研究报告全文：MN16Mar2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateFITHonTeng6088HKRecentcorrectionoverdoneInvestmenttoaccelerate33strategytransitionTargetPriceHK246Wehostedapost-resultsNDRcallwithFITmgmtyesterdayandcameoutwithPreviousTPHK266apositiveviewonitsUS800mninvestmentplanforglobalexpansionand33UpDownside352strategictransformationsDespiteasofteryearinFY23EwebelieveglobalCurrentPriceHK182capacityexpansionwillallowFITtocapturenewopportunitiesinTWSandEVproductsinFY2425EWeloweredourestimatestoreflecthigherinvestmentsChinaTechnologyinFY2324EandadjustedourTPtoHK246basedonrollover11xFY24EAlexNGPEReiterateBUYUpcomingcatalystsincludePrettlacquisitionprogressand85239000881alexngcmbicomhkaudioproductorderwinsFY22in-lineSolidcomputingEVmobilitysystemproductsoffsetbyLilyYANGPhDweaknetworkingFITsFY22revenuenetprofitofUS4531mn170mn85239163716lilyyangcmbicomhk0924YoYislargelyin-linewithexpectationsandGPMimprovedto169given33strategyexpansionintohigher-marginproductClaudiaLIUcategoriesBysegmentcomputingEVMobilitysystemproductsgrewclaudialiucmbicomhk21020YoYdespiteconsumerelectronicsweaknessoffsetbyStockDatanetworkingweaknessonexitofopticalmoduleproductsInparticularMktCapHKmn132259TWSBeatsBelkinaudioproductsTeslaCPDproductsandnewE-bikeAvg3mthstoHKmn22powerconnectoraremajorgrowthdrivers52wHighLowHK246092TotalIssuedSharesmn72670Acceleratedinvestmentinto33strategydevelopmentExpectshort-SourceFactSettermpressureonprofitabilityinFY23EMgmtguidedUS800mnCapexShareholdingStructureplaninFY23EvsUS200-300mnprioryearsandtheinvestmentwillfocusFoxconnFarEastLtd712onglobalmanufacturingfootprintexpansionanddevelopmentofstrategicLuSung-Ching59SourceHKExbusinessareassuchasEVaudioproductsDespiteshort-termpressureonearningsgrowthwebelieveglobalmanufacturingexpansionwillallowFITSharePerformancetocapturestrategicopportunitiesinmajorcustomersaudioproductsandAbsoluteRelativeexpansioninEVbusinesswhichwillboostbusinessgrowthinFY24251-mth-121-643-mth-67-75Mgmtexpected33Strategyproductsrevenuemixwillincreaseto6-mth5965473040inF2325Efrom24inFY22SourceFactSetRecentcorrectionoverdoneMaintainBUYwithnewTPofHK24612-mthPricePerformanceThestockslumpedover10postearningsgivensoftguidanceinourviewWerecommendtoaccumulateonrecentweaknessgivenourpositiveviewonEVclientwinsandpotentialorderwinsinaudioprojectsOurnewTPofHK246isbasedonrollover11xFY24EPE33below5-yearhistavgTradingat101x81xFY23E24EPEwethinksofterFY23EhasbeenpricedinUpcomingcatalystsincludePrettlacquisitiondealprogressTWSorderwinsandglobalmanufacturingexpansionSourceFactSetEarningsSummaryYE31DecFY21AFY22AFY23EFY24EFY25ERevenueUSmn44904531474453265847YoYgrowth41094712398NetprofitUSmn13681703160520032354YoYgrowth221324558248175EPSReportedUScents204242230287338ConsensusEPSUSna218234283000PEx134661018169PBx0805060606Yield164400000000ROE6072667783Netgearingnana00nanaSourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk16Mar2023FY22ResultsReviewFigure1FY22resultsreviewCMBIConsensusUSmnFY19FY20FY21FY22YoYFY22EDiffFY22EDiffRevenue437243154490453114578-145390Grossprofit7545806737681473947266Operatingprofit275125177307742313319061Netprofit2354313817023185-81615EPSUSDcents35706420424219267-921811Grossmargin1721341501692ppt16208ppt1601pptOperatingmargin6329396829ppt5117ppt4226pptNetmargin5410313707ppt40-03ppt3602pptSourceCompanydataCMBIGMestimatesEarningsRevisionFigure2CMBIGMearningsrevisionsNewOldChangeUSmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue47445326na51805893na-8-10naGrossprofit840942na842967na0-3naOperatingprofit258303na267304na-30naNetprofit161201na215246na-25-18naEPSUSDcents230287na311355na-26-19naGrossmargin177177na163164na14ppt13pptnaOperatingmargin5457na5252na03ppt05pptnaNetMargin3438na4242na-08ppt-04pptnaSourceCompanydataCMBIGMestimatesFigure3CMBIGMestimatesvsconsensusCMBIConsensusDiffUSmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue474453265847478851844962-1318Grossprofit840942103477383777991333Operatingprofit258303344214243233212548Netprofit161201236175193196-8421EPSUSDcents230287338234283Na-22naGrossmargin17717717716116215716ppt15ppt2pptOperatingmargin5457594547471ppt1ppt12pptNetMargin343840373740-03ppt01ppt01pptSourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE216Mar2023Figure4RevenuebreakdownUS000FY21FY22FY23EFY24EFY25EComputing80316781970890167910188971151354YoY2101313Smartphones13067181261047128626813505811418110YoY-3255Networking879468753854648314680730714767YoY-14-1455EVMobility138894152814358645585060715714YoY101356322EVbusiness152814168095184905203395PrettlSWH-190550400155512318SystemsProducts11130451335580136229214985211648373YoY2021010Others248923207600186840192445198219YoY-17-1033Total44902154530603474403853262345846536YoY094712398SourceCompanydataCMBIGMestimatesFigure5PLforecastUSmnFY20FY21FY22FY23EFY24EFY25ERevenue431544904531474453265847YoY-1341094712398Costofsales373538173763390543844812Grossprofit5806737688409421034GPM131517181818YoY-2311611419312298SGA230266223292314339ofrev-53-59-49-62-59-58RD235301296337378409ofrev-54-67-65-71-71-70Operatingprofit125177307258303344OPM293968545759YoY-547416740-160173136Netprofit43138170161201236NPM103137343840YoY-8192238232-50248175SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE316Mar2023ValuationMaintainBUYwithnewTPofHK246Ournew12mTPofHK246isbasedonrollovered11xFY24EPE33discountto5-yearhistavggivenacceleratedgrowthon33StrategyandprobabilityrecoveryTradingat101x81xFY2324EPEwethinkrisk-rewardisattractiveUpcomingcatalystsincludePrettlacquisitionprogressApplesharegainandimprovingmarginsFigure6PeersvaluationMarketUpCapPriceTPDownPExPBxROECompanyTickerRatingUSmnLCLC-sideFY23EFY24EFY23EFY24EFY23EFY24EGlobalConnectorsTETELUSNR3874112253NANA1861613330184197AmphenolAPHUSNR448457542NANA2522295751253249FabrinetFNUSNR416911389NANA1481342824208194Aviat6807JPNR1543222100NANA126123121110295Hirose6806JPNR47031679000NANA162172171610294Luxshare002475CHBUY296242874523821651263128186224ChengUei2392TTNR6493880NANA87-08-89-Foxconn2354TTNR24355270NANA12011205055759HonHai2317TTNR4642410250NANA91830908103110Average1491432222143153ChinatechnologyFITHonTeng6088HKBUY1690182246351018206066677AACTech2018HKHOLD25471668156-615311608075162SunnyOptical2382HKHOLD12024860592572371953329138147Tongda698HKBUY14001102952828010130-BYDE285HKHOLD59562075204-215195151399142Qtech1478HKBUY61140552288463080898120TKGroup2283HKBUY1651553411830360606207179YOFC6869HKNR28241496NANA73660908114110Cowell1415HKNR18071690NANA1761282622203222Average121901211103291SourceBloombergCMBIGMFigure712MforwardPEbandFigure812MforwardPBband6035555030452540352030251520101510055000Jul-17Jul-18Jul-21Jul-22Jul-19Jul-20Oct-17Apr-18Apr-19Oct-19Apr-20Oct-20Apr-21Oct-21Oct-18Apr-22Oct-22Jan-18Jan-19Jan-20Jan-21Jan-