PDF 原檔：報告_Citi_台光電2383_20260904_original.pdf
原始內容
citivelocity.com
04 Sep 2026 07:00:50 ET │ 11 pages
Elite Material (2383.TW)
Citi Taiwan Semicon Tour: Tight supply for the next 2 years
CITI'S TAKE
The company remains positive and believes CCL S/D imbalance could continue in the next 2 years, given PCB customers' expansion magnitude is higher than CCL suppliers. For 3Q26 guidance, the company now expects its 3Q26 sales to grow 15-20% QoQ with GM range of 35-36.5%. In term of the potential competition from PTFE, the company remains conservative about the adoption of PTFE, given its low yield rate, the presence of hazardous substance and lack of supply chain readiness. The company emphasized that it will be M10 with Q-glass solution that competes with PTFE next year rather than M9 with Q-glass, as M9 has entered mass production from 2H26. The company thinks even if PTFE is adopted, the scale wouldn't be large and could likely be a hybrid version solution of PTFE CCL + hydrocarbon prepreg, which implies limited impact on its hydrocarbon business.
The company expects continued market share gain given its aggressive capacity expansion and strong technology capabilities. For some capacity bound by longterm agreements, the company said this capacity is basically all sold out for the next 2 years. The company now targets to maintain 40-50% YoY sales growth in the coming years, based on its current capacity expansion pipeline, spec migration and potential price hikes. M9 sales mix is guided to reach double-digit % in 2027. In terms of raw material shortage, the company currently sees tight supply from highend copper foil and glass fibers but the tightness should gradually ease in the next 12 months. For low earth orbit (LEO), the company see spec migration from M6 to M7 for user terminals in 2026 and from M7 to M8 for the satellites in 2027. Currently, the company guides 20% YoY growth in its LEO sales in 2027. For ABF CCL, the company sees good progress in the qualification and supposedly could know the results in 4Q26.
Flash |
Buy
Price (04 Sep 26 13:30)
NT$5,415.00 NT$6,000.00
Target price
Expected share price return
10.8%
Expected dividend yield
0.5%
Expected total return Market Cap
11.3%
NT$1,940,309M US$61,151M
Jack Chen AC
+886-2-8726-9091 jack1.chen@citi.com
Laura (Chia Yi) Chen +886-2-8726-9090
laura.cy.chen@citi.com
Nicholas Lai
+886-2-8726-9093 nicholas.lai@citi.com
See Appendix A-1 for Analyst Certification, Important Disclosures and Research Analyst Affiliations
Prepared for [讀者資訊已遮蔽]
NT$
6,600
5,500
4,400
3,300
2,200
1,100 wun
Sep 25
• 11% Upside
04 Sep 26
NT$5,415.00
NT$ 2,000.00
• 63% Downside
•• NT$6,600.00
• NT$6,000.00
BASE Assumptions
• High market share in Al ASIC customers' Al servers
@ • Major supplier of AI GPU customers' Al switch boards
- Adoption of M9 in next-gen Al GPU customers' Al servers
- Spec migration to M8 in Al ASIC servers with higher layer count
- BEAR Assumptions
Y33' New CCL competitor joining; lower market share in Al ASIC customers' Al servers
• New CCL competitor joining; lower market share in AI GPU customers' Al servers.
- Less adoption of M9 or Q-glass in the next Al servers
Prepared for [讀者資訊已遮蔽]
A 22% Upside
NT$ 6,000.00
Bull/Bear: Elite Material
Prepared for [讀者資訊已遮蔽]
Elite Material
Valuation
Our target price for EMC is set at NT$6,000, based on a target PE multiple of 30x on our 2027E EPS average. We believe our target PE multiple, at the peak of its forward PE average in the past 5 years, is justified by a strong earnings outlook supported by its leading position in CCL supply for AI GPU and ASIC (high m/s) from 2026E onwards. We also believe the continued spec upgrade for CCL and price hikes should help support its margin expansion going forward. At our target price, the shares would trade at 23.6x/13.2x 2026E/27E PB.
Risks
Citi's quant system rates EMC high-risk given high share price volatility, which we largely attribute to frequent debates over the spec upgrade for next-gen AI servers. In general, we believe some investors initially tend to have high hope for aggressive spec upgrade without sufficiently considering the scalability and cost structure of CCL products, which then leads to a shortfall in the end. However, from a longer-term perspective, we see a decent and clear spec upgrade trend with meaningful ASP growth potential among AI servers of different generations. As such, we do not assign a high-risk rating.
Key downside risks that could prevent the shares from reaching our target price include: 1) a slower-than-expected CCL upgrade trend; 2) weaker-than-expected AI server demand; 3) production bottlenecks in AI supply chain (eg, glass, copper foil, foundry or OSAT); 4) unexpected share loss in key AI server projects; and 5) stricter practice of OOC policy by end customers.
Elite Material (2383.TW)
Analyst: Jack Chen
TWD
7,500
5,000
If you are visually impaired and would like to speak to a Citi representative regarding the details of the graphics in this document, please call USA 1-888-500-5008 (TTY: 711), from outside the US +1-210-677-3788 .......*"
Date
Appendix A-1
2711-Mar-26 12:43:44
1 *3,000.00
2,450.00
29-101-26 20:17:20