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59KB | 真資料圖 | BofA 評等與目標價歷史圖：深藍線為 KYUFF 股價（2024-01～2026-11），藍色階梯區塊為 PO，標註各次 PO 日期與金額（2024-01 NT$100 起，至 2026-08-08 NT$330）；灰色區為 No Coverage。屬股價／評等歷史，不嵌 lib |
原始內容
King Yuan Electronics Corp.
Testing business diversification strengthen '27 outlook at low-end valuation
Reiterate Rating: BUY | PO: 330.00 TWD | Price: 228.50 TWD
3Q26 results in line; 4Q TPU ramp offsets GPU headwind
3Q26 sales were +9% QoQ backed by healthy demand from its GPU/CPU customers and early mobile inventory builds. With higher depreciation and labor cost moving to COGS as new facility production kick off, GM dipped 190bps QoQ to 37.6% in 3Q26 but operating leverage lifted OpM 40bps QoQ to 25.8%, taking EPS to NT$2.06. 4Q26 sales is guided +7-9% QoQ, in line with our preview, due to slower GPU ramp from continued HBM4 yield issue at Hynix partially offsetting strength in AI ASICs (Google's v8t/i TPUs) and CPUs (Nvidia Vera, Google Axion and Microsoft Cobalt). Despite better business mix, the rising cost and slower UTR improvement should keep GMs stable at 36-37% in 4Q.
Solid position into 2027 across chipset and wafer testing
KYEC's '26 sales is now on track to grow 34% YoY and could further accelerate in '27 at +53% YoY from a diversifying application base across GPU, CPU, networking switches and ASICs. It is also in a strong position to capture its foundry partner's chip probing outsourcing demand in addition to higher testing unit/dollar content from its existing direct customer business. To support expansion across wafer sorting, chip testing and system level testing, the company is accelerating its clean room construction in Taiwan and has announced it will grow its testing footprint in the US. While its '27 capex could stay at elevated levels, we think the investment mix shifting toward facility should keep its depreciation under control. This along with capex-light tool consignment business model could drive its GMs to 40%+ in 1H27 and keep profitability resilient through the cycles.
Recent pullback to low-end valuation: particularly attractive
We keep EPS for '26/27/28E largely unchanged at NT$7.87/NT$15.36/NT$19.18, and reiterate our Buy rating with PO of NT$330 still based on 18x 2H27-1H28E P/E (vs. its 10-25x P/E range). Following the AI sentiment drag, the stock is trading at 15x/11x '27/28E P/E, attractive as the business downside is protected by its leadership in scale and execution for AI chipset testing even if AI investment moderates in '28.
| Estimates (Dec) (NT$) | 2024A | 2025A | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|
| Net Income (Adjusted - mn) | 7,779 | 11,016 | 10,103 | 19,724 | 24,624 |
| EPS | 6.06 | 8.58 | 7.87 | 15.36 | 19.18 |
| EPS Change (YoY) | 33.2% | 41.6% | -8.3% | 95.2% | 24.8% |
| Dividend / Share | 3.81 | 0.952 | 9.14 | 4.76 | 4.76 |
| Free Cash Flow / Share | 2.82 | (14.96) | (19.59) | 4.56 | 16.92 |
| Valuation (Dec) | |||||
| P/E | 37.71x | 26.63x | 29.04x | 14.87x | 11.91x |
| Dividend Yield | 1.67% | 0.417% | 4.00% | 2.08% | 2.08% |
| EV / EBITDA* | 25.03x | 20.45x | 13.89x | 8.14x | 6.82x |
| Free Cash Flow Yield* | 1.23% | -6.55% | -8.57% | 2.00% | 7.41% |
| * For full definitions of iQmethod SM measures, see page 7. |
This research report provides general information only. No part of this report may be used or reproduced or quoted in any manner whatsoever in Taiwan by the press or other persons without the express written consent of BofA Securities.
>> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analyst under the FINRA rules.
Refer to "Other Important Disclosures" for information on certain BofA Securities entities that take responsibility for the information herein in particular jurisdictions.
