CMBC International: Maintains Buy rating on Hongteng Precision (06088) with target price raised to HKD 7.42.

The Bank of China International released a research report stating that it maintains a "buy" rating on Hongteng Precision (06088), roughly maintaining profit forecasts. The target price has been raised from HK$7.33 to HK$7.42, based on the same 21 times 2026 forecast. Hongteng Precision's revenue for the fiscal year 2025 increased by 12% year-on-year to US$5 billion, roughly in line with expectations, with net profit increasing by 2% year-on-year to US$156 million, 8% lower than the bank's forecast and 12% lower than market consensus, mainly due to an increase in the actual tax rate. During the post-performance non-trading roadshow conference call, management reiterated their positive view on the momentum of the cloud and data center businesses, which are benefiting from large-scale AI server upgrades and the mass production of new products forecasted for 2026 to 2028. Management guided that cloud and data center revenue for 2026 is expected to increase by 70% year-on-year, and they have raised guidance on the percentage of cloud revenue for 2026 to 2028.