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65KB | 真資料圖 | 「Powertech monthly sales (ex-Greatek)」月營收（NT$bn）長條圖＋YoY成長率折線，橫軸 2018年7月至2026年6月 |
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原始內容
Powertech Technology
Solid earnings confirmed by 2Q results; positive implication for memory
Reiterate Rating: BUY | PO: 500.00 TWD | Price: 251.50 TWD
2Q EPS more than doubled YoY, driven by NAND
Powertech, one of Taiwan ' s largest memory packaging/testing companies, reported upcycle-level 2Q results (sales NT$23bn -up 28% YoY; GM 22%; OPM 15%; EPS NT$3.0 -up 131%). The key contributor should be NAND packaging/testing (sales up 69% YoY) followed by SiP & module (up 41%; mostly SSD assembly for Solidigm). Manufacturing costs and SG&A/R&D expenses were also well managed; thus, operating/net profits rose 90%+/100%+ YoY. That said, DRAM packaging/testing sales (mostly for commodity DDR4 and DDR5; HBM not yet) were below expectations (sales grew only +1% YoY vs 30%+ in 3Q25-1Q26. DRAM chipmakers are making greater use of in-house packaging for high-end LPDDR5 and HBM (vs more outsourced NAND and SSD backend manufacturing). Overall, Powertech ' s strong 2Q results were mostly based on NAND/SSD offsetting muted DRAM.
Constructive guidance reinforces positive memory outlook
Management provided bullish guidance not only for 2H26 (strong demand for AI server, HBM, SSD, etc.) but also 2027-28 (potentially growing new orders for advanced packaging technologies such as FC-BGA and FO-PLP). HBM packaging order (from Micron) is not yet confirmed, but high-speed / low-power LPDDR5 should be the new growth catalyst for Powertech. We assume 2027 sales mix at 20:40:40 (DRAM:NAND/SSD:logic), with DRAM contribution relatively small vs NAND/logic.
Reiterate Buy expecting record high 2027-28 earnings
Our Buy is based on above-trend earnings growth/margin alongside the memory upcycle. We tweak our EPS estimate (down 1-3% for 2026-28E vs old) based on slightly lower margin assumptions (sub-1.0%pt), but 20%+ growth is on track. Our PO of NT$500 is derived from 27x 2027-28E P/E (unchanged), which is 10-20% higher than 2024-25 peaks, as new record-high earnings are well expected even after the 2026 upturn.
| Estimates (Dec) (NT$) | 2024A | 2025A | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|
| Net Income (Adjusted - mn) | 6,789 | 5,536 | 9,758 | 12,628 | 15,712 |
| EPS | 9.05 | 7.44 | 13.13 | 16.99 | 21.14 |
| EPS Change (YoY) | -15.2% | -17.8% | 76.4% | 29.4% | 24.4% |
| Consensus EPS (Visible Alpha) | 12.45 | 16.25 | 20.14 | ||
| Dividend / Share | 7.00 | 4.50 | 8.00 | 10.00 | 12.50 |
| Free Cash Flow / Share | 17.00 | (10.02) | 1.42 | 4.94 | 7.18 |
| Valuation (Dec) | |||||
| P/E | 27.8x | 33.8x | 19.2x | 14.8x | 11.9x |
| Dividend Yield | 2.8% | 1.8% | 3.2% | 4.0% | 5.0% |
| EV / EBITDA* | 9.8x | 10.6x | 7.6x | 6.6x | 5.7x |
| Free Cash Flow Yield* | 6.7% | -3.9% | 0.6% | 1.9% | 2.8% |
| * For full definitions of iQ method SM measures, see page 15. |
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 16 to 18. Analyst Certification on page 13. Price
28 July 2026
Equity
| Key Changes (NT$) | Previous | Current |
|---|---|---|
| 2026E EPS | 13.27 | 13.13 |
| 2027E EPS | 17.17 | 16.99 |
| 2028E EPS | 21.76 | 21.14 |
| 2026E EBITDA (m) | 28,059 | 28,220 |
| 2027E EBITDA (m) | 32,655 | 32,890 |
| 2028E EBITDA (m) | 37,918 | 37,730 |
Simon Woo, CFA >> Research Analyst Merrill Lynch (Seoul) +82 2 3707 0554
simon.woo@bofa.com
Dai Shen >> Research Analyst Merrill Lynch (Hong Kong) +852 3508 7310 dai.shen@bofa.com
Matt Shin >> Research Analyst Merrill Lynch (Seoul) +82 2 3707 0534
matt.shin2@bofa.com
Stock Data
| Price | 251.50 TWD |
|---|---|
| Price Objective | 500.00 TWD |
| Date Established | 27-May-2026 |
| Investment Opinion | C-1-7 |
| 52-Week Range | 116.00 TWD-387.00 |
| TWD | |
| Mrkt Val / Shares Out (mn) | 5,914 USD / 759.1 |
| Market Value (mn) | 190,925 TWD |
| Average Daily Value (mn) | 248.23 USD |
| Free Float | 88.6% |
| BofA Ticker / Exchange | PWOGF / TAI |
| Bloomberg / Reuters | 6239 TT / 6239.TW |
| ROE (2026E) | 16.1% |
| Net Dbt to Eqty (Dec-2025A) | 12.7% |
AI : Artificial intelligence
DDR4/5
: 4 th /5 th gen DRAM
DRAM
: Dynamic random-access memory
FC-BGA
: Flip chip ball-grid array
FO-PLP
: Fan-out panel level packaging
GM/OPM:
Gross/Operating profit margin
HBM
: High bandwidth memory
LPDDR5
: Low-power DDR5
NAND
: Not-AND memory
iQ profile SM Powertech Technology
| Key Income Statement Data (Dec) | 2024A | 2025A | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|
| (NT$ Millions) | |||||
| Sales | 73,315 | 74,929 | 94,276 | 109,185 | 126,907 |
| Gross Profit | 13,991 | 12,729 | 20,264 | 24,819 | 29,384 |
| Sell General &Admin Expense | (2,809) | (2,807) | (3,113) | (3,254) | (3,417) |
| Operating Profit | 9,382 | 8,132 | 14,793 | 19,089 | 23,369 |
| Net Interest &Other Income | 1,295 | 660 | 466 | (120) | (120) |
| Associates | NA | NA | NA | NA | NA |
| Pretax Income | 10,677 | 8,792 | 15,259 | 18,969 | 23,249 |
| Tax (expense) / Benefit | (2,178) | (1,572) | (3,354) | (4,173) | (5,347) |
| Net Income (Adjusted) | 6,789 | 5,536 | 9,758 | 12,628 | 15,712 |
| Average Fully Diluted Shares Outstanding | 750 | 744 | 743 | 743 | 743 |
| Key Cash Flow Statement Data | |||||
| Net Income | 6,789 | 5,536 | 9,758 | 12,628 | 15,712 |
| Depreciation &Amortization | 12,656 | 12,257 | 13,427 | 13,801 | 14,361 |
| Change in Working Capital | 2,764 | 2,011 | (1,887) | (771) | (759) |
| Deferred Taxation Charge | NA | NA | NA | NA | NA |
| Other Adjustments, Net | 1,874 | (1,295) | (245) | 0 | 0 |
| Cash Flow from Operations | 24,082 | 18,509 | 21,054 | 25,658 | 29,314 |
| Capital Expenditure | (11,379) | (25,941) | (20,000) | (22,000) | (24,000) |
| (Acquisition) / Disposal of Investments | NA | NA | NA | NA | NA |
| Other Cash Inflow / (Outflow) | 1,514 | (82) | 1,094 | 0 | 0 |
| Cash Flow from Investing | (9,865) | (26,023) | (18,906) | (22,000) | (24,000) |
| Shares Issue / (Repurchase) | (65) | (390) | 0 | 0 | 0 |
| Cost of Dividends Paid | (5,231) | (5,172) | (3,333) | (5,924) | (7,406) |
| Cash Flow from Financing | (11,351) | 4,197 | 292 | (3,221) | (5,456) |
| Free Cash Flow | 12,703 | (7,432) | 1,054 | 3,658 | 5,314 |
| Net Debt | (3,506) | 9,051 | 6,030 | 3,649 | 1,138 |
| Change in Net Debt | (7,933) | 9,978 | (2,149) | (2,381) | (2,511) |
| Key Balance Sheet Data | |||||
| Property, Plant &Equipment | 56,588 | 70,412 | 72,423 | 78,540 | 86,179 |
| Other Non-Current Assets | 5,616 | 6,387 | 8,810 | 9,167 | 9,540 |
| Trade Receivables | 15,885 | 18,537 | 21,337 | 22,729 | 23,868 |
| Cash &Equivalents | 22,271 | 16,375 | 19,688 | 20,125 | 19,983 |
| Other Current Assets | 8,830 | 11,453 | 12,234 | 12,561 | 13,167 |
| Total Assets | 109,191 | 123,163 | 134,490 | 143,123 | 152,737 |
| Long-Term Debt | 16,887 | 25,413 | 25,198 | 23,242 | 20,576 |
| Other Non-Current Liabilities | 2,255 | 2,699 | 3,219 | 3,350 | 3,486 |
| Short-Term Debt | 1,878 | 13 | 519 | 532 | 545 |
| Other Current Liabilities | 16,478 | 23,764 | 25,457 | 26,407 | 27,392 |
| Total Liabilities | 37,498 | 51,889 | 54,394 | 53,531 | 51,999 |
| Total Equity | 71,693 | 71,275 | 80,096 | 89,592 | 100,737 |
| Total Equity &Liabilities | 109,191 | 123,163 | 134,490 | 143,123 | 152,737 |
| iQ method SM - Bus Performance* | |||||
| Return On Capital Employed | 7.9% | 7.0% | 11.1% | 13.2% | 14.9% |
| Return On Equity | 12.2% | 9.8% | 16.1% | 18.3% | 19.9% |
| Operating Margin | 12.8% | 10.9% | 15.7% | 17.5% | 18.4% |
| EBITDA Margin | 30.1% | 27.2% | 29.9% | 30.1% | 29.7% |
| iQ method SM - Quality of Earnings* | |||||
| Cash Realization Ratio | 3.5x | 3.3x | 2.2x | 2.0x | 1.9x |
| Asset Replacement Ratio | 0.9x | 2.1x | 1.5x | 1.6x | 1.7x |
| Tax Rate (Reported) | 20.4% | 17.9% | 22.0% | 22.0% | 23.0% |
| Net Debt-to-Equity Ratio | -4.9% | 12.7% | 7.5% | 4.1% | 1.1% |
| Interest Cover | NA | NA | NA | NA | NA |
Key Metrics
- For full definitions of iQ method SM measures, see page 15.
