200 server ramp in 2025, with Hon Hai being the first ODM shipping to major CSPs in 4Q24E. As GB200 NVL72/36's key component supplier for compute tray connectors/cables, NVLink copper cables, power busbars, liquid cooling components and GPU sockets, we estimate AI server revenue Will reach US$484mn/823Mn, accounting for 11%/16% of Fit's earnings in 2025/26E, in our base case (40k NVL72-eq. racks in FY25E).

In our bull case (50k NVL72, US$80k NVLink cable ASP), we forecast revenue could reach US$886mn in FY25E. More recent design changes and NVDA product roadmap updates, we believe potential delay would only push out demand rather than diminish it, and FIT is on track for robust growth following GB200 mass production in 4Q24E. Reiterate BUY with TP of HK$ 4.25 based on 13x FY25E P/E. Catalysts include GB200 updates and 3Q24 results in Nov.

Our analysis estimates GB200 server revenue will reach US$422mN/886Mn (base/bull) in FY25E. Our base case estimates GB200 NVL72-eq. server racks to reach 40k units in 2025, and we estimate Fit's GB200 products will generate revenue of US$422Mn in FY25E. By product, we forecast compute tray connectors/cables (e.g. MCIO, sockets, PCIe) and NVLink copper cables will deliver US$115mN/291mN, while other compute tray/rack components (power busbar, UQD, GPU socket) will generate revenue of US$11mN/0.6mN/4.6Mn in FY25E. Together with HGX/MGX AI servers, we estimate AI server revenue will reach US$484mN/823Mn in FY25E/26E.

Latest development on liquid cooling and CPO solutions. In HHTD

2024, Hon Hai, along with its aries (FII/Ingrasys/fit), showcased its GB200 NVL72 racks and liquid cooling components, including its full UQD coupling solutions (UQD, full-flow) coupling valves, connecting connectors).

FIT is also developing CPO solutions and conceptual design of FitConn 800G flexible connector module for AI connectivity.

GB200 server ramp in 4Q24E as catalysts; Reiterate BUY.

We iterate our view that FIT will benefit from GB200 server rack ramp with share gains over the next few years trading at 9.5x FY25 P/E, we think valuation remains significant, vs 42%/63% EPS Growth in FY24/25E.

Maintain BUY with TP of HK$ 4.25, based on 13x FY25E P/E

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FIT HON TENG(6088.HK)：BENEFICIARY OF GB200 SERVER RAMP IN 4Q24E;ASSESSING THE AI SERVER OPPORTUNITY

FIT HON TENG (6088.HK): BENEFITS OF GB200 SERVER RAMP IN 4Q24E; PROVIDES THE AI SERVER OPPORTUNITY

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