FIT Hon Teng reported FY24 revenue growth of 6% which was largely in-line, while net profit growth of 19% YoY was below our/market expectations due to higher opex and one-off expenses. Looking into 2025, we believe mgmt. guidance is solid with low double-digit revenue growth, high-teens gross profit growth, and 5% operating margin (lower opex %). However, stock price was down given 1) potentially softer 2025 sales growth than 20% 3-yr sales CAGR guidance, 2) networking/Airpods ramp-up visibility in 2025, 3) weaker OPM improvement. Following our NDR meetings with mgmt. yesterday (13 mar), we believe the order outlook and project wins remain on track, and with 25% share price correction in past month (vs. HSI +4%), we think long-term entry point has emerged. Maintain BUY with new TP of HK$3.86 based on same 14.1x FY25E P/E.
　　Inline 2024 results; solid 2025 guidance with networking/Airpods ramp-up into 2026/27. FIT’s FY24 revenue (+6% YoY) was largely in-line while net profit (+19% YoY) was below expectations due to higher opex and one-off M&A- related expenses. By segment, networking/EV/computing grew 39%/ 58%/5% YoY driven by strong AI server, Voltaira/Kabel integration and PC recovery, while smartphone/system products posted -10%/flattish growth given weak CE market. For 2025, mgmt.’s overall guidance is largely in-line but that for networking/AirPods in 2025 is more conservative than market expectations as some projects are pushed out to 2026.
　　NDR takeaways: addressing investor concerns on sales guidance and networking /AirPods outlook. During our NDR meetings yesterday, mgmt. addressed several market concerns: 1) 2025 revenue growth of 19% YoY below 3-yr CARG guidance was due to smartphone headwinds and more conservative ramp-up of AI server/AirPods projects, but 2027 guidance (20% sales CAGR, high-single digit OPM) remains on track; 2) some networking revenue was pushed out to 2026, in-line with market condition of less GB200 and more GB300. 3) AirPods expansion in India is on track and investment into Goertek Vietnam is positive to associate income in 2025.
　　Execution is the key to drive re-rating in 2025; Maintain BUY. We revise down our FY25/26E EPS forecasts by 19%/10% to reflect 2025 guidance and market condition. We believe order outlook and project wins remain firm as AI server/AirPods project roadmap is well on track. Our new TP of HK$3.86 is based on same 14.x FY25E P/E. Maintain BUY. Upcoming catalysts are GTC event, AirPods launches, and GB200/GB300 progress.