Company Sector
Semiconductors
Company Description
Headquartered in Taiwan, PTI is one of the largest OSAT firms, which packages and tests memory and logic chips. It has around 18,000 employees. The logic chip-related business operates under Greatek Electronics (fully consolidated into earnings). Management's new focus areas in packaging/testing are PLP, TSV, 3D NAND, low-power DRAM, SSD, etc.
Investment Rationale
Our Buy rating is based on strong earnings growth, driven by more value-added memory and even logic packaging solutions. 1Q/2Q26 earnings have already hit upcycle levels, posting a strong YoY growth (largely driven by NAND/SSD). We believe the memory super-cycle and customers' ongoing outsourcing trend (Micron, Solidigm/Hynix, Kioxia and Greater China's logic chipmakers) using Powertech's proven backend solutions should be the key contributors to strong earnings growth by 2028.
Stock Data
Price to Book Value
2.9x
Key charts/tables after 2Q26 results
Exhibit 1: Upcycle level of 2Q results (sales NT$23bn; up 28% YoY; GM 22%, OPM 15%, EPS NT$3.0 - up 131% YoY) seen; key contributor should be NAND packaging/testing (sales up 69% YoY) followed by SiP & module (up 41%; mostly SSD assembly for Solidigm)
Powertech - 2Q26 results vs consensus and our estimate
| NT$mn | Actual | QoQ | YoY | Cons | Act vs Cons | Our est | Act vs our est |
|---|---|---|---|---|---|---|---|
| Sales | 23,116 | 8% | 28% | 23,114 | 0% | 22,904 | 1% |
| Gross profit | 5,031 | 21% | 75% | 4,777 | 5% | 4,869 | 3% |
| Operating profit | 3,531 | 28% | 92% | 3,416 | 3% | 3,778 | -7% |
| Pretax income | 3,661 | 16% | 133% | 3,540 | 3% | 3,748 | -2% |
| Net income | 2,219 | 20% | 131% | 2,330 | -5% | 2,642 | -16% |
| FD EPS (NT$) | 2.99 | 20% | 131% | 3.11 | -4% | 3.55 | -16% |
| Implied # of shares (mn) | 743.2 | 0% | 0% | 748.2 | -1% | 743.2 | 0% |
| Margins | |||||||
| Gross margin | 21.8% | 2.3%pt | 5.8%pt | 20.7% | 1.1%pt | 21.3% | 0.5%pt |
| OP margin | 15.3% | 2.3%pt | 5.1%pt | 14.8% | 0.5%pt | 16.5% | -1.2%pt |
| Pretax margin | 15.8% | 1.0%pt | 7.2%pt | 15.3% | 0.5%pt | 16.4% | -0.5%pt |
| Net margin | 9.6% | 0.9%pt | 4.3%pt | 10.1% | -0.5%pt | 11.5% | -1.9%pt |
Source: Company, Bloomberg, BofA Global Research estimates
Exhibit 2: We assume stronger margins in 2H (GM 22-23%, OPM 17%) vs consensus (GM 21-22%, OPM 16%), while both expect similar sales growth
Powertech - 2026 quarterly earnings; our estimate vs consensus
| NT$mn | 1Q26 Actual | 2Q26 Actual | Our est | 3Q26E Cons | Diff | Our est | 4Q26E Cons | Diff |
|---|---|---|---|---|---|---|---|---|
| Sales | 21,314 | 23,116 | 24,350 | 24,654 | -1% | 25,496 | 25,112 | 2% |
| Gross profit | 4,144 | 5,031 | 5,352 | 5,231 | 2% | 5,737 | 5,425 | 6% |
| Operating profit | 2,761 | 3,531 | 4,124 | 3,811 | 8% | 4,377 | 3,976 | 10% |
| Pretax income | 3,157 | 3,661 | 4,094 | 3,906 | 5% | 4,347 | 4,096 | 6% |
| Net income | 1,844 | 2,219 | 2,734 | 2,562 | 7% | 2,961 | 2,620 | 13% |
| FD EPS (NT$) | 2.48 | 2.99 | 3.68 | 3.38 | 9% | 3.98 | 3.52 | 13% |
| Implied # of shares (mn) | 743.2 | 743.2 | 743.2 | 757.2 | -2% | 743.2 | 744.8 | 0% |
| Margins | ||||||||
| Gross margin | 19.4% | 21.8% | 22.0% | 21.2% | 0.8%pt | 22.5% | 21.6% | 0.9%pt |
| OP margin | 13.0% | 15.3% | 16.9% | 15.5% | 1.5%pt | 17.2% | 15.8% | 1.3%pt |
| Pretax margin | 14.8% | 15.8% | 16.8% | 15.8% | 1.0%pt | 17.0% | 16.3% | 0.7%pt |
| Net margin | 8.7% | 9.6% | 11.2% | 10.4% | 0.8%pt | 11.6% | 10.4% | 1.2%pt |
Source: Company, Bloomberg, BofA Global Research estimates
BofA GLOBAL RESEARCH
BofA GLOBAL RESEARCH
Exhibit 3: Our 2027 estimates are broadly more conservative than consensus, but both clearly expect upturn level Powertech - 2026-28 annual earnings; our estimate vs consensus
| 2025 | 2026E | 2026E | 2026E | 2027E | 2027E | 2027E | 2028E | 2028E | 2028E | |
|---|---|---|---|---|---|---|---|---|---|---|
| NT$mn | Actual | Our est | Cons | Diff | Our est | Cons | Diff | Our est | Cons | Diff |
| Sales | 74,929 | 94,276 | 94,194 | 0% | 109,185 | 115,237 | -5% | 126,907 | 119,684 | 6% |
| Gross profit | 12,729 | 20,264 | 19,584 | 3% | 24,819 | 25,883 | -4% | 29,384 | 27,070 | 9% |
| Operating profit | 8,132 | 14,793 | 13,964 | 6% | 19,089 | 19,541 | -2% | 23,369 | 21,589 | 8% |
| Pretax income | 8,792 | 15,259 | 14,720 | 4% | 18,969 | 20,024 | -5% | 23,249 | 21,237 | 9% |
| Net income | 5,536 | 9,758 | 9,362 | 4% | 12,628 | 13,436 | -6% | 15,712 | 14,318 | 10% |
| FD EPS (NT$) | 7.44 | 13.13 | 12.00 | 9% | 16.99 | 17.36 | -2% | 21.14 | 19.59 | 8% |
| Implied # of shares (mn) | 743.9 | 743.2 | 780.0 | -5% | 743.2 | 774.1 | -4% | 743.2 | 730.9 | 2% |
| Margins | ||||||||||
| Gross margin | 17.0% | 21.5% | 20.8% | 0.7%pt | 22.7% | 22.5% | 0.3%pt | 23.2% | 22.6% | 0.5%pt |
| OP margin | 10.9% | 15.7% | 14.8% | 0.9%pt | 17.5% | 17.0% | 0.5%pt | 18.4% | 18.0% | 0.4%pt |
| Pretax margin | 11.7% | 16.2% | 15.6% | 0.6%pt | 17.4% | 17.4% | 0.0%pt | 18.3% | 17.7% | 0.6%pt |
| Net margin | 7.4% | 10.4% | 9.9% | 0.4%pt | 11.6% | 11.7% | -0.1%pt | 12.4% | 12.0% | 0.4%pt |
Source: Company, Bloomberg, BofA Global Research estimates
BofA GLOBAL RESEARCH
Exhibit 4: Our fine-tuned 2026-28E EPS estimates (down 1-3%) are mostly based on slightly lower margin assumptions (sub-1.0%pt), but 20%+ topline growth on track
Powertech - Earnings revisions (2026-28E)
| NT$mn, NT$ | 1Q26 | 2Q26 | 3Q26E | 4Q26E | 1Q27E | 2Q27E | 3Q27E | 4Q27E | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E | 2028E | 2028E |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| EPS - fully diluted New | 2.48 | 2.99 | 3.68 | 3.98 | 3.48 | 3.69 | 4.88 | 4.94 | 11.52 | 10.67 | 9.05 | 7.44 | 13.13 | 16.99 | 21.14 | 21.14 | 21.14 |
