EB SECURITIES: Maintains a "buy" rating on Hongteng Precision (06088), expected to continue benefiting from the growth in demand for AI data centers and automotive wiring.

EB SECURITIES released a research report stating that GigaDevice Precision (06088) is comprehensively layouting in the field of optical interconnection and is expected to open up growth space for AI data center business. The company's net profit forecast for the years 2026-2027 is maintained at 297 million/400 million USD, with an additional net profit forecast for the year 2028 at 502 million USD. The company's market value on March 12 corresponds to a PE ratio of 17x/13x/10x for the years 2026-2028. The company is expected to continue to benefit from the growth in AI data centers and automotive cable demand, and the "buy" rating is maintained. Key points from EB SECURITIES: - Revenue and net profit are expected to rise year on year in 2025. - The company achieved revenue of 5.03 billion USD in 2025, up 12.4% year-on-year; gross profit of 946 million USD, up 7.6% year-on-year, with a gross profit margin of 18.9%, down 0.8 percentage points year-on-year. - Cloud data center business revenue is growing rapidly, while smartphone business revenue is declining. - The company's guidance indicates a continuous increase in the contribution of data center business revenue, with the proportion expected to rise to over 30% by 2028. - The company's automotive (EV) business revenue increased by 94% year-on-year in 2025, mainly due to the contribution from Auto-Kabel (acquired in December 2024). - Other consumer electronics categories also saw changes in revenue, with expectations for steady growth in the coming years. - Risks include uncertainties in the recovery of the consumer electronics industry, slower progress in the AI data center business, and changes in tariff policies.