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報告_GS_全新2455_20260907

更新 2026-09-09

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原始內容

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VPEC (2455.TW)

Aug revenue strong beat; Product mix upgrade leading to margin expansion; Buy with 12M TP raised to NT$793

2455.TW

12m Pri c e Target:

NT$793.00

Pri c e:

NT$500.00

Upside:

58.6%

VPEC's Jul and Aug revenue delivered double digit YoY growth, or 23% / 25% higher than our estimate, re fl ecting strong AI data center optical networking demand, InP substrate supply getting better, and VPEC's continuous customers penetration. We expect sequential revenues growth through Dec 2026, leading 3Q26 / 4Q26E revenues at 44% / 23% QoQ, and the product mix upgrade toward AI data center optical networking would continue to drive the GM expansion. VPEC's July net margin up to 27% from 18% / 22% in 3Q25 / 2Q26, re fl ecting the strong product mix upgrade. Maintain Buy with 12M TP raised to NT$793 (implied 69x 2027E PE vs. +61% NI YoY in 2027-28E). Read more: Global Optical Module TAM.

BUY

Verena Jeng

+852-2978-1681 | verena.jeng@gs.com Goldman Sachs (Asia) L.L.C.

Allen Chang

+852-2978-2930 | allen.k.chang@gs.com Goldman Sachs (Asia) L.L.C.

Yifan Hu

+852-2978-0996 | yifan.hu@gs.com Goldman Sachs (Asia) L.L.C.

Key Data _____________________________________

Market cap: NT$93.8bn / $3.0bn

Enterprise value: NT$93.0bn / $2.9bn

3m ADTV: NT$4.0bn / $126.6mn

Taiwan

Greater China Technology

M&A Rank: 3

Leases incl. in net debt & EV?: Yes

GS Forecast 12/25 __________ 12/26E 12/27E 12/28E
Revenue(NT$mn) New 3,380.1 5,009.3 7,437.4 10,934.4
Revenue (NT$ mn) Old 3,380.1 4,688.2 6,532.3 8,713.5
EBITDA (NT$ mn) 960.2 1,827.8 2,970.7 4,413.2
EPS(NT$) New 2.95 6.84 11.43 17.66
EPS (NT$) Old 2.95 6.12 9.65 13.63
P/E (X) 46.4 73.1 43.7 28.3
P/B (X) 7.7 27.3 25.6 23.4
Dividend yield (%) 1.9 1.2 2.0 3.2
CROCI (%) 11.5 21.8 33.7 51.3
6/26 9/26E 12/26E 3/27E
EPS (NT$) 1.14 1.89 2.77 2.35

Source: Company data, Goldman Sachs Research estimates. See disclosures for details.

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the fi rm may have a con fl ict of interest that could a ff ect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certi fi cation and other important disclosures, see the Disclosure Appendix, or go to ed as research e92c7a75ab8b4efbba794e6b187208c8

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BUY

VPEC (2455.TW) Rating since Feb 13, 2025

Ratios & Valuation __________________________________________

12/25 12/26E 12/27E 12/28E
P/E (X) 46.4 73.1 43.7 28.3
P/B (X) 7.7 27.3 25.6 23.4
FCF yield (%) 1.1 1.0 1.8 3.6
EV/EBITDAR (X) 26.0 50.2 30.7 20.4
EV/EBITDA (excl. leases) (X) 26.0 50.2 30.7 20.4
CROCI (%) 11.5 21.8 33.7 51.3
ROE (%) 16.5 38.1 60.5 86.4
Net debt/equity (%) (10.5) (21.5) (34.2) (65.6)
Net debt/equity (excl. leases) (%) (10.5) (21.5) (34.2) (65.6)
Interest cover (X) 73.5 63.1 109.0 169.8
Days inventory outst, sales 71.5 54.2 48.7 46.0
Receivable days 48.6 43.0 42.0 41.0
Days p ayable outstandin g 108.4 108.0 108.0 108.0
DuPont ROE (%) 16.6 37.4 58.6 82.7
Turnover (X) 0.7 0.9 1.0 1.2
L evera g e (X) 1.4 1.7 1.9 2.3
G ross cas h invested (ex cas h ) (NT $ ) 7,330.5 7,385.3 7,453.1 6,765.2
Avera g e ca p ital e mp loyed (NT $ ) 2,801.6 2,820.6 2,548.2 1,891.4
BVP S (NT $ ) 17.72 18.29 19.50 21.37

Growth & Margins (%) ______________________________________

12/25 12/26E 12/27E 12/28E
Total revenue growth 4 . 3 48 . 2 48 . 5 47 . 0
EBITDA growth (4 . 9) 90 . 4 62 . 5 48 . 6
EPS growth ( 1 8 . 5) 1 32 .1 67 .1 54 . 5
DPS growth ( 1 7 . 4) 1 32 .1 67 .1 54 . 5
EBIT margin 1 9 . 8 30 . 2 35 . 2 37 . 3
EBITDA margin 28 . 4 36 . 5 39 . 9 40 . 4
Net income margin 1 6 . 2 25 . 6 28 . 8 30 . 3

Price Performance __________________________________________

Source: FactSet. Price as of 7 Sep 2026 close.

Income Statement (NT$ mn) ________________________________

12/25 12/26E 12/27E 12/28E
To t a l r e v e nu e 3 ,380 . 1 5,009 . 3 7,437 . 4 10,934 . 4
Cost of goods sold ( 2 ,160 . 4) ( 2 ,857 . 4) (3,935 . 3) (5,5 2 9 . 5)
SG&A (167 . 0) (196 . 1) ( 2 75 . 9) (379 . 4)
R&D (383 . 4) (441 . 0) (609 . 9) (951 . 3)
Other operating inc . /(exp . ) E BITDA -- 9 6 0. 2 -- 1 , 827 . 8 -- 2 ,9 7 0. 7 -- 4,4 1 3. 2
Depreciation& amortization ( 2 91 . 0) (313 . 0) (354 . 4) (339 . 0)
E BIT 66 9.3 , 51 4. 8 2 , 616 .3 4,0 7 4. 2
Net interest inc . /(exp . ) 10 . 5 1 (7 . 0 . 1 9 . 3
Income/(loss) from associates -- 9) -- -- -- 4, 1 3 5 . 6
Pre-tax pro fi t 667 .4 (119 . 4) 1 , 571 . 5 ( 2 88 . 8) 2 , 676 .4 (53 2. 6) (8 2 3 . 0)
Provision for taxes Minority interest -- -- -- --
Preferred dividends -- -- -- --
N et inc . ( pre-ex c ept i o n a ls) 5 4 7 .9 1 , 282 . 7 3,3 12 .
Post-tax exceptionals -- -- 2 , 1 43. 8 -- 6 --
N et inc . ( po s t-ex c ept i o n a ls) 5 4 7 .9 1 , 282 . 7 2 , 1 43. 8 3,3 12 . 6
E P S(b a sic , pre-ex c ept ) (N T $) 2 .9 6 6 .94 11 . 5 9 17 .9 1
E P S(dilu te d , pre-ex c ept ) (N T $) 2 .9 5 6 . 8 4 11 .43 17 . 66
E P S(b a sic , po s t-ex c ept ) (N T $) 2 .9 6 6 .94 11 . 5 9 17 .9 1
E P S(dilu te d , po s t-ex c ept ) (N T $) 2 .9 5 6 . 8 4 11 .43 17 . 66
DPS (NT$) 2. 63 6 . 1 2 10 .22 15 . 79
Div . payout ratio (%) 89 . 88 .2 88 88 .2
Balance Sheet (NT$ mn) 0 .2 ______
C a sh& c a sh equiv a lents 12/25 945.0 12/26E 1,338.8 12/27E 1,852.2 12/28E 3,229.3 1,406.6
Accounts receiv a ble Inventory 518.6 661.7 781.4 1,049.9 1,202.4 1,554.7
Other current a 706.0 137.3 137.3 137.3 137.3
ssets Total current assets 2 , 3 0 6 .9 2 ,9 1 9. 2 4, 2 4 1 . 8 6 , 327 .9
Net PP&E 2,315.2 2,861.6 2,807.5 2,788.3 8.1
Net int a ngibles 7.9 8.0 8.0
Tot a l investments Other long-term a 0.0 0.0 0.0 0.0 46.7
ssets Total assets 46.7 4, 676 . 7 46.7 5 , 835 .4 46.7 7 , 1 0 3 .9 9, 171 .0
Accounts p a y a ble 662.5 1,028.5 1,300.4 1,971.9
Short-term debt -- -- -- -- --
Short-term le a se li a bilities -- -- -- 2,588.1
Other current li a bilities 115.8 772.9 1,542.9 4, 56 0.0
Total current liabilities 778 . 3 1 , 8 0 1 .4 2 , 8 4 3 . 3 600.0
L ong-term debt L ong-term le a se li a bilities 600.0 -- 600.0 -- 600.0 -- --
Other long-term li a bilities 3.6 3.6 3.6 3.6
Total long-term liabilities 6 0 3 . 6 6 0 3 . 6 6 0 3 . 6 6 0 3 . 6
Total liabilities Preferred sh a res 1 , 382 .0 -- 2 ,40 5 . 1 -- 3 ,44 6 .9 -- 5 , 163 . 7 --
Tot a l commonequity 3,294.7 3,430.3 3,657.0 0.0 4,007.3 --
Minority interest 0.0 0.0
676 . , 835 7 , 1 0 3 .9 9, 171 .0
Total liabilities &equity 4, 7 5 .4
Net debt, a djusted (345.0) (738.8) (1,252.2) (2,629.3)
Cash Flow (NT$ mn) __________ 12/25 12/26E 1,282.7 12/27E 12/28E 3,312.6
Net income D&Aadd-back 547. 9 2 9 1.0 313.0 2,143.8 354.4 33 9 .0
Minority interest add-back Net (inc)/dec working -- (184.1) -- -- -- (37.4)
capital Other operating cash flow (15.2) 6 3 9 . 6 147.5 (537.4) --
Cash flow fro m operations -- 1 , 7 43. 2 -- 1 , 96 0. 8 3, 61 4. 2
Capital expenditures (361.1) -- (856.6) -- (2 9 7.5) -- (317.1) --
Acquisitions Divestitures -- -- --
-- (2.8)
Others Cash flow fro m investing (2.6) (3 6 3. 7 ) (2.8) ( 859 .4) (300.3) (2.8) (3 19 . 9 )
--
Repayment of lease liabilities -- -- -- 9 17.1)
Dividends paid(common& pref) (5 9 1.7) 100.0 (4 9 0.0) (1,147.1) (1, 0.0
Inc/(dec) in debt Other financing cash (15.0) 0.0 0.0 0.0 0.0 0.0 917 . 1 )
flows Cash flow fro m financing ( 5 0 6 . 7 ) (4 9 0.0) 3 9 3. ( 1 , 1 4 7 . 1 ) 51 1 , 1 ,3 77 . 2
Total cash flow ( 2 30. 8 ) 8 3.3 (
7.1
Free cash flow 278.4 886.7 1,663.3 3,2 9

Source: Company data, Goldman Sachs Research estimates.

e92c7a75ab8b4efbba794e6b187208c8

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Exhibit 1: VPEC revenues by products and GM trend

Exhibit 2: VPEC Jul 2026 net income

NT$m 3Q25 2Q26 Jul-26 Rev 913 965 422 Net income 160 214 116 NM (%) 18% 22% 27%

Source: Company data, Goldman Sachs Global Investment Research

Source: Company data

Exhibit 3: VPEC 2Q26 results snapshot

Jul-26 Aug-26 Sep-26 (E) Oct-26 (E) Nov-26 (E) Dec-26 (E) 3Q26E 4Q26E
Rev (NT$m) 422 471 493 518 559 622 1,386 1,699
YoY 45% 71% 42% 46% 96% 95% 52% 77%
MoM/QoQ 29% 12% 5% 5% 8% 11% 44% 23%
GS (NT$m) 342 377
Actual vs. GS 23% 25%

Source: Company data, Goldman Sachs Global Investment Research, Bloomberg

Earnings revision: We factor in VPEC's Jul-Aug revenues and raise our 2026-28E net incomes by 12% / 18% / 30%, mainly on higher revenues and GMs. 2026-28E revenues are revised up by 7% / 14% / 25%, mainly on higher contribution from optoelectronics business, driven by the strong end demand of AI data center optical networking, better InP substrate supply, and VPEC's customers' expansion and product expansion from CW lasers to EML, along with speci fi cation upgrade. Our 2026-28E GMs are revised up on rising contribution from optoelectronics business, which carries a higher margin than other product lines. We revise up 2027-28E opex ratios, mainly on higher R&D expense to collaborate with key customers on next generation optical networking products.

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Exhibit 4: Earnings revision

2026E 2026E 2026E 2027E 2027E 2027E 2028E 2028E 2028E
NT$m Old New Diff% Old New Diff% Old New Diff%
Revenues 4,688 5,009 7% 6,532 7,437 14% 8,714 10,934 25%
GP 1,945 2,152 11% 2,965 3,502 18% 4,132 5,405 31%
OP 1,346 1,515 13% 2,201 2,616 19% 3,133 4,074 30%
Net income 1,148 1,283 12% 1,811 2,144 18% 2,556 3,313 30%
Margins
GM 41.5% 43.0% 45.4% 47.1% 47.4% 49.4%
OPM 28.7% 30.2% 33.7% 35.2% 36.0% 37.3%
NM 24.5% 25.6% 27.7% 28.8% 29.3% 30.3%

Source: Goldman Sachs Global Investment Research

Exhibit 5: Changes by products

CHG 2026E 2027E 2028E GM 2026E 2027E 2028E
NEW 5,009 7,437 10,934 NEW 43% 47% 49%
Microelectronics - Android PA epi-wafer 1,154 1,104 1,057 Microelectronics - Android PA epi-wafer 31% 31% 31%
Microelectronics - iPhone PA epi-wafer 719 726 730 Microelectronics - iPhone PA epi-wafer 31% 31% 31%
Microelectronics -WiFi and others epi-wafer 877 1,053 1,264 Microelectronics -WiFi and others epi-wafer 31% 31% 31%
Optoelectronics - Silicon Photonics epi-wafer 1,445 3,476 6,546 Optoelectronics - Silicon Photonics epi-wafer 59% 58% 57%
Optoelectronics - Data center (ex SiPh) epi-wafer 603 868 1,128 Optoelectronics - Data center (ex SiPh) epi-wafer 56% 56% 55%
Optoelectronics - Non Data center epi-wafer 210 210 210 Optoelectronics - Non Data center epi-wafer 50% 50% 50%
OLD 4,688 6,532 8,714 OLD 41% 45% 47%
Microelectronics - Android PA epi-wafer 1,225 1,154 1,091 Microelectronics - Android PA epi-wafer 31% 31% 31%
Microelectronics - iPhone PA epi-wafer 719 726 730 Microelectronics - iPhone PA epi-wafer 31% 31% 31%
Microelectronics -WiFi and others epi-wafer 872 1,046 1,255 Microelectronics -WiFi and others epi-wafer 31% 31% 31%
Optoelectronics - Silicon Photonics epi-wafer 1,059 2,528 4,299 Optoelectronics - Silicon Photonics epi-wafer 59% 58% 57%
Optoelectronics - Data center (ex SiPh) epi-wafer 603 868 1,128 Optoelectronics - Data center (ex SiPh) epi-wafer 56% 56% 55%
Optoelectronics - Non Data center epi-wafer 210 210 210 Optoelectronics - Non Data center epi-wafer 50% 50% 50%
CHG 7% 14% 25% CHG 1.5ppts 1.7ppts 2ppts
Microelectronics - Android PA epi-wafer -6% -4% -3% Microelectronics - Android PA epi-wafer 0ppts 0ppts 0ppts
Microelectronics - iPhone PA epi-wafer 0% 0% 0% Microelectronics - iPhone PA epi-wafer 0ppts 0ppts 0ppts
Microelectronics -WiFi and others epi-wafer 1% 1% 1% Microelectronics -WiFi and others epi-wafer 0ppts 0ppts 0ppts
Optoelectronics - Silicon Photonics epi-wafer 36% 38% 52% Optoelectronics - Silicon Photonics epi-wafer 0ppts 0ppts 0ppts
Optoelectronics - Data center (ex SiPh) epi-wafer 0% 0% 0% Optoelectronics - Data center (ex SiPh) epi-wafer 0ppts 0ppts 0ppts
Optoelectronics - Non Data center epi-wafer 0% 0% 0% Optoelectronics - Non Data center epi-wafer 0ppts 0ppts 0ppts

Source: Goldman Sachs Global Investment Research

GS vs. Bloomberg consensus: Our 2026-27E revenues are higher than Bloomberg consensus, re fl ecting our positive view on VPEC's optoelectronics business growth. Our 2026-27E GMs are higher than Bloomberg consensus, mainly on product mix upgrade towards optoelectronics. Overall, our 2026-37E net incomes are 27% / 26% higher than Bloomberg consensus.

Exhibit 6: GS vs. Bloomberg consensus

2026E 2026E 2026E 2027E 2027E 2027E
NT$m GS Cons. Diff% GS Cons. Diff%
Revenues 5,009 4,391 14% 7,437 6,177 20%
GP 2,152 1,786 20% 3,502 2,737 28%
OP 1,515 1,196 27% 2,616 2,052 27%
Net income 1,283 1,010 27% 2,144 1,695 26%
Margins
GM 43.0% 40.4% 47.1% 43.3%
OPM 30.2% 27.2% 35.2% 33.2%
NM 25.6% 23.0% 28.8% 27.4%

Source: Goldman Sachs Global Investment Research, Bloomberg

Valuation: We continue to derive target price from 2029E P/E discounted back to 2027E at 10.5% COE (no change), and derive target PE multiple from refreshed peers' trading P/E vs. forward year fundamentals (NI YoY and OPM). Based on our updated 2029-30E NI YoY of 18% (vs. 20% previously) and 2029-30E OPM of 38% (vs. 37% previously), and peers' PEG&M of 0.4x (vs. 0.3x previously), we derive target PE multiple at 22.2x (vs. 18.2x previously), re fl ecting the sector re-rating on new AI server racks ramp up driving optical modules speci fi cation upgrade, and InP substrate supply getting better. Our new e92c7a75ab8b4efbba794e6b187208c8

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12-month target price is at NT$793 (vs. NT$505 previously). Our new TP implies 2027E P/E at 69x (52x previously), within the company's trading range (vs. peak at 74x, and +1stv. at 46x). Maintain Buy.

Exhibit 7: VPEC peers comparison

Ticker Company Rating 2027E P/E 2027-28E NI YoY 2027-28E OPM Ratio
3081.TWO LandMark Buy 89.6 82% 48% 0.7
688498.SS YJ Semi Neutral 215.0 82% 51% 1.6
5802.JT Sumitomo Buy 15.5 21% 10% 0.5
LITE Lumentum NC 30.3 80% 41% 0.2
COHR Coherent NC 24.5 45% 24% 0.4
6503.JT Mitsubishi Buy 14.2 24% 18% 0.3
300502.SZ Eoptolink Buy 16.8 33% 46% 0.2
Avg. (excl. outliers) Avg. (excl. outliers) 35.3 52% 34% 0.4
2029E P/E 2029-30E NI YoY 2029-30E OPM PEG&M
2455.TW VPEC Buy 22.2 18% 38% 0.4

Outliers are in grey. NC companies' estimates are from Bloomberg consensus

Source: Company data, Goldman Sachs Global Investment Research, Bloomberg

Exhibit 8: VPEC discounted PE

(NT$mn) 2022 2023 2024 2025 2026E 2027E 2028E 2029E 2030E
SiPh Rev contribution 1% 6% 29% 47% 60%
SiPh GP contribution 1% 8% 39% 58% 69%
Revenue 2,604 2,694 3,241 3,380 5,009 7,437 10,934 13,285 15,145
YoY -28% 3% 20% 4% 48% 48% 47% 22% 14%
Gross margin 41.8% 41.2% 39.5% 36.1% 43.0% 47.1% 49.4% 49.6% 49.8%
Operating profit 580 542 721 669 1,515 2,616 4,074 4,977 5,704
YoY -45% -7% 33% -7% 126% 73% 56% 22% 15%
Operating margin 22% 20% 22% 20% 30% 35% 37% 37% 38%
Pre-tax profit 667 542 818 667 1,572 2,676 4,136 5,038 5,765
Net profit 545 450 671 548 1,283 2,144 3,313 4,036 4,618
EPS (NT$, diluted) 2.93 2.43 3.62 2.95 6.84 11.43 17.66 43.61 49.91
YoY -36% -17% 49% -18% 134% 67% 55% 22% 14%
TP implied P/E 271 326 219 269 116 69 45 18 16

2029E target P/E

Target multiple x EPS

Discounted back to 2027; TP (NTD)

Implied 2027 P/E

22.2

968

793.0

69.4

COE assumption
Beta 1.7
Risk free 1.6%
Market risk premium 5.1%
COE 10.5%

Source: Company data, Goldman Sachs Global Investment Research, Bloomberg

e92c7a75ab8b4efbba794e6b187208c8

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Exhibit 9: VPEC 12M forward PE ratio

Source: Company data, Goldman Sachs Global Investment Research

Exhibit 10: VPEC P&L summary

NT$ mn 2022 2023 2024 2025 2026E 2027E 2028E 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26E 4Q26E
Income statement
Revenue 2,604 2,694 3,241 3,380 5,009 7,437 10,934 794 714 913 960 959 965 1,386 1,699
Gross profit 1,089 1,109 1,279 1,220 2,152 3,502 5,405 317 246 300 358 365 373 609 805
OP income 580 542 721 669 1,515 2,616 4,074 179 122 159 209 227 224 429 635
Net income 545 450 671 548 1,283 2,144 3,313 157 36 160 194 195 214 354 520
EPS (NT$) 2.93 2.43 3.62 2.95 6.84 11.43 17.66 0.85 0.20 0.86 1.04 1.04 1.14 1.89 2.77
Ratios
R&D to rev 13.8% 15.9% 12.0% 11.3% 8.8% 8.2% 8.7% 12.3% 12.9% 10.3% 10.4% 9.4% 11.1% 9.1% 6.9%
Opex ratio 19.6% 21.0% 17.2% 16.3% 12.7% 11.9% 12.2% 17.3% 17.3% 15.4% 15.5% 14.5% 15.4% 13.0% 10.0%
Tax rate 18.4% 16.9% 17.9% 17.9% 18.4% 19.9% 19.9% 20.0% -48.8% 19.9% 21.2% 19.9% 9.8% 19.9% 19.9%
Margins
Gross margin 41.8% 41.2% 39.5% 36.1% 43.0% 47.1% 49.4% 39.9% 34.4% 32.9% 37.3% 38.1% 38.6% 43.9% 47.4%
Operating margin 22.3% 20.1% 22.3% 19.8% 30.2% 35.2% 37.3% 22.6% 17.1% 17.4% 21.8% 23.6% 23.2% 31.0% 37.4%
Net margin 20.9% 16.7% 20.7% 16.2% 25.6% 28.8% 30.3% 19.8% 5.1% 17.6% 20.2% 20.3% 22.1% 25.5% 30.6%
YoY
Revenue -28% 3% 20% 4% 48% 48% 47% -5% -18% 13% 33% 21% 35% 52% 77%
Gross profit -28% 2% 15% -5% 76% 63% 54% -7% -29% -9% 37% 15% 52% 103% 125%
OP income -45% -7% 33% -7% 126% 73% 56% -10% -41% -18% 71% 27% 83% 170% 204%
Net income -36% -17% 49% -18% 134% 67% 55% -18% -82% 11% 46% 24% 488% 121% 168%
QoQ
Revenue 10% -10% 28% 5% 0% 1% 44% 23%
Gross profit 22% -22% 22% 19% 2% 2% 63% 32%
OP income 47% -32% 30% 31% 8% -1% 92% 48%
Net income 18% -77% 342% 21% 1% 9% 66% 47%

Source: Company data, Goldman Sachs Global Investment Research

e92c7a75ab8b4efbba794e6b187208c8

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Exhibit 11: VPEC balance sheet

NT$ mn 2022 2023 2024 2025 2026E 2027E 2028E
Balance Sheet
Cash and equivalents 753 826 1,176 945 1,339 1,852 3,229
Accounts receivable 292 623 381 519 662 1,050 1,407
Inventory 487 505 619 706 781 1,202 1,555
Other current assets 88 92 108 137 137 137 137
Current assets 1,620 2,045 2,284 2,307 2,919 4,242 6,328
Net PP&E/Fixed assets 2,712 2,490 2,262 2,315 2,862 2,807 2,788
Net intangibles 6 7 8 8 8 8 8
Other long-term assets 74 35 30 47 47 47 47
Non-current assets 2,792 2,532 2,299 2,370 2,916 2,862 2,843
Total assets 4,412 4,578 4,583 4,677 5,835 7,104 9,171
Accounts payable 468 630 621 662 1,029 1,300 1,972
Short-term debt 200 100 - - - - -
Other current liabilities 64 69 125 116 773 1,543 2,588
Current liabilities 732 799 747 778 1,801 2,843 4,560
Long-term debt 590 700 500 600 600 600 600
Other long-term liabilities 7 9 7 4 4 4 4
Non-current liabilities 597 709 507 604 604 604 604
Total liabilities 1,329 1,508 1,254 1,382 2,405 3,447 5,164
Common stock 1,866 1,866 1,866 1,879 1,879 1,879 1,879
Retained earnings 1,217 1,242 1,506 1,462 1,598 1,824 2,175
Other common equity - (38) (42) (46) (46) (46) (46)
Total common equity 3,083 3,069 3,329 3,295 3,430 3,657 4,007
Minority interest - - - - - - -
Total equity 3,083 3,069 3,329 3,295 3,430 3,657 4,007
BVPS 16.57 16.56 17.95 17.72 18.29 19.50 21.37
Cash conversion cycle
Account receivable days 62 62 57 49 43 42 41
Inventory days 109 114 104 112 95 92 91
Net payable days 144 126 116 108 108 108 108
Cash conversion cycle 26 50 45 52 30 26 24
Ratios
ROE (common equity) 17% 15% 21% 17% 38% 60% 86%
ROA 12% 10% 15% 12% 24% 33% 41%
Net debt to total equity 1% -1% -20% -10% -22% -34% -66%
Net cash per share (NTD) (0.20) 0.14 3.66 1.86 4.00 6.77 14.22
Total liabilities to total assets 30% 33% 27% 30% 41% 49% 56%
Dupont analysis
Asset turnover 0.6 0.6 0.7 0.7 1.0 1.1 1.3
Leverage (assets to equity) 1.5 1.5 1.4 1.4 1.6 1.8 2.1
Net margin 21% 17% 21% 16% 26% 29% 30%
ROE (total equity) 17% 15% 21% 17% 38% 60% 86%
ROE (common equity) 17% 15% 21% 17% 38% 60% 86%
ROA 12% 10% 15% 12% 24% 33% 41%
CROCI (EDBITA/total equity) 27% 27% 30% 29% 53% 81% 110%

Source: Company data, Goldman Sachs Global Investment Research

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Exhibit 12: VPEC cash fl ow statement

NT$ mn 2022 2023 2024 2025 2026E 2027E 2028E
Cash flow statement
Net income 545 450 671 548 1,283 2,144 3,313
Minority interest add-back - - - - - - -
Depreciation and amortization add-back 243 284 288 291 313 354 339
(Increase)/decrease in working capital (39) (186) 119 (184) 148 (537) (37)
Other operating cash flow items (106) 24 8 (15) - - -
Cash flow from operating 644 572 1,086 640 1,743 1,961 3,614
Capital expenditure (418) (71) (44) (361) (857) (297) (317)
Other investment cash flow items (52) (0) (3) (3) (3) (3) (3)
Cash flow from investing (470) (71) (47) (364) (859) (300) (320)
Dividends paid (740) (425) (407) (592) (490) (1,147) (1,917)
Change in common stock - - - 13 - - -
Increase/(decrease) in short-term debt (280) (100) (100) - - - -
Increase/(decrease) in long-term debt 390 110 (200) 100 - - -
Other financing cash flow items (2) (3) (4) (17) - - -
Cash flow from financing (632) (419) (711) (496) (490) (1,147) (1,917)
Net change in cash (457) 73 350 (231) 394 513 1,377
FCF 226 501 1,042 278 887 1,663 3,297
Ratio
Capex to revenue 16% 3% 1% 11% 17% 4% 3%

Source: Company data, Goldman Sachs Global Investment Research

VPEC focuses on III-V compound semiconductor EPI wafer for microelectronics and optoelectronics devices based on InP and GaA substrate, and expands to EPI wafer for SiPh transceivers CW laser for data center applications. We expect strong momentum in VPEC growth driven by the SiPh ramp up in 2026E, microelectronics clients' increasing demand, and its accumulated technology advantages on EPI wafer. We note that VPEC is currently trading lower than our TP implied 69x 2027E forward P/E, which is attractive, in our view.

Price Target Risks and Methodology - VPEC

Valuation: We adopt a discounted P/E method and apply a 22.2x target P/E on VPEC's 2029E EPS, discounting back to 2027E at a COE of 10.5% (beta 1.7x, risk free rate 1.6% and market risk premium at 5.1%), to derive our 12m TP of NT$793. Our target P/E is based on 0.4x PEG&M ratio derived from the average level of peers in the photonics supply chain.

Key risk: Slower-than-expected SiPh business ramp up; weaker-than-expected microelectronics demand from smartphones clients; IDM o ff ers EPI wafer in-house.

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