King Wai's Financial News | CMB International issued a research report, pointing out that Fit Hon Teng (06088) announced its 3Q24 performance, with revenue/net income growing by 1% and 24% respectively compared to the same period last year, which is generally consistent with the company's previous guidance; as of the first three quarters of 2024, the company's revenue/net income increased by 10%/119% year-on-year. The company's net profit margin in the third quarter significantly increased to 5.8% (compared to 1.1%/2.0% in 1Q/2Q24). The bank believes this is mainly due to the high profit margin of the AI server business, the company's effective cost control, and the improvement in operational efficiency.

Looking ahead to 4Q24 and FY25, the bank believes that the increase in NVIDIA's GB200AI server business volume, the acquisition and consolidation of Auto-Kabel Group in the automotive electronics sector, and the expansion progress of major customer acoustic products in India will all contribute to the continuous growth of the company's revenue and net income. In terms of cost control and efficiency improvement, the company has made positive progress. The bank believes that the company's core operating profit margin for FY24E will reach 5.5% (compared to 4.9% for FY23). Overall, the bank expects the company's FY24 revenue/net income to increase by 12%/42% year-on-year.

The bank is bullish on Fit Hon Teng's revenue and profit performance prospects for FY24/25, reiterating a "buy" rating with a target price of HK$4.25.