報告_Citi_欣興3037_20260729

PDF 原檔：報告_Citi_欣興3037_20260729_original.pdf

圖片清單（已驗證 2026-07-31）

原始內容

(RIC: 3036.1W, BB: 303611)

TWD

1,000

800

600

400

200

0

Prepared for Kevin Lu

29 Jul 2026 12:14:04 ET │ 15 pages

Sep

Dec

Mar

Jun

Unimicron (3037.TW)

Much GM upside to come on ABF upcycle; Buy

CITI'S TAKE

Unimicron held 2Q26 analyst meeting after the market. Investors focused more on its profitability outlook, capacity expansion plan and EMIB-T development. The company is doing its best to ramp more ABF capacity to meet demand. Profitability would be supported by 1) price hike, 2) enhanced product, and 3) guaranteed minimum GM profiles for advanced products backed by agreements. Overall, we walked away from the meeting with the impression of robust ABF seller's market. 2Q26 strong GM beat is evidence of robust ABF demand. We remain constructive on the ABF sector and reiterate our Buy rating with unchanged DCF-based TP NT$1,500 (implied 31x 2027E EPS).

2Q26 GM in line with our street-high GM forecast -Our street-high 2Q26 GM forecast of 25% received lots of skepticism from investors before the results and 2Q26 GM posted 24.8% (+6.8ppts QoQ) in line with Citi forecast. The company attributed GM expansion to price hike (majorly), improving UTR/yield and enhanced product mix. 2Q26 ABF sales grew 22% QoQ vs group sales QoQ growth of 15%. OPM also saw better leverage, resulting in 0.3ppts/2.7ppts higher than Citi/consensus forecasts. Overall, OP came in line with Citi forecasts but beat consensus by 21%. ABF/BT UTR was 90%+/80-95% in 2Q26.

Continued growth in 3Q26 and more ABF capacity built-up -The mgmt. guided 3Q26 sales to grow QoQ with GM improving continuously backed by rising ABF and HDI demand, streamlined capacity and price hike. Currently, the company is aggressively adding its new ABF capacity via either new built-up plan or capacity conversion from BT to ABF, given better profitability. The company also raised its 2026 capex from NT$34bn to NT$54bn mainly due to rising ABF demand. For T glass shortage, the company indicated qualification of new vendors is progressing well. To note that, we slightly cut our 3Q26 GM forecast from 29% to 28.5% (+3.7ppt QoQ), given likely depreciation recognized from its Thailand plant ramp for HDI. For its HDI strategies, the company would avoid competition against Chinese peers and focus more on capacity built outside of China. Overall, Unimicron would not pursue maximizing its HDI capacity. Meanwhile, the company also sees strong demand from optical transceivers with some demand calling for non-Chinese suppliers given geopolitical concerns. The company would ramp new mSAP capacity from 4Q26 to capture the demand.

Earnings Summary

Source: Powered by dataCentral

See Appendix A-1 for Analyst Certification, Important Disclosures and Research Analyst Affiliations.

n Buy

Price (29 Jul 26 13:30)

NT$688.00

Target price

NT$1,500.00

Expected share price

return

118.0%

Expected dividend yield

1.5%

Expected total return

119.5%

Market Cap

NT$1,093,145M US$33,766M

Price Performance (RIC: 3037.TW, BB: 3037 TT)

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

Prepared for Kevin Lu

Figure 1. Unimicron's 2026 results

2Q26

2Q25

(NTSmn)

Revenue

Gross profit

OP profit

Non-op

PBT

Tax

Minority

Net Income

EPS (NTS)

GM

OPEX ratio

OPM

Tax rate

NM

YoY

32%

151%

341%

4266%

44197%

44197%

11.7 ppt

-0.9 ppt

10.9 ppt

30.5 ppt

QOQ

15%

58%

141%

147%

160%

160%

6.8 ppt

1.3 ppt

8.1 ppt

17.1 ppt

10,638

6,651

8,925

15,576

(2,233)

(227)

13,115

8.25

24.8%

-9.3%

15.5%

14.3%

30.6%

1Q26

6,726

2,757

3,542

6,299

(918)

(338)

5,043

3.17

18.0%

-10.6%

7.4%

14.6%

13.5%

4,246

1,509

(1,153)

357

(97)

(231)

30

0.02

13.1%

-8.4%

4.6%

27.1%

0.1%

C 2026 Citigrouo Inc. No redistribution without Citigrouo's written permission.