| Old | 2.48 | 3.55 | 3.69 | 3.54 | 3.28 | 4.39 | 4.85 | 4.65 | 11.52 | 10.67 | 9.05 | 7.44 | 13.27 | 17.17 | 21.76 | 21.76 | 21.76 |
| Difference | na | -16% | 0% | 13% | 6% | -16% | 1% | 6% | na | na | na | na | -1% | -1% | -3% | -3% | -3% |
| Dividend/share | |||||||||||||||||
| New | 0.0 | 4.5 | 0.0 | 0.0 | 0.0 | 8.0 | 0.0 | 0.0 | 7.0 | 7.0 | 7.0 | 4.5 | 8.0 | 10.0 | 12.5 | 12.5 | 12.5 |
| Old | 0.0 | 4.5 | 0.0 | 0.0 | 0.0 | 8.0 | 0.0 | 0.0 | 7.0 | 7.0 | 7.0 | 4.5 | 8.0 | 10.0 | 12.5 | 12.5 | 12.5 |
| Difference | na | 0% | na | na | na | 0% | na | na | na | na | na | na | 0% | 0% | 0% | 0% | 0% |
| Shares for FD EPS | |||||||||||||||||
| New | 743 | 743 | 743 | 743 | 743 | 743 | 743 | 743 | 754 | 751 | 750 | 744 | 743 | 743 | 743 | 743 | 743 |
| Old | 743 | 743 | 743 | 743 | 743 | 743 | 743 | 743 | 754 | 751 | 750 | 744 | 743 | 743 | 743 | 743 | 743 |
| Difference | na | 0% | 0% | 0% | 0% | 0% | 0% | 0% | na | na | na | na | 0% | 0% | 0% | 0% | 0% |
| Sales | |||||||||||||||||
| New | 21,314 | 23,116 | 24,350 | 25,496 | 24,924 | 26,392 | 28,781 | 29,088 | 83,927 | 70,441 | 73,315 | 74,929 | 94,276 | 109,185 | 126,907 | 126,907 | 126,907 |
| Old | 21,314 | 22,904 | 23,766 | 23,109 | 23,635 | 25,646 | 27,970 | 28,268 | 83,927 | 70,441 | 73,315 | 74,929 | 91,093 | 105,520 | 123,266 | 123,266 | 123,266 |
| Difference | na | 1% | 2% | 10% | 5% | 3% | 3% | 3% | na | na | na | na | 3% | 3% | 3% | 3% | 3% |
| Gross margin | |||||||||||||||||
| New | 19.4% | 21.8% | 22.0% | 22.5% | 22.0% | 22.5% | 23.0% | 23.3% | 20.7% | 17.9% | 19.1% | 17.0% | 21.5% | 22.7% | 23.2% | 23.2% | 23.2% |
| Old | 19.4% | 21.3% | 22.6% | 23.0% | 22.0% | 22.5% | 23.6% | 23.0% | 20.7% | 17.9% | 19.1% | 17.0% | 21.6% | 22.8% | 23.5% | 23.5% | 23.5% |
| Difference | na | 0.5% | -0.6% | -0.5% | 0.0% | 0.0% | -0.5% | 0.3% | na | na | na | na | -0.1% | -0.1% | -0.4% | -0.4% | -0.4% |
| OP | |||||||||||||||||
| New | 2,761 | 3,531 | 4,124 | 4,377 | 4,046 | 4,363 | 5,330 | 5,350 | 12,448 | 8,154 | 9,382 | 8,132 | 14,793 | 19,089 | 23,369 | 23,369 | 23,369 |
| Old | 2,761 | 3,778 | 4,138 | 3,955 | 3,857 | 4,625 | 5,298 | 5,074 | 12,448 | 8,154 | 9,382 | 8,132 | 14,632 | 18,854 | 23,557 | 23,557 | 23,557 |
| Difference | na | -7% | 0% | 11% | 5% | -6% | 1% | 5% | na | na | na | na | 1% | 1% | -1% | -1% | -1% |
| OP margin | |||||||||||||||||
| New | 13.0% | 15.3% | 16.9% | 17.2% | 16.2% | 16.5% | 18.5% | 18.4% | 14.8% | 11.6% | 12.8% | 10.9% | 15.7% | 17.5% | 18.4% | 18.4% | 18.4% |
| Old | 13.0% | 16.5% | 17.4% | 17.1% | 16.3% | 18.0% | 18.9% | 17.9% | 14.8% | 11.6% | 12.8% | 10.9% | 16.1% | 17.9% | 19.1% | 19.1% | 19.1% |
| Difference | na | -1.2% | -0.5% | 0.1% | -0.1% | -1.5% | -0.4% | 0.4% | na | na | na | na | -0.4% | -0.4% | -0.7% | -0.7% | -0.7% |
| Net non-op income | |||||||||||||||||
| New | 396 | 130 | -30 | -30 | -30 | -30 | -30 | -30 | 1,192 | 3,890 | 1,295 | 660 | 466 | -120 | -120 | -120 | -120 |
| Old | 396 | -30 | -30 | -30 | -30 | -30 | -30 | -30 | 1,192 | 3,890 | 1,295 | 660 | 306 | -120 | -120 | -120 | -120 |
| Difference | na | na | 0% | 0% | 0% | 0% | 0% | 0% | na | na | na | na | 52% | 0% | 0% | 0% | 0% |
| Tax rate - effective | |||||||||||||||||
| New | 24.4% | 22.2% | 21.0% | 21.0% | 22.0% | 22.0% | 22.0% | 22.0% | 21.2% | 21.0% | 20.4% | 17.9% | 22.0% | 22.0% | 23.0% | 23.0% | 23.0% |
| Old | 24.4% | 21.0% | 21.0% | 21.0% | 22.0% | 22.0% | 22.0% | 22.0% | 21.2% | 21.0% | 20.4% | 17.9% | 21.7% | 22.0% | 23.0% | 23.0% | 23.0% |
| Difference | na | 1.2% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | na | na | na | na | 0.3% | 0.0% | 0.0% | 0.0% | 0.0% |
| NP ex minority int | |||||||||||||||||
| New | 1,844 | 2,219 | 2,734 | 2,961 | 2,584 | 2,743 | 3,629 | 3,672 | 8,687 | 8,009 | 6,789 | 5,536 | 9,758 | 12,628 | 15,712 | 15,712 | 15,712 |
| Old | 1,844 | 2,642 | 2,746 | 2,628 | 2,437 | 3,262 | 3,604 | 3,457 | 8,687 | 8,009 | 6,789 | 5,536 | 9,860 | 12,760 | 16,175 | 16,175 | 16,175 |
| Difference | na | -16% | 0% | 13% | 6% | -16% | 1% | 6% | na | na | na | na | -1% | -1% | -3% | -3% | -3% |
| EBITDA | |||||||||||||||||
| New | 6,092 | 6,879 | 7,489 | 7,759 | 7,445 | 7,796 | 8,797 | 8,852 | 27,303 | 22,038 | 22,038 | 20,388 | 28,220 | 32,890 | 37,730 | 37,730 | 37,730 |
| Old | 6,092 | 7,126 | 7,504 | 7,337 | 7,256 | 8,058 | 8,765 | 8,576 | 27,303 | 22,038 | 22,038 | 20,388 | 28,059 | 32,655 | 37,918 | 37,918 | 37,918 |
| Difference | na | -3% | 0% | 6% | 3% | -3% | 0% | 3% | na | na | na | na | 1% | 1% | 1% | 0% | |
| Capex spend | |||||||||||||||||
| New | 6,548 | 5,000 | 4,500 | 3,952 | 5,000 | 6,000 | 5,500 | 5,500 | 18,582 | 8,727 | 11,379 | 25,941 | 20,000 | 22,000 | 24,000 | 24,000 | 24,000 |
| Old | 6,548 | 5,000 | 4,500 | 3,952 | 5,000 | 6,000 | 5,500 | 5,500 | 18,582 | 8,727 | 11,379 | 25,941 | 20,000 | 22,000 | 24,000 | 24,000 | |
| Difference | na | 0% | 0% | 0% | 0% | 0% | 0% | 0% | na | na | na | na | 0% | 0% | 0% | ||
| Net debt | |||||||||||||||||
| New | 10,254 | 8,598 | 9,450 | 6,030 | 4,531 | 9,184 | 4,141 | 3,649 | 10,079 | 2,512 | -3,506 | 9,051 | 3,649 | 1,138 | 1,138 | 1,138 | 1,138 |
| Old | 10,254 | 10,511 | 7,235 | 4,126 | 2,753 | 7,181 | 2,141 | 1,843 | 10,079 | 2,512 | -3,506 | 9,051 | 6,030 4,126 | 1,843 | -902 | -902 | -902 |
| Difference | na | -18% | 31% | 46% | 65% | 28% | 93% | 98% | na | na | na | na | 46% | 98% | na | na | na |
