報告_Citi_鴻勁7769_20260730

PDF 原檔：報告_Citi_鴻勁7769_20260730_original.pdf

圖片清單（已驗證 2026-07-31）

原始內容

(RIC: ((69.IW, BB: ((6911)

TWD

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

Prepared for Kevin Lu

30 Jul 2026 12:46:47 ET │ 15 pages

Hon Precision (7769.TW)

Secular growth intact, with more upside from higher content expansion

CITI'S TAKE

Hon's 2Q26 net profit of NT$5,476m (+18% QoQ/+122% YoY) came in stronger than our and Street (Bloomberg) expectation by 7-10% as revenues reached a quarterly record high of NT$13.8bn. Nonetheless, OPM declined to 48.5% (vs. 1Q26's 50%) and missed our expectation as it incurred higher stock-based compensation expense, which Hon views as only a one-time event. Looking ahead, we expect continued capacity ramps to support the stronger ATC handler deliveries for its Google TPU, Tesla AI5, and AMD CPU projects in 2H26. For 2027, aside from solid unit shipment growth, we see upside coming from more content value growth, driven by higher adoption of large packaging tray, higher thermal requirement for next generation AI chips, and rising AOI adoption. We reiterate our Buy rating.

Strong capacity expansion on track (+50% in 2027) -Hon raises 2026 full-year capacity growth from +40% to +45% now and targets a +50% capacity growth for 2027. By location, 15% of total new capacity addition will come online in 1Q27 at its China factories, 15% addition from its existing Taichung main plants, and 20% from its newly acquired Taichung plant from 1Q27 onwards. Hon is also seeing lengthening order visibility as supported by ongoing OSATs customers new expansion in US/SG/TW and expanding AI chips demand into CPU and ASIC. Given current demand continues to outstrip supply, we believe Hon is actively looking for new land/factory acquisition opportunity and view any new expansion announcement as upside surprise.

Stronger content value growth into next year -We believe that one of the major surprises from today's earnings call was management's comment on the fast penetration of large package handlers, expected to be 10-20% in 1H27 and likely c50% in 2H27, in view of the rising package size in clients' chips roadmaps. Given mega tray design, higher automation and thermal requirements, the company expects it to carry a +25% higher ASP. Together with higher ATC system specs, higher AOI adoption, and CPO insertion 4 solutions deliveries, we expect double-digit content value growth in 2027.

Accretive margins from China business -Given China ' s limited resources for front end chips manufacturing, the requirement for their AI chips ' heat dissipation and system design has increased, which should lead to higher demand for higher-spec ATC handlers and more customized cold plates. We view this as a positive opportunity for Hon to deliver a high-margin products solution. Hon has already seen its orders from China growing by 60% YoY this year and now expects them to more than double next year.

Earnings Summary

Source: Powered by dataCentral

n Buy

Catalyst Watch: Upside, expires 27-AUG-26

Price (30 Jul 26 13:30)

NT$5,620.00

Target price

NT$11,000.00

Expected share price

return

95.7%

Expected dividend yield

0.6%

Expected total return

96.3%

Market Cap

NT$1,011,207M US$31,249M

Price Performance (RIC: 7769.TW, BB: 7769 TT)

Nicholas Lai AC

+886-2-8726-9093

nicholas.lai@citi.com

Laura (Chia Yi) Chen

+886-2-8726-9090

laura.cy.chen@citi.com

Jack Chen +886-2-8726-9091

jack1.chen@citi.com

Michael Hung

+886-2-8726-9092

michael.hung@citi.com

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

Prepared for Kevin Lu

Figure 1. Hon - 22<0 Results Comparison

2Q25

Actual

6,885

4,037

58.6%

3,643

52.9%

2,466

15.26

(NT$mn)

Revenue

Gross profit |

Gross margin

Op. profit

OP margin

Net income

EPS (NT$)

7,737

56.1%

6,686

48.5%

5,476

30.44

6,032

56.2%

5,360

50.0%

4,624

25.70

28%

• 0.1 ppt

25%

-1.5 ppt

18%

18%

Y/Y

100%

92%

-2.6 ppt

84%

-4.4ppt

122%

99%

© 2026 Citigroun Inc. No redistribution without Citigroun's written nermission.