BofA Securities does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
Refer to important disclosures on page 8 to 10. Analyst Certification on page 5. Price
05 November 2026
Equity
| Key Changes (NT$) | Previous | Current |
|---|---|---|
| 2026E EPS | 7.62 | 7.87 |
| 2027E EPS | 15.08 | 15.36 |
| 2028E EPS | 19.34 | 19.18 |
| 2026E EBITDA (m) | 24,480.3 | 24,320.4 |
| 2027E EBITDA (m) | 41,356.9 | 41,499.1 |
| 2028E EBITDA (m) | 50,097.3 | 49,537.9 |
Haas Liu >> Research Analyst Merrill Lynch (Taiwan) +886 2 2376 3727
Mike Yang >> Research Analyst Merrill Lynch (Taiwan) +886 2 2376 3729 mike.c.yang@bofa.com
Cathy Hsu >> Research Analyst Merrill Lynch (Taiwan) +886 2 2376 3726 cathy.hsu3@bofa.com
Stock Data
| Price | 228.50 TWD |
|---|---|
| Price Objective | 330.00 TWD |
| Date Established | 8-Aug-2026 |
| Investment Opinion | C-1-7 |
| 52-Week Range | 187.14 TWD-350.00 |
| TWD | |
| Mrkt Val / Shares Out (mn) | 8,924 USD / 1,283.9 |
| Market Value (mn) | 293,367 TWD |
| Average Daily Value (mn) | 201.44 USD |
| Free Float | 88.9% |
| BofA Ticker / Exchange | KYUFF / TAI |
| Bloomberg / Reuters | 2449 TT / 2449.TW |
| ROE (2026E) | 16.2% |
| Net Dbt to Eqty (Dec-2025A) | 24.4% |
See inside for Glossary
iQprofile SM King Yuan Electronics Corp.
| Key Income Statement Data (Dec) | 2024A | 2025A | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|
| (NT$ Millions) | |||||
| Sales | 26,856 | 34,934 | 46,679 | 71,621 | 86,216 |
| Gross Profit | 9,344 | 12,522 | 17,882 | 30,886 | 37,920 |
| Sell General & Admin Expense | (2,316) | (2,589) | (4,412) | (5,069) | (5,959) |
| Operating Profit | 6,172 | 9,003 | 12,144 | 24,171 | 30,127 |
| Net Interest & Other Income | (201) | 1,626 | 317 | 167 | 461 |
| Associates | NA | NA | NA | NA | NA |
| Pretax Income | 5,972 | 10,629 | 12,461 | 24,338 | 30,589 |
| Tax (expense) / Benefit | (1,211) | (2,624) | (2,358) | (4,614) | (5,965) |
| Net Income (Adjusted) | 7,779 | 11,016 | 10,103 | 19,724 | 24,624 |
| Average Fully Diluted Shares Outstanding | 1,290 | 1,289 | 1,287 | 1,287 | 1,287 |
| Key Cash Flow Statement Data | |||||
| Net Income | 4,445 | 7,963 | 10,103 | 19,724 | 24,624 |
| Depreciation & Amortization | 7,324 | 7,513 | 12,176 | 17,329 | 19,411 |
| Change in Working Capital | 1,444 | (1,516) | (681) | (6,945) | 1,689 |
| Deferred Taxation Charge | NA | NA | NA | NA | NA |
| Other Adjustments, Net | 5,263 | (808) | (249) | 749 | 1,006 |
| Cash Flow from Operations | 18,475 | 13,152 | 21,349 | 30,856 | 46,730 |
| Capital Expenditure | (14,857) | (32,355) | (46,500) | (25,000) | (25,000) |
| (Acquisition) / Disposal of Investments | 167 | (1,947) | (10,852) | 0 | 0 |
| Other Cash Inflow / (Outflow) | 335 | 21,225 | 3,989 | 2,110 | 892 |
| Cash Flow from Investing | (14,355) | (13,078) | (53,363) | (22,890) | (24,108) |
