06088 Overview

New Product Launch: Apple has introduced the iPhone 17e and M4 iPad Air, aligning with market expectations and aimed at strengthening its position in the mid-range smartphone and tablet markets.

Consumer Attraction: CMBI suggests that Apple's steady pricing and updated specifications will attract more consumers compared to competitors facing cost pressures and product delays.

Supply Chain Insights: CMBI favors companies with significant contributions to Apple's sales, such as FIT HON TENG and AAC TECH, highlighting their roles in connectors, AirPods, and acoustics.

Investment Ratings: CMBI has provided investment ratings and target prices for various Apple supply-chain stocks, recommending buys for AAC TECH, BYD ELECTRONIC, FIT HON TENG, LUXSHARE PRECISION, and SUNNY OPTICAL.

Incident Overview: FIT HON TENG reported a compromise of its information systems due to a server attack earlier this month.

Response Actions: The company activated emergency response and recovery procedures immediately upon discovering the incident and has fully restored its operations.

Financial Impact: There has been no material impact on the Group’s financial performance as a result of the incident.

Market Activity: The company experienced short selling of $5.82 million, with a short selling ratio of 4.984%.

Company Performance: FIT HON TENG reported a 13% increase in revenue and a 9% rise in net profit for 3Q25, aligning with guidance and estimates from CMBI.

Optimistic Outlook: The management anticipates high single-digit revenue growth and a gross profit margin (GPM) of 20% for 2025.

Market Positioning: CMBI believes FIT HON TENG will benefit from expanding market share and advancements in AI server connectivity solutions, supported by its product pipeline and synergies with Hon Hai.

Target Price Adjustment: CMBI raised its target price for FIT HON TENG from HKD4.96 to HKD6.77 while maintaining a Buy rating.

Hong Kong Stock Performance: On November 11, Hong Kong stocks continued to rise, with the HSI closing at 26,696, up 47 points (0.18%), while total market turnover reached $210.231 billion.

Chip and Handset Stocks: Major chip stocks like SMIC and HUA HONG SEMI saw declines of 2.7% and 3.6%, respectively, while SUNNY OPTICAL's shipments increased by 5.7% YoY, but its share price fell slightly.

Electric Vehicle Market Update: The China Passenger Car Association reported a 1.3% month-over-month decline in new energy passenger vehicle sales for October, with BYD and SERES experiencing drops in their stock prices.

XPENG-W Surge: XPENG-W shares soared 17.9% after announcing plans for Robotaxi deployment, while other autonomous driving and radar companies also saw gains, indicating a positive trend in the sector.

Company Performance: FIT HON TENG (06088.HK) reported a revenue of USD3.629 billion for the nine months ending September 30, 2025, marking a 12% year-over-year increase.

Net Profit Growth: The company's net profit from continuing operations reached nearly USD105 million, reflecting a 3.9% increase compared to the previous year.

Short Selling Activity: The stock experienced short selling amounting to $8.71 million, with a short selling ratio of 3.292%.

Stock Price Movement: FIT HON TENG's stock price increased by 0.210, representing a rise of 3.925%.

Morgan Stanley's Forecast: Morgan Stanley estimates that FIT HON TENG's AI revenue contribution will rise from under 5% in FY2024 to approximately 25% by FY2027, leading to a compound annual growth rate (CAGR) of 16% for revenue and over 40% for net profit.

Investment Rating: The firm has initiated coverage on FIT HON TENG with an "Outperform" rating and a target price of $8, which reflects a projected price-to-earnings (PE) ratio of 22x for FY2026 and 17x for FY2027.

Market Positioning: Morgan Stanley believes FIT HON TENG is strategically positioned within the Hon Hai Group to capitalize on the growing trend of AI components.

Share Price Potential: The broker suggests that the anticipated growth in AI revenue is not yet fully reflected in the current share price, indicating that FIT HON TENG could be a significant player in AI infrastructure development.