[ET Net News Agency, 25 November 2019] Goldman Sachs lowered its target price for FIT
Hon Teng (06088) to HK$3.9 from HK$4.5 and maintained its "buy" rating.
The research house said FIT has recently changed its optical transceiver business from a
module maker to an ODM supplier, returning the R&D team to Avago/Broadcom. Management said
they see a better return on ODM.
Management guided no significant impact on their business outlook given that optical
transceiver is still a small business, and the revenues should not change much under the
new business model, while GM will be lower; nevertheless, the opex ratio will be lower too
due to reduced R&D expenses.
Goldman lowered its net income by 4%/13%/21% for 2019-21, mainly on lower revenues, GM
and opex ratio to reflect the slower-than-expected adoption of 400G optical transceiver,
and a lower R&D burden. (KL)
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06088 FIT HON TENG
Nominal 
1.980 +0.060 (+3.125%) Others
25/11/2019 17:22
{I-bank focus}Goldman trims FIT Hon Teng (06088) to HK$3.9
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