---
endpoint: analytics
pattern: Technology
status: done
latency_ms: 231695
conversation_id: 9b2c978c-af5a-491b-8e0f-bf2d90dc957f
citations: 10
created: 2026-05-31 21:48:41Z
---

# Is CLSA incrementally more positive/negative on FII. If so, why?

**CLSA is incrementally MORE NEGATIVE on FII (Foxconn Industrial Internet, 601138.SH) in its most recent note (2 May 2025) — a meaningful de-rating versus prior quarters, despite operationally "on-track" 1Q25 delivery.**

Note on coverage: FII is a mainland China-listed name, so this is CLSA-parent coverage (analyst Tony Zhang, CFA, `@clsa.com`), not CLST. Corpus latest FII standalone note in the library is dated **2 May 2025** — read "latest" relative to that.

---

## The shift in CLSA's stance: TP cut ~29% even as rating held

In the most recent dedicated note ("FII – O-PF, On track delivery", 2 May 2025), CLSA:

- **Cut 12-month TP from Rmb28.80 to Rmb20.30** (about –29%), with implied potential narrowed to just **+12%** [3].
- **Reduced target PE from 16x to 14x** (multiple compression, not earnings cuts — 25/26CL earnings were kept unchanged) [1].
- Maintained the **Outperform** (O-PF) rating [1][2].

This sits well below the peak-bullish stance of mid-2024, when the team was on **BUY with TP Rmb34.40** ("Strong growth drivers", 16 May 2024) [7]. So on a peak-to-trough basis, CLSA's TP on FII has come down ~41% (Rmb34.40 → Rmb20.30) over the past 12 months.

### Target-price trajectory across CLSA's FII notes

| Note (Tony Zhang, CLSA) | Date | Rating | 12M TP | Δ vs prior |
|---|---|---|---|---|
| Strong growth drivers | 16 May 2024 | BUY | Rmb34.40 | — [7] |
| Removed from UVL | 5 Jul 2024 | O-PF | Rmb34.40 | unch [9] |
| Mixed bag (2Q24) | 13 Aug 2024 | O-PF | Rmb26.00 | –24% [6] |
| Decent delivery (3Q24) | 30 Oct 2024 | O-PF | Rmb28.80 | +11% [5] |
| On track delivery (FY24/1Q25) | 2 May 2025 | O-PF | Rmb20.30 | –29% [3] |

The 5-Jul-2024 "O-PF" label appears alongside an unchanged Rmb34.40 TP and a flagged-positive UVL development [8][9], consistent with CLSA's house rating nomenclature change rather than a thesis derate at that point — the real thesis-driven derate began with the **August 2024 "Mixed bag" TP cut to Rmb26.00** [6] and culminated in the **May 2025 cut to Rmb20.30** [3].

---

## Why CLSA is more cautious in the latest note

The May 2025 note frames a clear duality — **delivery is fine, but the multiple isn't supported by the medium-term outlook**:

1. **Concern over AI Capex growth slowdown in 26CL** — the analyst explicitly cited this as a key reason to lower the target multiple [1][2]. The team is no longer comfortable applying mid-cycle multiples to a 2026 earnings base they expect to be growth-decelerating.
2. **Near-term tariff policy uncertainty for the Apple-related business** — flagged as a second driver of the multiple compression [1]. CLSA notes the AI server business is largely insulated (Mexico factories), but Apple-related capacity is exposed [1].
3. **GB200 ramp friction** — the analyst writes that "GB racks' mass production seems still not very smooth" [1], which is a notable softening from October 2024's "first vendor to deliver globally" GB200 framing [5].
4. **Operating performance is actually on track** — 2024 net profit +10% YoY to Rmb23.2bn, 1Q25 revenue +35% YoY, NP +25% YoY, AI server revenue +162% YoY in 2024 to Rmb153.0bn (25% of revenue, +13ppt YoY) [2]. So **the de-rating is multiple-driven, not delivery-driven**.
5. **Share-price context corroborates the more cautious tone** — by the 2 May 2025 print, FII was down **26.3% absolute / 42.6% relative to the CEI over 12M** [4], confirming the market had already begun discounting the medium-term concerns CLSA is now reflecting in TP.

---

## Bottom line

Yes — CLSA is **incrementally more negative on FII** than it was 6-12 months ago. The directional rating (Outperform) has been held, but the analytical posture has moved from "AI ODM beneficiary with TP upside of +34%" [7] in May 2024 to a much more guarded **+12% TP upside** [3] with explicit calls on 2026 AI capex deceleration and tariff exposure to the Apple book [1]. The dynamic is essentially: **execution is intact, but the multiple investors are willing to pay is shrinking, and CLSA is now reflecting that**.

If the user is looking for inflection points to watch:
- A re-acceleration in hyperscaler 2026 capex guidance would directly attack reason #1 for CLSA's multiple cut.
- Smoother GB200 mass-production trajectory would reverse reason #3.
- Clarity on Apple-China tariff treatment would relieve reason #2.

---
**Sources**
[1] FII – O-PF (On track delivery) — CLSA (2 May 2025) — 607957908LinqAlpha.PDF (Valuation revise-down paragraph)
[2] FII – O-PF (On track delivery) — CLSA (2 May 2025) — 607957908LinqAlpha.PDF (Results in-line / AI server ramp paragraph)
[3] FII – O-PF (On track delivery) — CLSA (2 May 2025) — 607957908LinqAlpha.PDF (TP table: Rmb20.30, +12%)
[4] FII – O-PF (On track delivery) — CLSA (2 May 2025) — 607957908LinqAlpha.PDF (Stock performance table)
[5] FII – O-PF (Decent delivery) — CLSA (30 Oct 2024) — 607942680LinqAlpha.PDF (TP raised to Rmb28.80)
[6] FII – O-PF (Mixed bag) — CLSA (13 Aug 2024) — 607936225LinqAlpha.PDF (TP cut to Rmb26.00)
[7] FII – BUY (Strong growth drivers) — CLSA (16 May 2024) — 607929892LinqAlpha.PDF (TP Rmb34.40, +34%)
[8] FII – O-PF (Removed from UVL) — CLSA (5 Jul 2024) — 607933244LinqAlpha.PDF (UVL removal commentary)
[9] FII – O-PF (Removed from UVL) — CLSA (5 Jul 2024) — 607933244LinqAlpha.PDF (TP Rmb34.40, +26%)
[10] FII – O-PF (Removed from UVL) — CLSA (5 Jul 2024) — 607933244LinqAlpha.PDF (Valuation details: 22x 2025CL PE)

## Citations

- [1] **607957908LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957908LinqAlpha.PDF>
- [2] **607957908LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957908LinqAlpha.PDF>
- [3] **607957908LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957908LinqAlpha.PDF>
- [4] **607957908LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957908LinqAlpha.PDF>
- [5] **607942680LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/10/607942680LinqAlpha.PDF>
- [6] **607936225LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/08/607936225LinqAlpha.PDF>
- [7] **607929892LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/05/607929892LinqAlpha.PDF>
- [8] **607933244LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/07/607933244LinqAlpha.PDF>
- [9] **607933244LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/07/607933244LinqAlpha.PDF>
- [10] **607933244LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/07/607933244LinqAlpha.PDF>

