报告名称：FIH Mobile Limited Alert(02038.HK)Access China conference highlights 2016
报告类型：港股研究
报告日期：2016-01-13
研究机构：德意志银行
股票名称：富智康集团
股票代码：02038
页数：1
简介：2016 outlook optimistic with capacity expansion on track
FIH is positive on its 2016 outlook thanks to 1) handset assembling/casingshare gain from Huawei, 2) meaningful taking-off of India smartphonebusiness. Therefore, management indicates that the capacity expansion willcontinue in 2016, while 50%+ of the capex will be spent on handset casingpart. We like the company’s 1) organic momentum recovery, 2) solid net cashposition (~USD1.8bn), and 3) attractive valuation (trading at 8x 2016E EPS).Reiterating our Buy rating.
Delivering above seasonal strength in 1H16
FIH remains positive on its 1H16 outlook and expects its revenue momentumto be above the normal seasonality. The company attributes the strength to 1)strong inventory pull in for Huawei and Xiaomi’s new smartphone models, and2) rising India smartphone sales. FIH is winning handset assembling ordersfrom both Chinese (eg. OPPO, Huawei, Xiaomi) and local handset vendors (eg.Micromax) in India. Management expects India revenue to comprise a doubledigitrate of its total revenue in 2016 vs. only single digit in 2015.
Growing with the winner
FIH views Huawei as one of the few beneficiaries which will benefit from theconsolidation trend in China smartphone market thanks to its highcost/performance product. As the dominant partner with superior operatingefficiency/execution, FIH expects its assembling order allocation from Huaweito ramp up to 40-50% in 2016 vs. only 20-30% in 2015. Management alsoanticipates organic metal casing shipment growth this year driven by 1)Huawei’s rising metal casing adoption rate in its mid-end models, and 2) FIH’senhanced bargaining power over Huawei.
Valuation and investment risks
Our TP of HKD4.6 is based on 12x 2016 EPS (in line with regional peers).Downside risks include USD depreciation, a price war, and market share loss.
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