23Jan-22Jul-17Jul-18Jul-20Jul-21Jul-22Jul-19Oct-17Apr-18Oct-18Apr-19Oct-19Oct-20Oct-21Apr-22Oct-22Apr-20Apr-21Jan-19Jan-20Jan-23Jan-18Jan-21Jan-221-yrForwardPEMean1-yrForwardPBMeanMean1SDMean-1SDMean1SDMean-1SDSourceCompanydataCMBIGMSourceCompanydataCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE416Mar2023FinancialSummaryINCOMESTATEMENT2020A2021A2022A2023E2024E2025EYE31DecUSmnRevenue431544904531474453265847Costofgoodssold373538173763390543844812Grossprofit5806737688409421034Sellingexpense9710593109128140Adminexpense134161130183186199RDexpense235301296337378409Others117058475358Operatingprofit125177307258303344ShareoflossesprofitsofassociatesJV9846464646Interestexpense121412108Pre-taxprofit117167248201247291Incometax743178404755Minorityinterest011111Netprofit43137170160200235BALANCESHEET2020A2021A2022A2023E2024E2025EYE31DecUSmnCurrentassets284830342764271629213395Cashequivalents766769914426676668Accountreceivables872103372011159451317Inventories944982967101211371248STbankdeposits1269866666666Non-currentassets179119731783223822552235PPE728823753120812251205Deferredincometax135133131131131131InvestmentinJVsassos24172123123123123Intangibles709634601601601601Othernon-currentassets195211175175175175Totalassets463950074547495451775630Currentliabilities179019371539178618082026Short-termborrowings604690453453453453Accountpayables10321138971121812401458Taxpayable1299498989898Othercurrentliabilities261518181818Non-currentliabilities659674661661661661Long-termborrowings575576575575575575Obligationsunderfinanceleases294643434343Othernon-currentliabilities555243434343Totalliabilities244926112200244724692687Sharecapital135139142142142142Otherreserves214523482295245526562891Totalshareholdersequity219023962347250727082943Minorityinterest312222Totalequityandliabilities463950074547495451775630PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE516Mar2023CASHFLOW2020A2021A2022A2023E2024E2025EYE31DecUSmnOperatingProfitbeforetaxation117167248201247291Depreciationamortization241146270345383420Taxpaid393178404755Changeinworkingcapital2799316119468264Others741040000Netcashfromoperations11585602311651391InvestingCapitalexpenditure335241200800400400Acquisitionofsubsidiariesinvestments000000Others214610000Netcashfrominvesting356220200800400400FinancingDividendpaid0300000Netborrowings0860000Proceedsfromshareissues000000Sharerepurchases100000Others73650000Netcashfromfinancing711200000NetchangeincashCashatthebeginningoftheyear892766769914426676Exchangedifference4300000Cashattheendoftheyear766769914426676668GROWTH2020A2021A2022A2023E2024E2025EYE31DecRevenue1341094712398Grossprofit2311611419312298Operatingprofit547416740160173136Netprofit818221324558248175PROFITABILITY2020A2021A2022A2023E2024E2025EYE31DecGrossprofitmargin134150169177177177Operatingmargin293968545759ReturnonequityROE206072667783GEARINGLIQUIDITYACTIVITIES2020A2021A2022A2023E2024E2025EYE31DecNetdebttoequityxnanana00nanaCurrentratiox161618151617Receivableturnoverdays737840580858648822Inventoryturnoverdays923939938946946946Payableturnoverdays10081088942113810321106VALUATION2020A2021A2022A2023E2024E2025EYE31DecPE551134661018169PB110805060606Divyield399164400000000SourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE616Mar2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBISwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE7