[ET Net News Agency, 2 August 2019] Goldman Sachs initiated coverage on FIT Hon Teng
(FIT)(06088) with a target price of HK$4.5 and a "buy" rating.
The research house sees FIT's faster-growing, higher-margin optical transceiver business
as a key earnings driver, while its long-established cable and connectors business (50% of
2021 Net Profit) provides stability.
Goldman expects optical transceiver to enjoy growing market demand and specification
upgrade, from 100G to 400G under the upcoming 5G era. The product enjoys 20-30% GM versus
FIT's blended GM at 17.7% in 2018, supporting FIT's earnings growth.
It forecast EPS CAGR (2019-2021) of 24% with optical transceiver GP CAGR at 54%. (KL)