CMSC released a research report maintaining a "Strong Buy" investment rating on TIME INTERCON (01729). The company is a vital component of the Luxshare system, with an excellent position in data communication segments such as MPO optical communication and AI servers, positioning it for high-quality growth. Its automotive business, benefiting from the successful acquisition of the LEONI Cable business, is poised to rapidly ascend to become a top global automotive cable supplier. The medical equipment business represents a long-term, high-potential "long slope with thick snow," with active investments in cutting-edge sectors. Empowered by synergies within the Luxshare system, the company's medium to long-term growth prospects are promising.
Recent events include TIME INTERCON's earnings forecast released on January 16, 2026, projecting a net profit increase of 60% to 70% year-on-year for 2025. The 60%-70% year-on-year growth in 2025 earnings is driven by strong performance in the data center and server businesses, alongside contributions from the LEONI consolidation. The company anticipates its annual net profit for 2025 to grow by 60%-70%, corresponding to HKD 720-770 million. The bank attributes the revenue growth primarily to increased sales orders in the data center and server divisions within the wire assembly segment. The earnings beat expectations mainly due to a significant revenue surge in the server business, fueled by demand from domestic server clients like Alibaba and ByteDance in 2025, coupled with the better-than-expected integration effects of LEONI in the second half of the year contributing to profit growth.
Looking ahead to 2026, the persistently high demand for AI computing power construction globally is expected to drive continued growth in the company's MPO and server assembly businesses. For MPO, the company's products align with the trend towards higher fiber count and density; its MPO fiber patch cords are available in 8/12/16/24/32 cores and it has product reserves for LC/MPO and SN/SN-MT configurations. The value of new products in 2026 is expected to continue rising. With substantial and expanding MPO production capacity both domestically and internationally, and following key client Google's upward revision of its capital expenditure guidance, alongside the company's active expansion into North American and European markets, the MPO business is forecast to experience high order visibility in 2026. For servers, increased domestic investment in computing infrastructure is expected to drive steady revenue growth in the server business in 2026, while economies of scale and in-house R&D of certain components offer potential for medium to long-term profitability improvements.
The acquisitions of LEONI and Dejinchang were completed as scheduled, with the three growth drivers of computing, automotive, and medical expected to power medium to long-term growth. In July 2025, the company successfully acquired a 49% stake in LEONI's Cable Solutions business; in December 2025, it announced the completion of the Dejinchang acquisition, strengthening its global production layout and supply chain security, and furthering vertical integration. Looking forward, robust AI computing demand is anticipated to support sustained growth in the company's MPO, server, and high-speed copper cable businesses. In the automotive sector, the LEONI integration has exceeded expectations; benefiting from Luxshare's automation and intelligent manufacturing capabilities and the onboarding of new global clients, profit levels are projected to improve steadily in the coming years. The medical business is poised for medium to long-term benefits from rising demand for medical device connectivity driven by aging populations and increased health awareness, while active investments in前沿 fields like medical wearables, through both organic growth and acquisitions, are opening up new growth avenues.
Risk factors include potential shortfalls in computing infrastructure investment, fluctuations in raw material prices, labor cost risks, and macroeconomic risks.
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