| BVPS - O/S shr based | |||||||||||||||||
| New | 78.8 | 77.1 | 82.8 | 87.4 | 91.6 | 88.2 | 93.8 | 99.4 | 68.9 | 73.4 | 76.0 | 76.0 | 87.4 | 99.4 | 113.5 | ||
| Old | 82.9 | 87.1 | 88.0 | 98.8 | 113.2 | 113.2 | |||||||||||
| Difference | 78.8 na | 78.5 -2% | 0% | 0% | 91.1 1% | 0% | 93.5 0% | 1% | 68.9 na | 73.4 na | 76.0 na | 76.0 na | 87.1 0% | 98.8 | 1% | 1% | 0% |
Source:
Company, BofA Global Research estimates
BofA GLOBAL RESEARCH
Exhibit 5: We assume robust topline growth in 2026 (up 26% YoY); 3-yr sales CAGR (2025-28E) shows 19%
Powertech - Quarterly sales and YoY growth
Source: Company, BofA Global Research estimates
BofA GLOBAL RESEARCH
Exhibit 7: Solid QoQ growth seen for all segments in 2Q26
Powertech - QoQ sales growth by segment
*SiP/Module refers to mostly Solidigm's SSD products
Source:
Company, BofA Global Research
BofA GLOBAL RESEARCH
Exhibit 9: Management remains committed to high payout ratio (60%+)
Powertech - EPS and DPS
Source: Company, BofA Global Research estimates
BofA GLOBAL RESEARCH
Exhibit 6: We expect 2026-28E margins (GM 21-23%, OPM 1618%) to closely approach previous highs in 2020-22 (GM 20-23%, OPM 14-17%)
Powertech - Quarterly sales and YoY growth
Source: Company, BofA Global Research estimates
BofA GLOBAL RESEARCH
Exhibit 8: Robust 2026-28E FCF generation well-expected on the back of strong EBITDA rebound and disciplined capex spend
Powertech - QoQ sales growth by segment
BofA GLOBAL RESEARCH
Exhibit 10: Currently trading at high-3x vs our implied target 2027-28E P/B of 5x
Powertech - 12-month forward P/B
Source: Company, BofA Global Research estimates
Source: Company, BofA Global Research estimates
BofA GLOBAL RESEARCH
Exhibit 11: Powertech's monthly sales showed steady recovery
recently, closely approaching previous high level in 2022
Powertech - Monthly sales
Source: Company, BofA Global Research
BofA GLOBAL RESEARCH
Exhibit 13: YoY turnaround continued throughout 2H25-2Q26
Powertech - monthly sales and YoY ex-Greatek
Source: Companies, BofA Global Research
BofA GLOBAL RESEARCH
Exhibit 15: Resilient recovery seen in 2Q26 sales (NT$191bn; +10% QoQ, +27% YoY)
ASE - Monthly sales trend
Source: Company, BofA Global Research
BofA GLOBAL RESEARCH
Exhibit 12: Robust YoY growth continued throughout 2H25-2Q26
Powertech - Monthly sales YoY
Source: Company, BofA Global Research
BofA GLOBAL RESEARCH
Exhibit 14: Nanya's exceptionally robust growth mostly driven by DRAM super-cycle
Nanya Tech and Phison monthly sales YoY
Source: Companies, BofA Global Research
BofA GLOBAL RESEARCH
Exhibit 16: Accelerating YoY rebound well-observed in 2Q26
ASE - Monthly sales trend
Source: Company, BofA Global Research
BofA GLOBAL RESEARCH
Valuation
Exhibit 17: Our PO NT$500 is derived from 27x 2027-28E P/E
Powertech - Valuation multiples at current price and PO
| (x) | 2024 | 2025 | 2026E | 2027E | 2028E | 2027-28E avg |
|---|---|---|---|---|---|---|
| Current shr price based | ||||||
| P/E | 27.8 | 33.8 | 19.2 | 14.8 | 11.9 | 13.3 |
| P/B | 3.3 | 3.3 | 2.9 | 2.5 | 2.2 | 2.4 |
| EV/EBITDA | 8.9 | 9.6 | 6.9 | 5.9 | 5.2 | 5.6 |
| EV/Sales | 2.7 | 2.6 | 2.1 | 1.8 | 1.5 | 1.7 |
| PO based multiples | ||||||
| P/E | 55.2 | 67.1 | 38.1 | 29.4 | 23.7 | 26.5 |
| P/B | 6.6 | 6.6 | 5.7 | 5.0 | 4.4 | 4.7 |
| EV/EBITDA | 17.2 | 18.6 | 13.4 | 11.5 | 10.1 | 10.8 |
| EV/Sales | 5.2 | 5.1 | 4.0 | 3.5 | 3.0 | 3.2 |
Source:
Company. BofA Global Research estimates
Exhibit 18: Long-term historical average P/E shows 12x
Powertech -Historical multiples based on year-average/high/low share prices
| (x) | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2015-25 Avg |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Year-average | |||||||||||
| P/E | 12.3 | 12.2 | 10.6 | 10.7 | 11.3 | 9.0 | 7.7 | 9.5 | 17.1 | 18.0 | 11.8 |
| P/B | 1.7 | 1.9 | 1.6 | 1.5 | 1.6 | 1.6 | 1.3 | 1.4 | 2.0 | 1.8 | 1.6 |
| EV/EBITDA | 3.9 | 4.3 | 3.5 | 3.3 | 3.5 | 3.0 | 2.8 | 3.5 | 5.1 | 5.0 | 3.7 |
| EV/Sales | 1.3 | 1.4 | 1.2 | 1.1 | 1.1 | 1.0 | 0.9 | 1.1 | 1.5 | 1.4 | 1.2 |
| Year-high | |||||||||||
| P/E | 14.8 | 14.1 | 12.2 | 14.0 | 13.6 | 10.1 | 8.7 | 14.3 | 22.2 | 24.4 | 14.8 |
| P/B | 2.0 | 2.1 | 1.8 | 1.9 | 2.0 | 1.8 | 1.5 | 2.1 | 2.6 | 2.4 | 2.0 |
| EV/EBITDA | 4.6 | 4.8 | 3.9 | 4.2 | 4.1 | 3.3 | 3.1 | 5.3 | 6.7 | 6.8 | 4.6 |
| EV/Sales | 1.6 | 1.6 | 1.3 | 1.4 | 1.3 | 1.1 | 1.0 | 1.7 | 2.0 | 1.8 | 1.5 |
| Year-low | |||||||||||
| P/E | 10.2 | 9.4 | 8.0 | 8.6 | 8.0 | 8.2 | 6.1 | 7.5 | 12.7 | 13.3 | 9.3 |
| P/B | 1.4 | 1.4 | 1.2 | 1.2 | 1.2 | 1.5 | 1.0 | 1.1 | 1.5 | 1.3 | 1.3 |
| EV/EBITDA | 3.3 | 3.4 | 2.8 | 2.7 | 2.6 | 2.7 | 2.3 | 2.8 | 3.7 | 3.7 | 3.0 |
| EV/Sales | 1.1 | 1.1 | 0.9 | 0.9 | 0.8 | 0.9 | 0.7 | 0.9 | 1.1 | 1.0 | 0.9 |
Source:
Company, BofA Global Research
BofA GLOBAL RESEARCH
BofA GLOBAL RESEARCH
Exhibit 19: Powertech's multiples are lower than its memory and semis back-end peers despite solid ROE (high-teen% in FY27-28E)
Valuations comparison
| Ticker | Rating | Price | Mcap | P/E | P/E | P/Book | P/Book | P/Book | EV/EBITDA | EV/EBITDA | EV/EBITDA | ROE | ROE | ROE | ROE | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Local) | ($bn) | FY26 | FY27E | FY28E | FY26 | FY27E | FY28E | FY26 | FY27E | FY28E | FY26 | FY27E | FY28E | |||
| Powertech | PWOGF | C-1-7 | 251.50 | 5.9 | 19.2 | 14.8 | 11.9 | 2.9 | 2.6 | 2.3 | 7.6 | 6.6 | 5.7 | 16.1% | 18.3% | 19.9% |
| ASE | XSRIF | C-1-7 | 554.00 | 76.7 | 32.4 | 17.6 | 13.2 | 5.1 | 3.8 | 2.9 | 14.9 | 9.0 | 6.7 | 18.9% | 25.2% | 25.0% |