Prepared for Kevin Lu

2026

Citi

11,627

6,689

57.5%

6,148

52.9%

4,996

27.77

Dift.

19%

16%

-1.4ppt

9%

-4.4ppt

10%

10%

2026

Cons

12,546

7,134

56.9%

6,319

50.4%

5,140

29.13

Diff.

10%

8%

• 0.8 ppt

6%

-1.9 ppt

7%

5%

Figure 1. Hon - 2Q26 Results Comparison

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

Source: Citi Research, Bloomberg

Maintain Buy with TP at NT$11,000 -We raise our 2026/27/28 earnings forecast by 1%/6%/6% to reflect the stronger content value growth potentials into next year. Given sector-wide multiple compression due to current uncertain macro outlook, we slightly revise down our target PER to 35x (from 36x) 2027/28 EPS. Our TP is at NT$11,000, and we reiterate Buy as we are constructive on Hon's secular growth outlook and see upside from its development in CPO insertion 4 business.

Figure 2. Hon - Estimates Revisions

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

Source: Citi Research

ure s. Hon - Forecast summary gure 4. Hon - Forward P/B band & ROE

igure 3. Hon - Forward P/E band

NTS

NI$

7,000

9,000

Revenue

6,000

COGS

8,000

Gross Profit

7,000

Operating Expense

5,000

6,000

4,000

SG&A expenses

5,000

R&D expenses

EBIT

Pre- Tax Profit

4,000

3,000

Tax

3,000

Net Profit

2,000

2,000

1,000

1,000

EPS (NT$)

Margins (%)

Gross Margin

Operating Margin

Net Margin

Nov-24

Dec-24

Nov-24

Sequential Growth (%)

Jan

Nov-24

Dec-24

— Share Price -

Revenue

Gross Profit

EBIT

2026 Citioroun Inc No redistribution without Citioroun's written nermission.

Net Profit

EPS

126 Citioroun Inc No redistribution without Citioroun's written nermission

4QE

15,324

-6,488

8,836

-1,166

-581

-664

7,670

7,945

-1,630

6,315

2027

20E

22,085

-8,726

13,359

-1,150

-618

-486

12,210

12,487

-2,730

9,756

30E

13,892

-6,020

7,872

-811

-398

-363

7,061

7,266

-1,457

5,809

2026E

53,735

-23,258

30,476

-3,700

-1,954

-1,746

26,717

28,086

-5,861

22,225

2026

45%

20E

13,794

-6,057

40%

35%

7,737

-1,051

30%

-660

25%

-345

6,686

20%

7,076

-1,600

15%

10%

40E

28,799

-11,592

17,207

-2,031

-949

-1,161

15,176

15,481

-3,176

12,306

30E

25,939

-10,726

15,213

-1,264

-613

-601

13,950

14,185

-2,845

11,340

2027E

94,814

-38,526

56.288

-5,439

-2,618

-2,822

50,849

52,102

-10,765

41,336

2028E

159,627

-62,285

97,342

-7,881

-3,606

-4,276

89.461

90,674

-18,738

71,936

© 2026 Citigroup Inc. No redistribution without Citigroup's written permission. Source: Citi Research, company data

Figure 5. Hon - Forecast Summary

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

Source: Citi Research, company data

2025

30,271

-13,157

17,114

-2,068

-1,077|

-1,039

15,046

15,584

-3,222

12,362

© 2026 Citigroup Inc. No redistribution without Citigroup's written permission. Source: Citi Research, company data

5,476

2025

-394

-185

-163

3,643

3,156

-690

2,466

Prepared for Kevin Lu

-360

-218

-208

3,133

3,235

-667

2,568

-565

-276

-239

4,166

4,524

-907

3,617

40

-4,423

9,276

4,852

-749

-398

-430

4,104

4,669

-958

3,711

1Q

10,725

-4,693

6,032

-672

-315

-374

5,360

5,798

-1,174

4,624

10E

17,991

-7,483

10,508

-994

-438

-574

9,514

9,949

-2,014

7,934

Prepared for Kevin Lu

Catalyst Watch on Hon Precision (7769.TW)