| Shares Issue / (Repurchase) | 0 | 0 | 0 | 0 | 0 |
| Cost of Dividends Paid | (3,913) | (4,891) | (1,223) | (11,738) | (6,114) |
| Cash Flow from Financing | (2,781) | 4,613 | 18,571 | 5,240 | 10,890 |
| Free Cash Flow | 3,619 | (19,204) | (25,151) | 5,856 | 21,730 |
| Net Debt | 10,251 | 12,311 | 33,296 | 21,091 | (11,421) |
| Change in Net Debt | 421 | 5,231 | 33,675 | 2,794 | (17,511) |
| Key Balance Sheet Data | |||||
| Property, Plant & Equipment | 34,924 | 60,554 | 95,402 | 102,210 | 106,848 |
| Other Non-Current Assets | 7,869 | 11,705 | 28,726 | 30,295 | 30,643 |
| Trade Receivables | 6,032 | 7,203 | 9,001 | 17,057 | 16,604 |
| Cash & Equivalents | 10,329 | 17,964 | 4,531 | 17,736 | 51,248 |
| Other Current Assets | 27,557 | 3,753 | 8,143 | 10,174 | 11,809 |
| Total Assets | 86,711 | 101,178 | 145,803 | 177,472 | 217,150 |
| Long-Term Debt | 20,581 | 30,275 | 37,827 | 38,827 | 39,827 |
| Other Non-Current Liabilities | 4,512 | 4,546 | 11,123 | 12,872 | 13,261 |
| Short-Term Debt | 0 | 0 | 0 | 0 | 0 |
| Other Current Liabilities | 16,907 | 15,919 | 22,742 | 26,407 | 29,429 |
| Total Liabilities | 41,999 | 50,740 | 71,692 | 78,106 | 82,517 |
| Total Equity | 44,711 | 50,438 | 74,111 | 99,366 | 134,633 |
| Total Equity & Liabilities | 86,711 | 101,178 | 145,803 | 177,472 | 217,150 |
| iQmethod SM - Bus Performance* | |||||
| Return On Capital Employed | 7.3% | 9.1% | 9.6% | 14.4% | 14.5% |
| Return On Equity | 18.9% | 23.5% | 16.2% | 22.7% | 21.0% |
| Operating Margin | 23.0% | 25.8% | 26.0% | 33.7% | 34.9% |
| EBITDA Margin | 50.3% | 47.3% | 52.1% | 57.9% | 57.5% |
| iQmethod SM - Quality of Earnings* | |||||
| Cash Realization Ratio | 2.4x | 1.2x | 2.1x | 1.6x | 1.9x |
| Asset Replacement Ratio | 2.0x | 4.3x | 3.8x | 1.4x | 1.3x |
| Tax Rate (Reported) | 20.3% | 24.7% | 18.9% | 19.0% | 19.5% |
| Net Debt-to-Equity Ratio | 22.9% | 24.4% | 44.9% | 21.2% | -8.5% |
| Interest Cover | 14.1x | 48.5x | 17.2x | 24.7x | 30.0x |
Key Metrics
- For full definitions of iQmethod SM measures, see page 7.
Company Sector
Semiconductors
Company Description
Founded in 1987 and headquartered in Hsinchu, Taiwan, King Yuan Electronics Corp. (KYEC) is a niche Outsourced Semiconductor Assembly and Test (OSAT) company focused on IC testing services, with market shares of 3% in OSAT (IC packaging+testing, number 7 vendor) and 14% in IC testing (number 2 vendor) globally. Its capacity is mainly located in Greater China. In addition to IC testing, it has c.20% revenue exposure to IC packaging, mainly at its Chinese subsidiary and mainly for memory products.
Investment Rationale
We have a Buy rating on KYEC, in view of undervalued upside from smartphone business for both near-term and longer-term, structural opportunities in AI areas led by GPU, as well as the solid GPM/ROE expansion toward into 2025.