| JCET | XJIEF | C-1-7 | 76.83 | 20.3 | 49.9 | 36.9 | 25.3 | 4.5 | 4.0 | 3.6 | 19.5 | 16.4 | 15.5 | 9.3% | 11.5% | 11.9% |
| SIMO | SIMO | C-1-7 | 244.45 | 8.3 | 27.1 | 23.0 | 18.5 | 7.5 | 6.0 | 4.8 | 20.1 | 15.9 | 12.9 | 31.9% | 29.6% | 29.4% |
| Phison | PISNF | C-1-8 | 1,650.00 | 11.3 | 4.6 | 7.8 | 12.2 | 3.1 | 2.6 | 2.3 | 3.3 | 5.4 | 8.4 | 89.2% | 36.0% | 20.2% |
| Samsung | SSNLF | C-1-7 | 255,000 | 872.0 | 5.8 | 4.4 | 4.6 | 2.5 | 1.6 | 1.2 | 3.3 | 2.6 | 2.7 | 51.8% | 43.5% | 29.9% |
| Micron | MU | C-1-7 | 900.20 | 1,016.7 | 12.3 | 6.4 | 6.2 | 7.5 | 3.9 | 2.8 | 9.9 | 5.2 | 5.1 | 87.8% | 81.0% | 54.8% |
| Nanya Tech | NNYAF | B-1-7 | 392.50 | 41.9 | 6.3 | 4.6 | 5.7 | 3.0 | 2.0 | 1.6 | 3.8 | 2.7 | 3.3 | 67.9% | 52.0% | 31.5% |
| Intel | INTC | C-1-9 | 91.67 | 462.4 | 61.5 | 43.9 | 30.5 | 4.2 | 3.9 | 3.4 | 19.5 | 15.1 | 11.9 | 6.5% | 9.5% | 12.5% |
Source: Companies, BofA Global Research estimates. Mcap = market capitalization. ROE = return on equity
BofA GLOBAL RESEARCH
Exhibit 20: NT$20bn+ annual FCF generation suggests a fair value of NT$500
Powertech -Cross-checked discounted cash flow (DCF) valuation
| 2024 | 2025 | 2026E | 2027E | 2028E | 2029E | 2030E | 2031E | |
|---|---|---|---|---|---|---|---|---|
| Sales | 73,315 | 74,929 | 94,276 | 109,185 | 126,907 | 149,750 | 169,517 | 186,469 |
| Sales growth | 4% | 2% | 26% | 16% | 16% | 18% | 13% | 10% |
| OP | 9,382 | 8,132 | 14,793 | 19,089 | 23,369 | 28,452 | 32,208 | 35,988 |
| OPM | 13% | 11% | 16% | 17% | 18% | 19% | 19% | 19% |
| Dep &Amor | 12,656 | 12,257 | 13,427 | 13,801 | 14,361 | 15,000 | 17,000 | 20,000 |
| EBITDA | 22,038 | 20,388 | 28,220 | 32,890 | 37,730 | 43,452 | 49,208 | 55,988 |
| Capex | 11,379 | 25,941 | 20,000 | 22,000 | 24,000 | 25,000 | 25,000 | 25,000 |
| Increase in NWC | 1,113 | -2,764 | -2,011 | 1,887 | 771 | 200 | 200 | 200 |
| Net working capital | 38,930 | 30,598 | 30,067 | 39,124 | 43,301 | 43,501 | 43,701 | 43,901 |
| Taxes | 2,178 | 1,572 | 3,354 | 4,173 | 5,347 | 6,260 | 7,086 | 7,917 |
| Free cash flow | 7,368 | -4,361 | 6,877 | 4,830 | 7,612 | 11,993 | 16,922 | 22,871 |
| Discount factor at 12% WACC | 1.00 | 0.89 | 0.79 | 0.71 | 0.63 | 0.56 | 0.50 | |
| Present value of FCF | 6,128 | 3,835 | 5,386 | 7,562 | 9,508 | 11,451 | ||
| Sum of PV FCF (a) | 43,871 | |||||||
| Terminal value | ||||||||
| PV of TV (b) | 351,528 | |||||||
| 12x EV/EBITDA | 351,528 | 702,095 | ||||||
| Perpetual growth | 4.50% | |||||||
| Biz value total (A = a+b) | 395,399 | |||||||
| Net debt &minority int (B) | 24,034 | |||||||
| Shareholder value total (A-B) | 371,365 | |||||||
| Fully diluted shares (mn) | 742 | |||||||
| Per share value (NT$) | 500.3 | |||||||
| PO vs FV | 0% | |||||||
| BofA PO | 500.0 |
Source: Company, BofA Global Research estimates
BofA GLOBAL RESEARCH
Earnings outlook in 2026-28E
Exhibit 21: Memory (DRAM+NAND combined) accounts for sub-50% of total sales, followed by logic (~40%), SiP/Module (low-teen%); we expect strong 2026-28E topline growth (3-yr CAGR of 19% during 2025-28E)
Powertech - Sales breakdown
| (NT$mn) | 1Q25 | 2Q25 | 3Q25 | 4Q25 | 1Q26 | 2Q26 | 3Q26E | 4Q26E | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| By chip application | ||||||||||||||||
| DRAM | 3,254 | 4,334 | 4,792 | 4,495 | 4,263 | 4,392 | 4,787 | 5,122 | 17,000 | 17,987 | 17,815 | 15,826 | 16,876 | 18,565 | 21,668 | 25,723 |
| NAND | 3,719 | 3,973 | 4,992 | 5,780 | 5,542 | 6,704 | 7,106 | 7,532 | 30,148 | 28,602 | 20,219 | 20,881 | 18,464 | 26,883 | 32,234 | 38,981 |
| SiP/Module | 1,240 | 1,806 | 2,197 | 2,783 | 2,345 | 2,543 | 2,695 | 2,884 | 7,709 | 8,631 | 6,061 | 7,490 | 8,025 | 10,467 | 11,560 | 14,170 |
| Logic | 7,282 | 7,946 | 7,987 | 8,349 | 9,165 | 9,477 | 9,762 | 9,957 | 28,937 | 28,707 | 26,345 | 29,118 | 31,565 | 38,361 | 43,723 | 48,033 |
| Total Sales | 15,494 | 18,060 | 19,968 | 21,407 | 21,314 | 23,116 | 24,350 | 25,496 | 83,794 | 83,927 | 70,441 | 73,315 | 74,929 | 94,276 | 109,185 | 126,907 |
| Mix | ||||||||||||||||
| DRAM | 21% | 24% | 24% | 21% | 20% | 19% | 20% | 20% | 20% | 21% | 25% | 22% | 23% | 20% | 20% | 20% |
| NAND | 24% | 22% | 25% | 27% | 26% | 29% | 29% | 30% | 36% | 34% | 29% | 28% | 25% | 29% | 30% | 31% |
| SiP/Module | 8% | 10% | 11% | 13% | 11% | 11% | 11% | 11% | 9% | 10% | 9% | 10% | 11% | 11% | 11% | 11% |
| Logic | 47% | 44% | 40% | 39% | 43% | 41% | 40% | 39% | 35% | 34% | 37% | 40% | 42% | 41% | 40% | 38% |
| Total Sales | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| QoQ | ||||||||||||||||
| DRAM | 0% | 33% | 11% | -6% | -5% | 3% | 9% | 7% | ||||||||
| NAND | -22% | 7% | 26% | 16% | -4% | 21% | 6% | 6% | ||||||||
| SiP/Module | -34% | 46% | 22% | 27% | -16% | 8% | 6% | 7% | ||||||||
| Logic | 1% | 9% | 1% | 5% | 10% | 3% | 3% | 2% | ||||||||
| Total Sales | -9% | 17% | 11% | 7% | 0% | 8% | 5% | 5% | ||||||||
| YoY | ||||||||||||||||
| DRAM | -26% | -8% | 38% | 38% | 31% | 1% | 0% | 14% | -2% | 6% | -1% | -11% | 7% | 10% | 17% | 19% |
| NAND | -28% | -25% | -12% | 21% | 49% | 69% | 42% | 30% | 1% | -5% | -29% | 3% | -12% | 46% | 20% | 21% |
| SiP/Module | -39% | 2% | 20% | 48% | 89% | 41% | 23% | 4% | -7% | 12% | -30% | 24% | 7% | 30% | 10% | 23% |
| Logic | 7% | 1% | 9% | 16% | 26% | 19% | 22% | 19% | 40% | -1% | -8% | 11% | 8% | 22% | 14% | 10% |
| Total Sales | -15% | -8% | 9% | 25% | 38% | 28% | 22% | 19% | 10% | 0% | -16% | 4% | 2% | 26% | 16% | 16% |
| By backend process | ||||||||||||||||
| Testing | 3,564 | 3,973 | 4,393 | 4,710 | 4,689 | 5,317 | 5,357 | 5,584 | 18,435 | 18,630 | 15,788 | 16,300 | 16,639 | 20,946 | 23,491 | 26,547 |
