鸿海精密（7769.TW）2Q26营收创纪录且利润率有上行潜力

Hon Precision (7769.TW) Record 2Q26 revenues with margin upside potential CITI’S TAKEHon’s Jun revenues came in stronger than expected at NT$5,302mn (+106% YoY and +28% MoM), concluding 2Q26 sales at a record high ofNT$13,794mn (+101% YoY/+29% QoQ), beating our and street’s(Bloomberg) forecast by 19%/12%. We believe the strong performance ismainly driven by better than expected demand from cold plates productand solid ATC handler sales for its key GPU and ASIC clients. With bettersales mix (higher cold plates contribution) and stronger operatingleverage, we see upside potential to Street’s 2Q margin numbers. Lookingahead, with continued workforce additions and new capacity ramp(stronger ramps from 4Q26 with its newly acquired Daya plant to startproduction), we expect Hon’s QoQ revenues growth to accelerate in thecoming quarters. Long-term, we are constructive on Hon’s growth outlooksupported by its multi-year AI GPU/ASIC and CPU projects, and seeupside opportunity from its strong development in CPO insertion 4business. Nicholas LaiAC+886-2-8726-9093nicholas.lai@citi.com Laura (Chia Yi) Chen+886-2-8726-9090laura.cy.chen@citi.com Jack Chen+886-2-8726-9091jack1.chen@citi.com Michael Hung+886-2-8726-9092michael.hung@citi.com Catalyst Watch on Hon Precision (7769.TW) We are constructive on Hon Precision’s earnings growth outlook driven by its solid engagement in global leading AI projects.For 2Q earnings, our estimates are higher than consensus as we expect higher margins from a better sales mix and operatingleverage, which we believe could drive strong >100% YoY earnings growth. Also, though a long-term opportunity, we believeco-packaged optics (CPO) engagement with key customers could also drive significant upside potential. Hon Precision Valuation Our target price of NT$11,000 is based on a target PER multiple of 36x applied to the average of our 2027E/28E EPS estimates.Our PER target of 36x is set at 1-std above its 1-year PER average, justified by its high share of the AI/HPC testing handlermarket, which we estimate could support an earnings CAGR of 77% in 2025-28, higher than its 3-year CAGR at c40% in 2022-25. Our estimated 77% earning CAGR is also higher than the +40% average (Bloomberg consensus) of its global testingequipment peers. As its peers have been trading at average 36x PER on 2027/28 consensus EPS in the past 1 year, we believeHon Precision deserves a further re-rating to our target PER of 36x. Risks Our quantitative risk rating system, which looks at historical share price volatility, rates Hon Precision High Risk. However, weare not assigning a High Risk rating as we forecast an earnings CAGR of >75%, significantly stronger than the growth outlookfor its global peers. Also, we note its dominant position in AI/HPC handler market and expanding market TAM opportunity,which support our constructive view over its growth outlook. Key downside risks that could impede the shares from reaching our target price: 1) Global AI demand slowdown driving weakercapacity build for semiconductor equipment; 2) unexpected share losses at its major AI projects; 3) slower-than-expectedcapacity ramp at its new facilities, or the company taking a long time to find/secure new sites; 4) slower-than-expecteddevelopment of its CPO business; 5) shorter-than-expected testing time leading to lower demand for its products; 6) weakadoption of high-premium cold plate products; and 7) increasing competition from new entrants. If you are visually impaired and would like to speak to a Citi representative regarding the detailsof the graphics in this document, please call USA 1-888-500-5008 (TTY: 711), from outside theUS +1-210-677-3788 Appendix A-1 ANALYST CERTIFICATION The research analysts primarily responsible for the preparation and content of this research report are either (i) designatedby “AC” in the author block or (ii) listed in bold alongside content which is attributable to that analyst. If multiple ACanalysts are designated in the author block, each analyst is certifying with respect to the entire research report other than(a) content attributable to another AC certifying analyst listed in bold alongside the content and (b) views expressed solelywith respect to a specific issuer which are attributable to another AC certifying analyst identified in the price charts orrating history tables for that issuer shown below. Each of these analysts certify, with respect to the sections of the reportfor which they are responsible: (1) that the views expressed therein accurately reflect their personal views about eachissuer and security referenced and were prepared in an independent manner, including with respect to Citigroup GlobalMarkets Inc. and its affiliates; and (2) no part of the research analyst's compensation was, is, or will be, directly orindirectly, related to the specific recommendations or views expressed by that research analyst in this report. IMPORTANT DISCLOSURES Analysts’ compensation is de