Stock Data
Price to Book Value
4.0x
lül
Focus tables
Exhibit 1: KYEC 3Q26-4Q26 and 2026-27 estimates BofAe vs. Street
We now model 2026/27E EPS to be NT$7.87/15.36
| 3Q26E - Actual | 3Q26E - Old | 3Q26E - Street | 4Q26E - BofAe | 4Q26E - Old | 4Q26E - Street | 2026E - BofAe | 2026E - Old | 2026E - Street | 2027E - BofAe | 2027E - Old | 2027E - Street | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales (NT$mn) | $12,142 | $12,142 | $12,123 | $13,203 | $13,115 | $13,877 | $46,679 | $46,590 | $47,417 | $71,621 | $71,281 | $70,278 |
| Sales QoQ / YoY (%) | 9.0% | 9.0% | 8.8% | 8.7% | 8.0% | 14.5% | 33.6% | 33.4% | 35.7% | 53.4% | 53.0% | 48.2% |
| Gross profit (NT$mn) | $4,560 | $4,555 | $4,620 | $4,872 | $5,050 | $5,607 | $17,882 | $18,056 | $18,710 | $30,886 | $30,831 | $29,208 |
| GMs (%) | 37.6% | 37.5% | 38.1% | 36.9% | 38.5% | 40.4% | 38.3% | 38.8% | 39.5% | 43.1% | 43.3% | 41.6% |
| Operating profit (NT$mn) | $3,133 | $2,989 | $3,250 | $3,411 | $3,453 | $4,103 | $12,144 | $12,043 | $13,087 | $24,171 | $24,028 | $22,450 |
| OpMs (%) | 25.8% | 24.6% | 26.8% | 25.8% | 26.3% | 29.6% | 26.0% | 25.8% | 27.6% | 33.7% | 33.7% | 31.9% |
| Pretax profit (NT$mn) | $3,248 | $2,884 | $3,336 | $3,329 | $3,341 | $4,208 | $12,461 | $12,109 | $13,472 | $24,338 | $23,968 | $22,687 |
| Pretax margins (%) | 26.7% | 23.8% | 27.5% | 25.2% | 25.5% | 30.3% | 26.7% | 26.0% | 28.4% | 34.0% | 33.6% | 32.3% |
| Tax expense (NT$mn) | -$603 | -$563 | -$692 | -$649 | -$652 | -$903 | -$2,358 | -$2,320 | -$2,637 | -$4,614 | -$4,605 | -$4,468 |
| Tax rate (%) | 18.6% | 19.5% | 20.7% | 19.5% | 19.5% | 21.5% | 18.9% | 19.2% | 19.6% | 19.0% | 19.2% | 19.7% |
| Net profit (NT$mn) | $2,645 | $2,321 | $2,644 | $2,680 | $2,689 | $3,304 | $10,103 | $9,789 | $10,835 | $19,724 | $19,363 | $18,218 |
| Net margins (%) | 21.8% | 19.1% | 21.8% | 20.3% | 20.5% | 23.8% | 21.6% | 21.0% | 22.8% | 27.5% | 27.2% | 25.9% |
| EPS (NT$) | $2.06 | $1.81 | $2.12 | $2.09 | $2.09 | $2.65 | $7.87 | $7.62 | $8.67 | $15.36 | $15.08 | $14.53 |
Source: BofA Global Research estimates, Bloomberg
Exhibit 2: King Yuan detailed analysis by major AI customers
We expect Nvidia to still be the main growth driver for King Yuan while Broadcom is ramping from a low base; rest of the business should see mild unit improvement and price hike on high utilization
| KYEC sales analysis | 1Q26 | 2Q26 | 3Q26 | 4Q26 | 2024 | 2025 | 2026 | 2027 |
|---|---|---|---|---|---|---|---|---|
| Nvidia revenue contribution | $4,253 | $4,767 | $5,436 | $6,553 | $4,745 | $13,113 | $21,010 | $34,117 |
| Broadcom revenue contribution | $760 | $1,234 | $1,348 | $1,640 | $1,406 | $1,810 | $4,982 | $8,770 |
| KYEC sales ex-Nvidia & Broadcom | $5,179 | $5,141 | $5,358 | $5,010 | $20,705 | $20,010 | $20,687 | $28,733 |
| KYEC total revenue (NT$mn) | $10,192 | $11,142 | $12,142 | $13,203 | $26,856 | $34,934 | $46,679 | $71,621 |
| KYEC sales QoQ/YoY | 1Q26 | 2Q26 | 3Q26 | 4Q26 | 2024 | 2025 | 2026 | 2027 |
| Nvidia | 3% | 12% | 14% | 21% | 176% | 60% | 62% | |
| Broadcom | 28% | 62% | 9% | 22% | 29% | 175% | 76% | |
| KYEC sales ex-Nvidia & Broadcom | -2% | -1% | 4% | -6% | -3% | 3% | 39% | |
| KYEC total revenue YoY | 2% | 9% | 9% | 9% | 30% | 34% | 53% | |
| Nvidia assumptions | 1Q26 | 2Q26 | 3Q26 | 4Q26 | 2024 | 2025 | 2026 | 2027 |