| SiP/module | 1,240 | 1,806 | 2,197 | 2,783 | 2,345 | 2,543 | 2,695 | 2,884 | 7,709 | 8,631 | 6,061 | 7,319 | 8,025 | 10,467 | 11,560 | 14,170 |
| Package | 10,691 | 12,281 | 13,379 | 13,915 | 14,280 | 15,256 | 16,298 | 17,028 | 57,650 | 56,666 | 48,592 | 49,696 | 50,265 | 62,863 | 74,134 | 86,190 |
| Total Sales | 15,494 | 18,060 | 19,968 | 21,407 | 21,314 | 23,116 | 24,350 | 25,496 | 83,794 | 83,927 | 70,441 | 73,315 | 74,929 | 94,276 | 109,185 | 126,907 |
| Mix | ||||||||||||||||
| Testing | 23% | 22% | 22% | 22% | 22% | 23% | 22.0% | 21.9% | 22% | 22% | 22% | 22% | 22% | 22% | 22% | 21% |
| SiP/module | 8% | 10% | 11% | 13% | 11% | 11% | 11.1% | 11.3% | 9% | 10% | 9% | 10% | 11% | 11% | 11% | 11% |
| Package | 69% | 68% | 67% | 65% | 67% | 66% | 66.9% | 66.8% | 69% | 68% | 69% | 68% | 67% | 67% | 68% | 68% |
| Total Sales | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| QoQ | ||||||||||||||||
| Testing | -9% | 11% | 11% | 7% | 0% | 13% | 1% | 4% | ||||||||
| SiP/module | -28% | 46% | 22% | 27% | -16% | 8% | 6% | 7% | ||||||||
| Package | -7% | 15% | 9% | 4% | 3% | 7% | 7% | 4% | ||||||||
| Total Sales | -9% | 17% | 11% | 7% | 0% | 8% | 5% | 5% | ||||||||
| YoY | ||||||||||||||||
| Testing | -7% | -8% | 4% | 20% | 32% | 34% | 22% | 19% | 8% | 1% | -15% | 3% | 2% | 26% | 12% | 13% |
| SiP/module | -39% | 2% | 20% | 63% | 89% | 41% | 23% | 4% | -7% | 12% | -30% | 21% | 10% | 30% | 10% | 23% |
| Package | -14% | -9% | 9% | 21% | 34% | 24% | 22% | 22% | 13% | -2% | -14% | 2% | 1% | 25% | 18% | 16% |
| Total Sales | -15% | -8% | 9% | 25% | 38% | 28% | 22% | 19% | 10% | 0% | -16% | 4% | 2% | 26% | 16% | 16% |
Source:
Company, BofA Global Research estimates
BofA GLOBAL RESEARCH
Exhibit 22: We expect solid topline growth in 2026-28E coupled with steady margin improvement (GM 21-23%, OPM 16-18%), closely approaching 2021-22 upturn level
Powertech - Income statement
| (NT$mn) | 1Q26 | 2Q26 | 3Q26E | 4Q26E | 1Q27E | 2Q27E | 3Q27E | 4Q27E | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 21,314 | 23,116 | 24,350 | 25,496 | 24,924 | 26,392 | 28,781 | 29,088 | 83,794 | 83,927 | 70,441 | 73,315 | 74,929 | 94,276 | 109,185 | 126,907 |
| COGS | 17,170 | 18,085 | 18,998 | 19,759 | 19,441 | 20,453 | 22,162 | 22,310 | 64,499 | 66,551 | 57,832 | 59,324 | 62,200 | 74,012 | 84,367 | 97,522 |
| Gross profit | 4,144 | 5,031 | 5,352 | 5,737 | 5,483 | 5,938 | 6,620 | 6,777 | 19,295 | 17,376 | 12,609 | 13,991 | 12,729 | 20,264 | 24,819 | 29,384 |
| SG&A | 1,383 | 1,500 | 1,228 | 1,360 | 1,437 | 1,575 | 1,289 | 1,428 | 4,770 | 4,928 | 4,455 | 4,609 | 4,597 | 5,471 | 5,729 | 6,016 |
| R&D | 843 | 678 | 741 | 851 | 870 | 712 | 778 | 894 | 2,443 | 2,462 | 2,458 | 2,809 | 2,807 | 3,113 | 3,254 | 3,417 |
| Market. &Adm. | 540 | 822 | 487 | 508 | 567 | 863 | 512 | 534 | 2,326 | 2,465 | 1,998 | 1,800 | 1,790 | 2,357 | 2,475 | 2,599 |
| OP | 2,761 | 3,531 | 4,124 | 4,377 | 4,046 | 4,363 | 5,330 | 5,350 | 14,525 | 12,448 | 8,154 | 9,382 | 8,132 | 14,793 | 19,089 | 23,369 |
| EBITDA | 6,092 | 6,879 | 7,489 | 7,759 | 7,445 | 7,796 | 8,797 | 8,852 | 28,577 | 27,303 | 22,038 | 22,038 | 20,388 | 28,220 | 32,890 | 37,730 |
| Dep &amort/ | 3,332 | 3,348 | 3,365 | 3,382 | 3,399 | 3,433 | 3,467 | 3,502 | 14,052 | 14,855 | 13,884 | 12,656 | 12,257 | 13,427 | 13,801 | 14,361 |
| Net Non-OP inc | 396 | 130 | -30 | -30 | -30 | -30 | -30 | -30 | 181 | 1,192 | 3,890 | 1,295 | 660 | 466 | -120 | -120 |
| Pre-tax income | 3,157 | 3,661 | 4,094 | 4,347 | 4,016 | 4,333 | 5,300 | 5,320 | 14,705 | 13,640 | 12,043 | 10,677 | 8,792 | 15,259 | 18,969 | 23,249 |
| Tax | 770 | 811 | 860 | 913 | 884 | 953 | 1,166 | 1,170 | 2,980 | 2,888 | 2,534 | 2,178 | 1,572 | 3,354 | 4,173 | 5,347 |
| Effective tax rate | 24% | 22% | 21% | 21% | 22% | 22% | 22% | 22% | 20% | 21% | 21% | 20% | 18% | 22% | 22% | 23% |
| Net profit | 2,387 | 2,850 | 3,234 | 3,434 | 3,133 | 3,380 | 4,134 | 4,150 | 11,726 | 10,752 | 9,509 | 8,499 | 7,221 | 11,905 | 14,796 | 17,901 |
| Minority income | 543 | 631 | 500 | 473 | 548 | 637 | 505 | 478 | 2,828 | 2,065 | 1,501 | 1,711 | 1,685 | 2,147 | 2,168 | 2,190 |
| Net profit aft. min. | 1,844 | 2,219 | 2,734 | 2,961 | 2,584 | 2,743 | 3,629 | 3,672 | 8,898 | 8,687 | 8,009 | 6,789 | 5,536 | 9,758 | 12,628 | 15,712 |
| EPS (FD) | 2.48 | 2.99 | 3.68 | 3.98 | 3.48 | 3.69 | 4.88 | 4.94 | 11.50 | 11.52 | 10.66 | 9.05 | 7.45 | 13.13 | 16.99 | 21.14 |
| Margins (%) | ||||||||||||||||
| GP margin | 19% | 22% | 22% | 23% | 22% | 23% | 23% | 23% | 23% | 21% | 18% | 19% | 17% | 21% | 23% | 23% |
| OP margin | 13% | 15% | 17% | 17% | 16% | 17% | 19% | 18% | 17% | 15% | 12% | 13% | 11% | 16% | 17% | 18% |
| RP margin | 15% | 16% | 17% | 17% | 16% | 16% | 18% | 18% | 18% | 16% | 17% | 15% | 12% | 16% | 17% | 18% |
| NP margin | 11% | 12% | 13% | 13% | 13% | 13% | 14% | 14% | 14% | 13% | 13% | 12% | 10% | 13% | 14% | 14% |
Source:
Company, BofA Global Research estimates
BofA GLOBAL RESEARCH
Exhibit 23: Net debt shows NT$8.6bn as of 2Q26
Powertech - Balance sheet
| (NT$mn) | 1Q26 | 2Q26 | 3Q26E | 4Q26E | 1Q27E | 2Q27E | 3Q27E | 4Q27E | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Assets total Current assets total | 126,980 | 130,960 | 130,865 49,757 | 134,490 53,258 | 136,639 54,246 | 133,964 49,438 | 140,847 | 143,123 55,415 | 118,587 51,959 | 118,969 49,777 | 111,155 48,194 | 109,191 46,986 | 123,163 46,365 | 134,490 53,258 | 143,123 55,415 | 152,737 57,018 |
| equivalent | 47,281 | 50,534 | 16,518 | 19,688 | 20,686 | 15,542 | 54,716 20,104 | 20,125 | 23,175 | 20,534 | 21,319 | 22,271 | 16,375 | 19,688 | 20,125 | 19,983 |
| Cash &cash A/R | 16,023 19,457 | 17,625 20,916 | 21,125 | 21,337 | 20,910 | 21,119 | 22,175 | 22,729 | 17,975 | 14,347 | 16,679 | 15,885 | 18,537 | 21,337 | 22,729 | 23,868 |
| Inventories | 6,857 | 7,200 | 7,272 | 7,345 | 7,712 | 7,789 | 7,400 | 7,474 | 6,768 | 10,753 | 6,681 | 5,446 | 6,566 | 7,345 | 7,474 | 7,873 |
| Others | 4,945 | 4,793 | 4,841 | 4,889 | 4,938 | 4,987 | 5,037 | 5,087 | 4,041 | 4,143 | 3,516 | 3,384 | 4,887 | 4,889 | 5,087 | 5,294 |
| Non-current assets total | 79,699 | 80,426 | 81,108 | 81,232 | 82,393 | 84,526 | 86,131 | 87,707 | 66,628 | 69,192 | 62,960 | 62,205 | 76,798 | 81,232 | 87,707 | 95,719 |
| LT investments | 1,265 | 1,278 | 1,290 | 1,303 | 1,316 | 1,329 | 1,343 | 1,356 | 509 | 447 | 829 | 1,199 | 1,212 | 1,303 | 1,356 | 1,411 |
| Fixed assets | 73,313 | 71,790 | 72,386 | 72,423 | 73,495 | 75,540 | 77,055 | 78,540 | 63,237 | 64,818 | 56,924 | 56,588 | 70,412 | 72,423 | 78,540 | 86,179 |
| Others | 5,121 | 7,358 | 7,432 | 7,506 | 7,581 | 7,657 | 7,734 | 7,811 | 2,883 | 3,927 | 5,208 | 4,417 | 5,175 | 7,506 | 7,811 | 8,128 |
| Liabilities total | 53,171 | 58,761 | 54,355 | 54,394 | 53,257 | 52,971 | 55,563 | 53,531 | 55,281 | 52,646 | 42,048 | 37,498 | 51,889 | 54,394 | 53,531 | 51,999 |
| Current liabilities total | 24,511 | 29,895 | 25,715 | 25,977 | 25,311 | 25,486 | 28,530 | 26,939 | 23,319 | 19,615 | 16,508 | 18,356 | 23,776 | 25,977 | 26,939 | 27,937 |
| ST debts | 307 | 513 | 516 | 519 | 522 | 525 | 528 | 532 | 199 | 260 | 634 | 1,878 | 13 | 519 | 532 | 545 |
| A/P | 7,034 | 7,245 | 7,970 | 7,948 | 7,104 | 7,100 | 9,962 | 8,187 | 6,899 | 5,594 | 5,077 | 5,081 | 7,717 | 7,948 | 8,187 | 8,433 |
| Others | 17,170 | 22,137 | 17,229 | 17,509 | 17,684 | 17,861 | 18,040 | 18,220 | 16,221 | 13,762 | 10,798 | 11,397 | 16,047 | 17,509 | 18,220 | 18,960 |
| Non-current liabilities | 28,660 | 28,866 | 28,640 | 28,418 | 27,946 | 27,485 | 27,033 | 26,592 | 31,962 | 33,031 | 25,540 | 19,142 | 28,113 | 28,418 | 26,592 | 24,062 |
| LT debts | 25,970 | 25,710 | 25,453 | 25,198 | 24,694 | 24,201 | 23,717 | 23,242 | 30,013 | 30,354 | 23,198 | 16,887 | 25,413 | 25,198 | 23,242 | 20,576 |
| Others | 2,690 | 3,156 | 3,188 | 3,219 | 3,252 | 3,284 | 3,317 | 3,350 | 1,949 | 2,678 | 2,342 | 2,255 | 2,699 | 3,219 | 3,350 | 3,486 |
| Equity | 58,366 | 57,128 | 61,288 | 64,722 | 67,855 | 65,310 | 69,444 | 73,594 | 49,507 | 52,289 | 54,870 | 56,762 | 56,291 | 64,722 | 73,594 | 84,090 |
| total Paid in capital | 7,591 | 7,591 | 7,591 | 7,591 | 7,591 | 7,591 | 7,591 | 7,591 | 7,791 | 7,591 | 7,591 | 7,591 | 7,591 | 7,591 | 7,591 | 7,591 |
| Capital surplus | 462 | 462 | 462 | 462 | 462 | 462 | 462 | 462 | 271 | 150 | 237 | 320 | 462 | 462 | 462 | 462 |
| Retained earnings | 51,805 | 51,323 | 54,557 | 57,991 | 61,124 | 58,579 | 62,713 | 66,863 | 43,574 | 45,551 | 48,242 | 49,756 | 49,961 | 57,991 | 66,863 | 77,359 |
| Treasury stocks | -923 | -923 | -923 | -923 | -711 | -469 | -469 | -533 | -923 | -923 | -923 | -923 | ||||
| Others | -923 -570 | -1,326 | -923 -400 | -400 | -923 -400 | -923 -400 | -400 | -400 | -1,418 | -534 | -732 | -372 | -801 | -400 | -400 | -400 |
| D/E Analysis | D/E Analysis | D/E Analysis | D/E Analysis | D/E Analysis | D/E Analysis | D/E Analysis | D/E Analysis | D/E Analysis | D/E Analysis | D/E Analysis | D/E Analysis | D/E Analysis | D/E Analysis | D/E Analysis | D/E Analysis | D/E Analysis |
| Cash | 16,023 | 17,625 | 16,518 | 19,688 | 20,686 | 15,542 | 20,104 | 20,125 | 23,175 | 20,534 | 21,319 | 22,271 | 16,375 | 19,688 | 20,125 | 19,983 |
| Debts total | 26,276 | 26,223 | 25,969 | 25,718 | 25,217 | 24,726 | 24,245 | 23,774 | 30,212 | 30,613 | 23,832 | 18,765 | 25,426 | 25,718 | 23,774 | 21,121 |
| Net debts | 10,254 | 8,598 | 9,450 | 6,030 | 4,531 | 9,184 | 4,141 | 3,649 | 7,037 | 10,079 | 2,512 | -3,506 | 9,051 | 6,030 | 3,649 | 1,138 |
| Net D/E ratio | 14% | 12% | 12% | 8% | 5% | 11% | 5% | 4% | 11% | 15% | 4% | -5% | 13% | 8% | 4% | 1% |
| Gross D/E ratio | 36% | 36% | 34% | 32% | 30% | 31% | 28% | 27% | 48% | 46% | 34% | 26% | 36% | 32% | 27% | 21% |
| BVPS | 79 | 77 | 83 | 87 | 92 | 88 | 94 | 99 | 64 | 69 | 73 | 76 | 76 | 87 | 99 | 114 |
Source:
Company, BofA Global Research estimates
BofA GLOBAL RESEARCH
Exhibit 24: 2026-28E capex increase (NT$18-24bn pa) mostly for advanced packaging such as PLP and TSV/HBM; this should be fully covered by operating cash flow
Powertech - Cash flow statement
| (NT$mn) | 1Q26 | 2Q26 | 3Q26E | 4Q26E | 1Q27E | 2Q27E | 3Q27E | 4Q27E | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| I. CF from operation | 4,102 | 5,763 | 4,920 | 6,270 | 5,325 | 88 | 15,345 | 4,900 | 24,649 | 22,923 | 19,682 | 24,082 | 18,509 | 21,054 | 25,658 | 29,314 |
| Net income | 1,844 | 2,219 | 2,734 | 2,961 | 2,584 | 2,743 | 3,629 | 3,672 | 8,898 | 8,687 | 8,009 | 6,789 | 5,536 | 9,758 | 12,628 | 15,712 |
| D&A | 3,332 | 3,348 | 3,365 | 3,382 | 3,399 | 3,433 | 3,467 | 3,502 | 14,052 | 14,855 | 13,884 | 12,656 | 12,257 | 13,427 | 13,801 | 14,361 |
| Change in NWC | -829 | 195 | -1,180 | -74 | -658 | -6,087 | 8,249 | -2,273 | 611 | -4,223 | -1,113 | 2,764 | 2,011 | -1,887 | -771 | -759 |
| Others | -245 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1,087 | 3,605 | -1,098 | 1,874 | -1,295 | -245 | 0 | 0 |
| II. CF from investments | -5,453 | -5,000 | -4,500 | -3,952 | -5,000 | -6,000 | -5,500 | -5,500 | -14,059 | -18,927 | -5,303 | -9,865 | -26,023 | -18,906 | -22,000 | -24,000 |