Prepared for Kevin Lu

2Q26

Citi

42,341

10,604

6,436

5,354

11,790

2Q26

diff Consensus

1%

42,708

0%

3%

32%

9,252

5,486

2,021

7,507

diff

0%

15%

21%

107%

EMIB-T under development; optimism about L-T GM; glass substrate still far

away For EMIB-T, Unimicron and another two Japanese peers are developing this technology with yield rate target of 50% reached at the first phase. Mass production timing would be in 2027. Despite investors' concerns over poor GM profile for EMIB-T on low yield rate, the company indicated there are guaranteed minimum GM profiles on low yield. And if higher yield rate could be met, there would be extra bonus awarded based on the incentive program. The mgmt. also indicated that she thinks 50-60% GM profile for ABF substrate is a reasonable range in the mid to long term in this cycle. For glass substrate, the company is working with multiple customers and expects mass production would not occur until 2030.

Earnings adjustment; reiterate our Buy rating -We adjust our 2026/27/28E earnings to factor in 1) depreciation from Thailand plant and 2) dilution impact from its recent fundraising. We remain constructive on the ABF sector and reiterate our Buy rating with unchanged DCF-based TP NT$1,500 (implied 31x 2027E EPS).

Prepared for Kevin Lu

Figure 2. Unimicron - Earnings Revisions

© 2026 Citigroup Inc. No redistribution without Citigroup's written permission.

Source: Citi Research estimates

Figure 3. Unimicron - Key Earnings Estimates

© 2026 Citigroup Inc. No redistribution without Citigroup's written permission.

Source: Company data, Citi Research estimates

Prepared for Kevin Lu

NT$

1,704

1,420

1,136

852

568

284

0

Jul 25

• Rapid improvement in the yield of HDI for Al products

4147% Upside

NT$ 1,500.00

A 118% Upside

Bull/Bear: Unimicron (3037.TW)

• ASP hike on T-glass shortage

BASE Assumptions

• +42%/+67% revenue YoY in 26/27E
• 26.4%/40.1% GM and 17.1%/32.0% OPM in 26/27E
• BEAR Assumptions

• Weakening ABF demand, dragged by recession

• GM pressure if tariff is not removed or stays at high levels
• Slow improvement in the yield of HDI for Al products

Prepared for Kevin Lu

NT$ 800.00

A 16% Upside

Prepared for Kevin Lu

Unimicron

Company description

Established in 1990, Unimicron is the world's No.1 PCB maker and HDI board maker. After the acquisition of PPT in late 2009, its revenue exposure to substrate has surpassed 40%, with the rest almost equally shared by conventional PCB and HDI. Unimicron has manufacturing sites in Taiwan and China (Suzhou, Kunshan, Shenzhen). UMC is the largest shareholder, with a ~13% stake.

Investment strategy

We rate Unimicron shares a Buy. Our positive view is premised on: more upside potential in the ABF segment thanks to product-mix improvements, better pricing on more complex product upgrade, and capacity expansion. Despite macro uncertainty, from a long-term perspective, we believe the tightness in ABF is unlikely to ease without much new capacity ramped aggressively in the upcoming years, and Unimicron should be the largest beneficiary with its scale in ABF. Thanks to AI GPU/ASIC demand, we now see strong growth in 2026/27E ABF consumption. We believe Unimicron could see strong revenue growth again as it did in 2019-21 from both ABF new capacity and a BT rebound.

Valuation

Our target price for Unimicron is NT$1,500. We use a 1-year forward-looking DCF-based valuation (ie, end-2027) to reflect Unimicron's ability to generate stable cash. With a risk-free rate of 4.3% (10-year government bond rate), a market risk premium of 7%, and an equity beta of 1.43 (2-year weekly share price), we calculate Unimicron's WACC as 13.7%. Our target price is equivalent to 66x/31x 2026/27E EPS, which is higher than the +1std level of consensus PE multiple of the past five years. However, as the market focuses on 2027 upcycle, we believe valuation on 2027E EPS is still in line with historical peak valuations of 25-30x during the last upcycles.

Risks

Key downside risks that could mean Unimicron shares trade below our target price include: 1) weaker-than-expected HDI business; 2) significant increase in ABF supply in the industry; and 3) stronger-than-expected margin pressure from depreciation due to higher capex investments.

Unimicron (3037.TW)

Analyst: Jack Chen

TWD

1,000

500

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

26 - Feb-24 10:21:09

*247.44

194.00

22-Apr-25 12:10:54