FIT HON TENG(6088.HK):RECENT CORRECTION OVERDONE; 3Q23 EARNINGS RECOVERY ON TRACK
FIT HON TENG(6088.HK):RECENT CORRECTION OVERDONE; 3Q23 EARNINGS RECOVERY ON TRACK
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. We are also positive on FIT's 3Q23 results on 9 Nov. We estimate 3Q revenue/net profit to continue QoQ recovery with -8%/+2% YoY (vs. -12%/-99% YoY in 2Q23), largely in-line with guidance. Looking into 2H23E, we expect earnings recovery to continue backed by better product mix (CPU socket, DDR5/high-speed connectors, auto deal) and share gain in iPhone 15. Reiterate BUY. Upcoming catalysts include 3Q23 results on 9 Nov, server product launch, auto biz integration and TWS project wins.
在昨天（10月24日）股價調整11％之後，我們採訪了FIT的mgmt.，這主要是由於有消息稱中國稅務機關和自然資源部對鴻海在中國的主要運營基地進行了檢查。Mgmt. 表示，稅務檢查是年度例行工作的一部分，所有企業都照常運營。我們認爲，儘管檢查工作持續懸而未決，但股價修正還是過分了，估值變得有吸引力，爲23/24財年市盈率的7.0倍/5.6倍（低於5年平均水平1秒），而24/25財年的每股收益增長了24％/25％。我們也對FIT在11月9日公佈的3季度業績持樂觀態度。我們估計第三季度收入/淨利潤將繼續同比復甦，同比爲-8％/+2％（而23年第二季度同比爲-12％/-99％），基本符合預期。展望 2H23E，我們預計，在更好的產品組合（CPU 插槽、DDR5/高速連接器、汽車交易）和 iPhone 15 的股價上漲的支持下，收益將繼續復甦。重申買入。即將到來的催化劑包括11月9日公佈的23年第三季度業績、服務器產品發佈、汽車業務整合和TWS項目獲勝。
3Q23 preview: QoQ earnings recovery on track. We estimate 3Q23E revenue/net profit of US$1,176mn/50.5mn (-8%/+2% YoY). By segment, we expect smartphone/networking/computing/EV mobility/system product to deliver -10%/-35%/+13%/+90%/-10% YoY, given weak smartphone/CE demand along with product mix changes in networking segment. Computing segment is boosted by new product orders and mild PC market recovery, while EV mobility segment will benefit from auto deal consolidation. We expect 3Q23 net margin will recover to 4.3% (vs. -1.1%/0.04% in 1Q/2Q23) backed by improving product mix and less expense burden.
23 年第 3 季度預覽：季度收益復甦步入正軌。我們估計，3Q23E 的收入/淨利潤爲11.76億美元/5,050萬美元（同比下降8％/增長2％）。鑑於智能手機/消費電子設備需求疲軟以及網絡領域的產品組合變化，按細分市場劃分，我們預計智能手機/網絡/計算/電動汽車出行/系統產品將同比交付-10％/-35％/+13％/+90％/-10％。計算領域受到新產品訂單和個人電腦市場溫和復甦的推動，而電動汽車出行領域將受益於汽車交易整合。我們預計，在產品組合改善和支出負擔減少的支持下，2023年第三季度的淨利潤率將恢復至4.3％（而23年第一季度/第二季度爲-1.1％/0.04％）。
2H23E outlook: auto business consolidation, iPhone launch, new CPU socket and DDR5 connectors. Mgmt. guided higher-margin auto business consolidation will accelerate margin recovery in 2H23E, and we also expect revenue upside from new CPU socket, DDR5 connector and new iPhone launch in 2H23E. In terms of opex, we estimate FIT's opex ratio to peak at 14% in FY23E and then moderate to 13.2%/12.8% in FY24/25E.
2H23E 展望：汽車業務整合、iPhone 上市、新的 CPU 插槽和 DDR5 連接器。Mgmt. 指導的更高利潤率的汽車業務整合將加速 2H23E 的利潤回升，我們還預計，新的 CPU 插槽、DDR5 連接器和 2H23E 推出的新款 iPhone 將帶來收入上漲。在運營支出方面，我們估計FIT的運營支出比率將在 FY23E 達到峯值，爲14％，然後在24/25財年溫和至13.2％/12.8％。
Attractive risk/reward after recent correction; Reiterate BUY. While overhang over inspection may remain in the near term, we think current valuation at 7.0x/5.6x FY23/24E P/E is attractive (1-sd below 5-year avg.), given our positive view on 3Q23 earnings recovery and multiple growth drivers in FY24. We maintain our TP of HK$2.06 based on 11x FY24E P/E (33% below 5-year hist. avg.). Upcoming catalysts include 3Q23 results on 9 Nov, new product ramp-up, auto business consolidation and TWS order wins.
近期修正後有吸引力的風險/回報；重申買入。儘管短期內可能仍存在懸而未決的檢查問題，但鑑於我們對23財年第三季度的收益復甦和24財年的多種增長驅動因素持積極看法，我們認爲目前估值爲7.0x/5.6倍的23/24財年市盈率具有吸引力（低於5年平均水平1-sd）。根據11倍的 FY24E 市盈率（比5年曆史平均水平低33％），我們將目標維持在2.06港元。即將到來的催化劑包括11月9日公佈的23年第三季度業績、新產品上市、汽車業務整合和TWS訂單獲勝。
譯文內容由第三人軟體翻譯。