Direction:

Upside

Duration:

Within 90 Days (expires 27 Aug 2026)

Date Added:

28 May 2026

Catalyst:

Thematic driven

We are constructive on Hon Precision's earnings growth outlook driven by its solid engagement in global leading AI projects. For 2Q earnings, our estimates are higher than consensus as we expect higher margins from a better sales mix and operating leverage, which we believe could drive strong >100% YoY earnings growth. Also, though a long-term opportunity, we believe co-packaged optics (CPO) engagement with key customers could also drive significant upside potential.

NT$

13k

11k

8,668

6,501

4,334

2,167

0

Jul 25

• Faster-than-expected development in its CPO business

NT$ 6,500.00

• 16% Upside

• NT$13,000.00

A 131% Upside

NT$ 11,000.00

496% Upside

Bull/Bear: Hon Precision (7769.TW)

BASE Assumptions

• Solid 3-year sales CAGR of ~70%
• Strong 3-year earnings CAGR of >75%

BEAR Assumptions

• Unexpected share loss at its major Al projects

• {j. Slower-than-expected capacity ramp for its new facilities
• Weaker-than-expected development in its CPO business

Prepared for Kevin Lu

Prepared for Kevin Lu

Hon Precision

Company description

Hon Precision is a leading Taiwanese manufacturer specializing in IC semiconductor automation equipment. Headquartered in Taichung City, Taiwan, it is most known globally for providing high-precision IC test handlers, temperature control solutions, and complete automated integrated solutions for major OSAT and IDM customers.

Investment strategy

We have a Buy rating on Hon Precision as we view it sitting in a structurally protected position at the heart of the AI/HPC back-end test cycle, with growth visibility extending well into the next few years - the company holds >90% share of the AI/HPC FT handler market and 60-70% of the ASIC SLT market. We forecast a solid strong sales revenue CAGR in 2025-28E with gross margin continuing to expand. In our view, the binding constraint on Hon Precision's near-term trajectory is now capacity, rather than demand placing the company in the early phase of a multi-year structural growth and margin-expansion cycle.

Valuation

Our target price of NT$11,000 is based on a target PER multiple of 36x applied to the average of our 2027E/28E EPS estimates. Our PER target of 35x is set at 1-std above its 1-year PER average, justified by its high share of the AI/HPC testing handler market, which we estimate could support an earnings CAGR of 77% in 2025-28, higher than its 3-year CAGR at c40% in 2022-25. Our estimated 77% earning CAGR is also higher than the +40% average (Bloomberg consensus) of its global testing equipment peers. As its peers have been trading at average 36x PER on 2027/28 consensus EPS in the past 1 year, we believe Hon Precision deserves a further re-rating to our target PER of 36x.

Risks

Our quantitative risk rating system, which looks at historical share price volatility, rates Hon Precision High Risk. However, we are not assigning a High Risk rating as we forecast an earnings CAGR of >75%, significantly stronger than the growth outlook for its global peers. Also, we note its dominant position in AI/HPC handler market and expanding market TAM opportunity, which support our constructive view over its growth outlook.

Key downside risks that could impede the shares from reaching our target price: 1) Global AI demand slowdown driving weaker capacity build for semiconductor equipment; 2) unexpected share losses at its major AI projects; 3) slower-than-expected capacity ramp at its new facilities, or the company taking a long time to find/secure new sites; 4) slower-thanexpected development of its CPO business; 5) shorter-than-expected testing time leading to lower demand for its products; 6) weak adoption of high-

Hon Precision (7769.TW)

Analyst: Nicholas Lai

Prepared for Kevin Lu

Date

TWD

7,500

5,000

2,500

Covered

Not covered premium cold plate products; and 7) increasing competition from new entrants. .."*...·....

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 Rating/target price changes above reflect Eastern Time

Appendix A-1

Short-Term View/Catalyst Watch