CITIC Securities has issued a research report stating that it projects Karrie International (HKEX: 01050) to achieve revenues of HK$4.55 billion, HK$5.58 billion, and HK$6.84 billion for the fiscal years 2026/27, 2027/28, and 2028/29, respectively. The profit attributable to the company's equity holders is forecasted to be HK$470 million, HK$660 million, and HK$910 million for the same periods, corresponding to price-to-earnings ratios of 9x, 6x, and 5x. Consequently, the firm reiterates its "Buy" rating on the stock.
The assessment follows the release of the company's annual report for the fiscal year 2025/26. During that fiscal year, the company reported revenue of HK$3.470 billion, marking a year-on-year increase of 7.4%. Profit attributable to equity holders reached HK$271 million, representing a significant growth of 32.5%.
Key Analysis Points
For the fiscal year 2025/26, the company experienced rapid growth and enhanced profitability. This performance was primarily driven by increased demand for AI server products, optimization of the product portfolio, and improved operational efficiency at its Thailand production base. In response to opportunities within the AI industry, the company has actively expanded its range of AI-related product categories and secured high-quality customers. Notably, ASIC-related server products began mass delivery in the second half of the 2025/26 fiscal year. The proportion of revenue from AI-related server products within the total server chassis segment rose from approximately 3% in the 2024/25 fiscal year to about 12% in the 2025/26 fiscal year. The AI business has commenced as the core growth engine for the company, fostering an optimistic outlook for overall expansion.
Rapid Performance Growth with AI as the Core Driver
For the fiscal year ending March 31, 2026, the company achieved revenue of HK$3.470 billion, a 7.4% increase year-on-year. Gross profit amounted to HK$570 million, up 20.7%, while profit attributable to equity holders was HK$271 million, surging by 32.5%. It is noted that the company incurred a loss of approximately HK$39.352 million from the sale of a subsidiary and recognized a gain of about HK$6.903 million from fair value changes on convertible bonds during the period.
The swift performance growth is largely attributed to rising demand for AI-related server products, coupled with product mix enhancements and efficiency gains at the Thailand facility, which collectively boosted overall profitability. The company's consolidated gross profit margin for the fiscal year was 16.4%, an improvement of 1.8 percentage points compared to the previous year.
On the expense side, distribution and selling expenses were HK$30.74 million, up 12.0% year-on-year. General and administrative expenses reached HK$162 million, a 33.6% increase. Financial expenses, however, decreased by 18.5% to HK$31.34 million.
Analyzed by segment for the 2025/26 fiscal year: The server chassis segment (covering both general-purpose and AI servers) generated revenue of HK$1.967 billion, a 7.1% increase. The general-purpose server chassis business provides a stable foundation, while growth was driven by rising demand for AI servers and the mass delivery of ASIC-related products. The segment's gross margin was 24.4%, up 3.4 percentage points, primarily benefiting from a higher proportion of AI-related server products and lower raw material costs.
Revenue from electric vehicle charging station enclosures and other products was HK$234 million, a 23.4% increase, supported by steady global progress in new energy and EV infrastructure. The segment's gross margin was 20.3%, down 3.1 percentage points, mainly due to changes in the product mix and variations in the delivery schedule for specific items.
The storage products segment reported revenue of HK$1.268 billion, up 5.3%, with a gross margin of 3.3%, slightly down by 0.2 percentage points. This business has collaborated with its major client for over two decades, operating on a "cost-plus" model. With increasing long-term data storage needs from data centers and heightened demand for backup and archival storage capacity from major cloud service provider clients, demand for related tape drive data storage products remains stable with a slight upward trend, continuing to provide the company with a steady cash flow.
AI Share of Server Chassis Rises to 12%, Fostering Positive Outlook
AI demand is driving both volume and price increases in the server chassis market. As a leading player in the global server chassis manufacturing market, the company is strategically positioned to capitalize on AI industry opportunities through active product diversification and client expansion.
In January 2026, the company disclosed updates on its business with two major AI clients. It has been receiving orders for server chassis products, including network switch enclosures, AI computer cases, and server racks, from a leading AI enterprise since the third quarter of 2025, with deliveries scheduled throughout 2026. Concurrently, mass production of server chassis products for an ASIC client commenced in the third quarter of 2025, with delivery volumes ramping up rapidly in the second half of the year.
The company's AI business is progressing smoothly, supporting an optimistic growth outlook. With the commencement of mass deliveries for ASIC-related server products in the second half of the 2025/26 fiscal year, the proportion of AI-related server products within the company's total server chassis revenue increased from around 3% in the 2024/25 fiscal year to approximately 12% in the 2025/26 fiscal year.
Looking ahead, rack-related products are identified as a key area for future expansion. The company is also continuously developing cooling structural components, CDU (Cooling Distribution Unit) supporting parts, and power-related structural accessories. This strategy aims to actively capture the trend in data centers towards higher power density and rack-level deployment.
Comments