PDF 原檔：報告_JPM_貿聯3665_20260902_original.pdf
原始內容
J.P. Morgan
BizLink
Read-through from Credo FY1Q27 results
Credo (CRDO US, OW, covered by Joseph Cardoso), which is BizLink's active electrical cable (AEC) contract manufacturing customer, reported its FY1Q27 results. Key takeaways include:
- FY1Q27 results and FY2Q27 guidance. Credo reported FY1Q27 revenue of US$479mn (+115% YoY, +10% QoQ) and delivered a 68% non-GAAP gross margin. Non-GAAP net income rose to US$236.3mn (+140% YoY, +4% QoQ), coming in above consensus. The top four customers each contributed ≥10% of revenue, with the largest at 33%, followed by 28%, 13% and 10%. Looking into FY2Q27, Credo guided to revenue of US$525-535mn (midpoint +11% QoQ), with non-GAAP gross margin of 67-69%. Full-year FY27 revenue is expected to grow over 85% YoY, driven by more than US$600mn in optical revenue, according to the company.
- AEC demand remains healthy with 1.6T extending the growth runway. Credo's AEC business continued to grow, with management highlighting ongoing penetration gains at hyperscalers and neocloud customers. Management also noted 1.6T AEC to begin contributing in FY2H27 and ramp up more meaningfully in FY28, with its solutions extending up to 6.5 meters. Under the strong growth ahead for the optical transceiver pluggable market (i.e. 60mn units in 2026 to 175mn by 2030), the company expects to capture the broader market expansion across not only the optical portfolio but also AECs and other copper solutions.
- Optical is ramping rapidly, while ALC broadens growth opportunities. Credo sees decent growth in its optical business, with management reiterating optical DSPs, silicon photonics PICs and ZeroFlap optics to each contribute over US$100mn in FY27 revenue. In addition, record retimer revenue and increasing engagement in ALC and OmniConnect further reinforce its comprehensive connectivity solutions. The company plans to demonstrate the ALC solution at the Open Compute Project (OCP) Global Summit in October, and it also remains on-target for an initial revenue in FY28.
- Implications for BizLink. Overall, the read-through from Credo's commentary remains positive for BizLink. While Credo's AEC growth is likely to lag optical in the near term, reflecting the faster ramp of optical from a smaller base, management still expects copper and optical solutions to maintain a more balanced mix over the longer term. This suggests that BizLink's AEC demand should continue to benefit from rising penetration and higher bandwidth requirements as next-generation AI clusters scale. We therefore view BizLink's AEC headwinds in 1H26 as more temporary than structural, with its ongoing engagement in ALC solutions providing an additional growth engine in the long run.
Overweight
3665.TW, 3665 TT Price (01 Sep 26):NT$2,315.00
Price Target (Jun-27):NT$3,100.00
Taiwan Industrial
Amanda Chang AC
(886-2) 2725-9861 amanda.chang@jpmorgan.com J.P. Morgan Securities (Taiwan) Limited
Karen Li, CFA
(852) 2800-8589
karen.yy.li@jpmorgan.com
J.P. Morgan Securities (Asia Pacific) Limited/ J.P. Morgan Broking (Hong Kong) Limited
Investment Thesis, Valuation and Risks
BizLink (Overweight; Price Target: NT$3,100.00)
Investment Thesis
We rate BizLink OW considering: 1) rising power demand and content value as AI platforms transition to VR200 and VR Ultra; 2) additional growth opportunities from the ramp-up of optical interconnect solutions and solid capital equipment business; and 3) strengthened competitive positioning through close design-in collaboration with NVIDIA and hyperscalers.
Valuation
Our Jun-27 PT of NT$3,100 is based on 23x of 12M forward EPS. The 23x valuation multiple is at the higher end of the 10-year trading range, on the back of a solid growth outlook thanks to rising exposure to high growth and margin-lucrative HPC and capital equipment business.
Risks to Rating and Price Target
Key downside risks to our rating and price target include: 1) market-share loss amid intensifying competition; 2) moderating AEC growth at higher data transmission speeds; 3) gross margin pressure during platform and product transitions; and 4) weaker-thanexpected AI server demand and order growth.
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