Strong 2026 outlook with AI interconnect/power/thermal upgrades as key growth drivers

Strong2026 outlook withAIinterconnect/power/thermalupgradesaskeygrowth drivers Target PriceHK$7.33(Previous TPHK$6.77)Up/Downside22.0%Current PriceHK$6.01 Looking into 2026, webelieveFIT is well-positioned to benefit from architectureupgrade inGB300/VR200 serversandstrongproductpipelineininterconnect(MCIO,cable cartridge, midplane connector),power(busbar, powerwhip),liquidcooling (UQD, LC busbar)andCPOs(LGA-to-LGA socket, PLS I/O cage).WeforecastFIT’s AI-related revenue to grow at 95%CAGR in FY25-27E,accounting for18%of revenue in FY27E (vs 6% in FY25E).For4Q25/FY25E,we estimate FY25E revenue/net profit growth of 11%/11% YoY, implying 4Q25Erevenue/net profit growth of 6%/21% YoY. We expect GTC and OFC 2026inmid-Marchwill be major upcoming catalysts for the stock, as market will focuson updates on scale-up interconnect and CPO solutions.Weraiseour TP toHK$7.33based on new estimates and higher21xFY26E P/E(vs prior 20x forhigher AI mix and sector re-rating).The stock trades at17.5x/12.6x FY26/27EP/E(vs 24x for 1-sd above 8-yr avg. P/E), and we expect further re-rating onhigher AI revenue contribution in FY26-27E.ReiterateBUY. China Technology Alex NG(852) 3900 0881alexng@cmbi.com.hk Hanqing LIlihanqing@cmbi.com.hk Strongproductpipelineto boost AI content value to US$30k/rack in2027E.Driven by rapid architecture upgrade in interconnect/cooling/powersolutions for GB300/VR200, we expect FIT’sAI revenue to growat95%FY25-27E CAGR to reach 18%mix in FY27E:1)Interconnect(US$10k+/rack):share gains in MCIO/cable cartridge in 2H26E andmidplane connectors in 2027,2) Power(US$10k/rack): power busbar in2026 and power whip in 2H26E,3) Liquid cooling(US$5k-10k/rack): sharegainsin CDU UQD in 2026 and LC busbar in 2027,4) CPO/CPC:CPO(LGA-to-LGA socket, PLS I/O cage) in 2H26E and CPC 224G interconnectsolution in 2027. 4Q25Epreview:strongdatacenter/automobilesegmentsdragged bysmartphoneweakness.We estimate 4Q25E revenue/net profit ofUS$1,288mn/64.3mn(+6%/21%YoY),vs 13%/9%YoY in 3Q25.Bysegment,we expect cloud/mobility revenue to grow 34%/68%YoY,offsetting weakness of smartphone/consumer/system products (-18%/-3%/-3%YoY)in 4Q25. We expect 4Q25E GPM/NPM to recover YoY to20.2%/5.0%(vs 16.7%/4.4% in 4Q24)due to betterAI revenuemix. Strongercloud/datacentermomentumtodrivere-rating; RaiseTPtoHK$7.33.We believeFIT is on track to boost cloud/datacenter sales mixtolow/mid/high-20% in FY26/27/28E.We’veadjusted our FY25-27E EPS toreflect robust datacenter/cloud segment offset bynear-termsmartphone/CEweakness.OurnewTPofHK$7.33isbased on new estimates and higher21x FY26E P/EgivenrisingAI mix and sector re-rating.Reiterate BUY. Source: FactSet Focus charts: Source:HHTD25,CMBIGM Source:HHTD25,CMBIGM Source: Computex,CMBIGM Source: Computex,CMBIGM Source:HHTD25,CMBIGM Source:HHTD25,CMBIGM FY25Epreview Valuation MaintainBUY with new TP of HK$7.33 Wehaveadjusted FY25/26/27E EPS by-10%/+1%/+2% to factor insmartphone weaknessandAI server business momentum.We raise our TP to HK$7.33based on new estimatesand higher 21x FY26E P/E (vs prior 20x for higher AI mix andsector re-rating). The stocktrades at 17.5x/12.6x FY26/27E (vs 24x for 1-sd above 8-yr avg. P/E), and we expect furtherre-rating on higher AI revenue contribution in FY26-27E.Maintain BUY. Upcoming catalystsincludeGTC 2026, OFC 2026 and 2025 results in mid-March. Source: Company data, Bloomberg, CMBIGM estimates Source: Company data, Bloomberg, CMBIGM estimates Disclosures& Disclaimers Analyst CertificationThe researchanalyst who is primary responsible for the content of this research report, in whole or in part, certifies that with respectto the securities or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neitherthe analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to thedate of issueof this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies covered in this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next 12 monthsHOLD: Stock with potential return of +15% to-10% over next 12 monthsSELL: Stock withpotential loss of over 10% over next 12 monthsNOT RATED: Stock is not rated byCMBIGM :Industry expected to outperform the relevant broad market benchmark over next 12 months:Industry expectedto perform in-line with the