| Capital expenditures | -6,548 | -5,000 | -4,500 | -3,952 | -5,000 | -6,000 | -5,500 | -5,500 | -15,275 | -18,582 | -8,727 | -11,379 | -25,941 | -20,000 | -22,000 | -24,000 |
| Others | 1,094 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1,216 | -346 | 3,424 | 1,514 | -82 | 1,094 | 0 | 0 |
| III. CF from financing | 226 | 740 | -1,526 | 852 | 673 | 768 | -5,283 | 620 | -8,716 | -6,761 | -13,530 | -11,351 | 4,197 | 292 | -3,221 | -5,456 |
| Change in debts | 851 | -53 | -254 | -251 | -501 | -491 | -481 | -471 | -1,342 | 401 | -6,782 | -5,066 | 6,660 | 292 | -1,944 | -2,653 |
| Change in capital stocks | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 40 | -321 | 88 | 83 | 143 | 0 | 0 | 0 |
| Net share repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -481 | 242 | 0 | -65 | -390 | 0 | 0 | 0 |
| Dividends | 0 | 0 | -3,333 | 0 | 0 | 0 | -5,924 | 0 | -3,896 | -5,086 | -5,231 | -5,231 | -5,172 | -3,333 | -5,924 | -7,406 |
| Others | -624 | 793 | 2,061 | 1,103 | 1,174 | 1,259 | 1,123 | 1,091 | -3,036 | -1,996 | -1,604 | -1,072 | 2,955 | 3,333 | 4,647 | 4,603 |
| IV. Cash flows (I+II+III) | -353 | 1,502 | -1,107 | 3,169 | 998 | -5,144 | 4,562 | 20 | 1,594 | -2,241 | 706 | 3,675 | -4,052 | 3,212 | 437 | -142 |
| Cash at beginning | 16,375 | 16,023 | 17,525 | 16,418 | 19,588 | 20,586 | 15,442 | 20,004 | 21,020 | 22,614 | 20,373 | 21,080 | 22,238 | 16,375 | 19,588 | 20,025 |
| Cash at end | 16,023 | 17,525 | 16,418 | 19,588 | 20,586 | 15,442 | 20,004 | 20,025 | 22,614 | 20,373 | 21,080 | 22,238 | 16,375 | 19,588 | 20,025 | 19,883 |
Source: Company, BofA Global Research estimates
BofA GLOBAL RESEARCH
Exhibit 25: We assume FCF turnaround in 2026 (NT$3.0bn) and more meaningful recovery in 2027/28E (NT$6.0/7.6bn) on the back of steady EBITDA rebound with disciplined capex spend
Powertech Technology - Free cash flow (FCF) analysis
| (NT$mn) | 1Q26 | 2Q26 | 3Q26E | 4Q26E | 1Q27E | 2Q27E | 3Q27E | 4Q27E | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 21,314 | 23,116 | 24,350 | 25,496 | 24,924 | 26,392 | 28,781 | 29,088 | 83,794 | 83,927 | 70,441 | 73,315 | 74,929 | 94,276 | 109,185 | 126,907 |
| Operating income | 2,761 | 3,531 | 4,124 | 4,377 | 4,046 | 4,363 | 5,330 | 5,350 | 14,525 | 12,448 | 8,154 | 9,382 | 8,132 | 14,793 | 19,089 | 23,369 |
| Dep &amortization | 3,332 | 3,348 | 3,365 | 3,382 | 3,399 | 3,433 | 3,467 | 3,502 | 14,052 | 14,855 | 13,884 | 12,656 | 12,257 | 13,427 | 13,801 | 14,361 |
| EBITDA | 6,092 | 6,879 | 7,489 | 7,759 | 7,445 | 7,796 | 8,797 | 8,852 | 28,577 | 27,303 | 22,038 | 22,038 | 20,388 | 28,220 | 32,890 | 37,730 |
| Capex | 6,548 | 5,000 | 4,500 | 3,952 | 5,000 | 6,000 | 5,500 | 5,500 | 15,275 | 18,582 | 8,727 | 11,379 | 25,941 | 20,000 | 22,000 | 24,000 |
| Increase ofNWC | 829 | -195 | 1,180 | 74 | 658 | 6,087 | -8,249 | 2,273 | -611 | 4,223 | 1,113 | -2,764 | -2,011 | 1,887 | 771 | 759 |
| Net working capital (NWC) | 7,055 | 6,860 | 8,040 | 8,113 | 8,771 | 14,859 | 6,610 | 8,884 | 5,664 | 32,064 | 51,120 | 38,930 | 30,598 | 30,067 | 39,124 | 43,301 |
| Ex-cash current assets | 31,259 | 32,909 | 33,238 | 33,570 | 33,560 | 33,895 | 34,612 | 35,291 | 28,784 | 122,803 | 116,778 | 106,028 | 106,304 | 130,976 | 137,358 | 144,779 |
| Ex-debts current liabilities | 24,204 | 26,049 | 25,199 | 25,457 | 24,788 | 19,037 | 28,002 | 26,407 | 23,120 | 90,739 | 65,657 | 67,098 | 75,706 | 100,910 | 98,234 | 101,477 |
| Taxes | 770 | 811 | 860 | 913 | 884 | 953 | 1,166 | 1,170 | 2,980 | 2,888 | 2,534 | 2,178 | 1,572 | 3,354 | 4,173 | 5,347 |
| Free cash flow (FCF) | -2,054 | 1,264 | 950 | 2,820 | 903 | -5,245 | 10,380 | -92 | 10,934 | 1,610 | 9,664 | 11,245 | -5,114 | 2,979 | 5,946 | 7,624 |
| FCF without NWC changes | -1,225 | 1,068 | 2,130 | 2,894 | 1,561 | 843 | 2,131 | 2,181 | 10,323 | 5,833 | 10,777 | 8,481 | -7,124 | 4,866 | 6,717 | 8,383 |
| US$ equivalent (mn) | ||||||||||||||||
| Sales | 673 | 732 | 771 | 808 | 793 | 842 | 921 | 934 | 3,000 | 2,826 | 2,258 | 2,280 | 2,413 | 2,984 | 3,489 | 4,092 |
| OP | 87 | 112 | 131 | 139 | 129 | 139 | 171 | 172 | 520 | 421 | 261 | 292 | 262 | 468 | 610 | 754 |
| EBITDA | 192 | 218 | 237 | 246 | 237 | 249 | 282 | 284 | 1,023 | 920 | 707 | 685 | 656 | 893 | 1,051 | 1,217 |
| Capex | 207 | 158 | 142 | 125 | 159 | 191 | 176 | 177 | 547 | 630 | 281 | 353 | 836 | 633 | 703 | 774 |
| Free cash flow (FCF) | -65 | 40 | 30 | 89 | 29 | -167 | 332 | -3 | 392 | 52 | 305 | 351 | -170 | 95 | 191 | 246 |
| FCF without NWCchanges | -39 | 34 | 67 | 92 | 50 | 27 | 68 | 70 | 369 | 193 | 345 | 264 | -231 | 154 | 215 | 270 |
Source:
Company, BofA Global Research estimates
BofA GLOBAL RESEARCH
Price objective basis & risk
Powertech Technology (PWOGF)
Our PO of NT$500 is derived from 27x P/E based on 2027-28E EPS. This is 10-20% higher than 2024-25 peak levels (low- to mid-20x). Since we expect 50%+ higher EPS in 2026-28E vs 2024-25 on the back of record-high sales/margin, we believe fair multiples should be at least on par with the previous peak level. True, the long-term historical average P/E came in the range of 10-20x, but the memory super-cycle and AI boom should warrant above-trend earnings growth and consequently over 20x fair P/E. Taiwan's OSAT stocks also trade at 20-30x P/E.
Upside risk is mostly related to strong packaging orders from memory chipmakers and even logic chip suppliers.
Downside risk is mostly associated with an unexpected memory industry downturn or AI bubble (e.g., significant packaging order cut).