CMSC released a research report stating that, considering the strong demand in the data center and server markets and better-than-expected profitability from the Leoni acquisition, it forecasts TIME INTERCON's (01729) total revenue for 2025/26/27 to be HKD 11.2/16.1/20.9 billion, with net profits of HKD 740 million, HKD 1.25 billion, and HKD 1.75 billion, respectively. This corresponds to a P/E ratio of 47.3x, 28.0x, and 20.0x. The "Strong Buy" rating is maintained.
The key points from CMSC are as follows:
The company announced on February 20, 2026, the successful completion of a placement of 108,000,000 new shares under a general mandate. The shares were placed to no fewer than six placees at a price of HKD 15.22 per share. The net proceeds from the placement amounted to approximately HKD 1.635 billion.
The net proceeds from the placement are intended for the following uses: approximately 50% will support the group's strategic investments and acquisitions; around 30% will fund the development of global business and expansion of overseas operations; and about 20% will be allocated for working capital and general corporate purposes to support the group's business operations and growth.
The company is focused on consolidating its core business through a dual-track growth strategy of organic expansion and acquisitions. This involves vertical integration to strengthen control over key supply chain segments and expand manufacturing capabilities to other regions, as well as horizontal integration focusing on businesses aligned with its core competencies, including cable operations and high-growth sectors like medical technology.
The incremental capital from the placement is expected to provide strong momentum for development, facilitating expansion in core segments such as MPO, automotive, and medical. It will offer solid financial support for capacity expansion domestically and overseas, new client acquisition, upstream and downstream industry chain support, technological upgrades, and investments in cutting-edge fields, thereby accelerating the company's expansion.
Looking ahead, robust growth in AI computing demand is anticipated to drive sustained growth in the company's MPO, server, and high-speed copper cable businesses. In the automotive sector, the integration of Leoni has exceeded expectations. Benefiting from automation and intelligent enhancements and the onboarding of new clients globally, profit levels are expected to improve steadily in the coming years. The medical business is poised to benefit medium to long-term from increased demand for medical device connectivity driven by aging populations and rising health awareness. Concurrently, active investments in前沿 areas like medical wearables are expected to unlock further growth potential through both organic and acquisitive means.
The "Strong Buy" investment rating is maintained. As a key component of the ecosystem, the company is well-positioned in high-growth areas like MPO optical communication and AI servers within the data communications sector, promising high-quality growth. The automotive business, bolstered by the successful acquisition of Leoni's cable operations, is positioned to rapidly ascend as a top global automotive cable supplier. The medical equipment business represents a long-term growth avenue with substantial potential, actively exploring前沿 sectors and leveraging synergies for collaborative growth, indicating promising medium to long-term prospects.
Risk factors include potential shortfalls in computing infrastructure development, fluctuations in raw material prices, labor cost risks, and broader macroeconomic risks.