| Hopper GPU revenue contribution | $0 | $308 | $0 | $0 | $2,018 | $381 | $308 | $0 |
| Blackwell GPU revenue contribution | $3,287 | $3,350 | $2,798 | $2,176 | $800 | $8,726 | $11,611 | $2,084 |
| Rubin GPU revenue contribution | $0 | $122 | $1,368 | $2,872 | $0 | $0 | $4,362 | $23,239 |
| Nvidia data center GPU revenue contribution | $3,287 | $3,780 | $4,166 | $5,049 | $2,818 | $9,106 | $16,282 | $25,323 |
| Nvidia data center CPU revenue contribution | $116 | $171 | $520 | $603 | $245 | $239 | $1,410 | $2,869 |
| RTX gaming GPU revenue contribution | $850 | $816 | $751 | $901 | $1,746 | $3,768 | $3,318 | $5,925 |
| Unit/testing time analysis | 1Q26 | 2Q26 | 3Q26 | 4Q26 | 2024 | 2025 | 2026 | 2027 |
| Hopper GPU testing units ('000 units) | 0 | 600 | 0 | 0 | 4,550 | 850 | 600 | 0 |
| Blackwell GPU testing units ('000 units) | 1,865 | 1,810 | 1,350 | 1,000 | 498 | 5,861 | 6,025 | 900 |
| Rubin GPU testing units ('000 units) | 0 | 50 | 500 | 1,000 | 0 | 0 | 1,550 | 6,580 |
| Nvidia QoQ/YoY | 1Q26 | 2Q26 | 3Q26 | 4Q26 | 2024 | 2025 | 2026 | 2027 |
| Hopper GPU revenue contribution | NM | NM | -100% | NM | -81% | -19% | -100% | |
| Blackwell GPU revenue contribution | 6% | 2% | -16% | -22% | 991% | 33% | -82% | |
| Rubin GPU revenue contribution | NM | NM | 1020% | 110% | 433% | |||
| Nvidia data center GPU revenue contribution QoQ/YoY | 6% | 15% | 10% | 21% | 223% | 79% | 56% | |
| Nvidia data center CPU revenue contribution QoQ/YoY | 77% | 47% | 204% | 16% | -2% | 490% | 104% | |
| RTX gaming GPU revenue contribution QoQ/YoY | -10% | -4% | -8% | 20% | 116% | -12% | 79% | |
| Broadcom assumptions | 1Q26 | 2Q26 | 3Q26 | 4Q26 | 2024 | 2025 | 2026 | 2027 |
| TPU revenue contribution | $197 | $616 | $779 | $1,061 | $383 | $491 | $2,653 | $6,345 |
| Broadcom ex-TPU contribution | $563 | $617 | $569 | $579 | $1,023 | $1,319 | $2,328 | $2,426 |
Source: BofA Global Research estimates, company reports
il
BofA GLOBAL RESEARCH
Exhibit 3: Terms and definitions
Glossary of abbreviations/acronyms
| Term | Definition |
|---|---|
| AI | Artificial Intelligence |
| ASIC | Application Specific Integrated Circuit |
| CPU | Central Processing Unit |
| GPU | Graphic Processing Unit |
| HBM | High Bandwidth Memory |
| HPC | High-Performance Computing |
| TPU | Tensor Processing Unit |
| SoC | System on Chip |
Source: BofA Global Research BofA GLOBAL RESEARCH
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Price objective basis & risk
King Yuan Electronics Corp. (KYUFF)
We value KYEC at NT$330 per share, based on 18x 2H27-1H28E P/E, which is close to its historical average since 2010. In our view, P/E valuation is appropriate for KYEC given its strong growth in earnings over the past few years, future growth potentials with upside in total addressable market (TAM) and market share, and enhanced cash position. We think 18x P/E, which is above the average P/E level of global OSAT peers, is undemanding, in view of its better ROE profile and 2-3% dividend yield.
Downside risks are
- 1) faster-than-expected pick-up by testing peers in high-end AI area,
- 2) greater-than-expected slowdown in global smartphone/consumer electronics demand,
- 3) potential asset disposal caused by strategy shift amid the ongoing decoupling in the semis supply chain.