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82KB | 真資料圖 | 目標價（PO）沿革圖：股價線＋歷次 PO 標註（28-Nov PO1050 → 12-Mar PO950 → 16-Jun PO1000 → 5-Sep PO1760 → 20-Nov PO2450 → 9-Feb PO3300 → 20-Apr PO6200 → …→ 15-May PO8250），另有多個較早期較低 PO 節點（7-Jan1140、14-Apr780、12-May850 等） |
原始內容
MPI Corporation
Stronger margins & industry position with ongoing tech upgrade; raise PO & reit. Buy
Reiterate Rating: BUY | PO: 8,500 TWD | Price: 6,440 TWD
Expect 60+% GM to be the new norm from 2027
Following a higher base in 2Q26, an expected 0-5%/5-10% revenue QoQ in 3Q/4Q26 is shared by management. As for GM, it is expected to get back to 1Q26 level in 3Q26, and it will improve further a bit in 4Q26. Opex ratio is expected to stay in 25-27% in 2026 per MPI. For 2027, we expect even stronger revenue growth (67%) vs that to be recorded in 2026 (55%), and we project GM to edge up to 61.6% (vs 59.3% in 2026) thanks to a higher mix of MEMS probe card and PCB in-sourcing from 2H27. On capacity plan, MPI targets to expand its capacity of VPC/MEMS pins to 2mn/3.5mn units (unchanged) per month by end of the year, and the capacity of MEMS (micro electromechanical system) pins will reach at least 6mn units/month by end-2027.
No slowdown in technology/roadmap advancement
On technology migration, the firm notes that it sees the pin count increase to over 30k/20k (from 20-30k/below 20k) for AI ASIC/networking chips, and the project that adopts micro bump testing will be based on more than 40k pins on the probe card. For CPO equipment, the Insertion 2 qualification is expected to finalized by end-3Q26/early4Q26, and it will start to ship Insertion 3 engineering-sample machines to several customers from 4Q26 (followed by official order/shipment for production in 1H27).
Stronger initial demand & solidified position; Buy
Given the need of expediting the production ramp amidst a higher complexity of chip probing/package (vs strong chip demand), initial procurement amount of probe card can be 1.2-1.3x (vs previously) by customers nowadays. We deem MPI ' s position further strengthened given its technology advantages, scalability, proven records/reliability, fast turnaround and best-in-class after sales services, and we reiterate Buy. Our PO goes to NT$8,500 (from NT$8,250) still based on 40x 2028E P/E, while we raise 2027/28E EPS by 1%/2% as we assume stronger operating leverage. Details from analyst meeting takeaways can be found on p.3-5 in this report.
| Estimates (Dec) (NT$) | 2024A | 2025A | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|
| Net Income (Adjusted - mn) | 2,301 | 3,177 | 6,232 | 12,330 | 20,762 |
| EPS | 24.42 | 33.49 | 63.61 | 125.84 | 211.90 |
| EPS Change (YoY) | 75.4% | 37.1% | 89.9% | 97.8% | 68.4% |
| Dividend / Share | 16.00 | 20.00 | 39.00 | 76.00 | 128.00 |
| Free Cash Flow / Share | 9.21 | (19.43) | 23.98 | 65.99 | 135.19 |
| Valuation (Dec) | |||||
| P/E | 263.69x | 192.28x | 101.25x | 51.18x | 30.39x |
| Dividend Yield | 0.248% | 0.311% | 0.606% | 1.18% | 1.99% |
| EV / EBITDA* | 207.77x | 138.28x | 77.19x | 40.22x | 24.17x |
| Free Cash Flow Yield* | 0.138% | -0.292% | 0.372% | 1.02% | 2.10% |
| * For full definitions of iQ method SM measures, see page 9. |
This research report provides general information only. No part of this report may be used or reproduced or quoted in any manner whatsoever in Taiwan by the press or other persons without the express written consent of BofA Securities.
>> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analyst under the FINRA rules.
Refer to "Other Important Disclosures" for information on certain BofA Securities entities that take responsibility for the information herein in particular jurisdictions.
BofA Securities does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
Refer to important disclosures on page 10 to 12. Analyst Certification on page 7. Price
14 August 2026
Equity
| Key Changes (NT$) | Previous | Current |
|---|---|---|
| Price Obj. | 8,250.00 | 8,500.00 |
| 2026E EPS | 65.85 | 63.61 |
| 2027E EPS | 124.51 | 125.84 |
| 2028E EPS | 207.29 | 211.90 |
| 2026E EBITDA (m) | 8,072.2 | 8,180.5 |
| 2027E EBITDA (m) | 15,008.8 | 15,698.7 |
| 2028E EBITDA (m) | 24,719.6 | 26,122.7 |
Mike Yang >>
Research Analyst
Merrill Lynch (Taiwan)
+886 2 2376 3729
mike.c.yang@bofa.com
Haas Liu >> Research Analyst Merrill Lynch (Taiwan) +886 2 2376 3727 haas.liu@bofa.com
Cathy Hsu >>
Research Analyst Merrill Lynch (Taiwan) +886 2 2376 3726 cathy.hsu3@bofa.com
Stock Data
| Price | 6,440 TWD |
|---|---|
| Price Objective | 8,500 TWD |
| Date Established | 14-Aug-2026 |
| Investment Opinion | C-1-7 |
| 52-Week Range | 1,120 TWD-7,700TWD |
| Mrkt Val / Shares Out (mn) | 19,620 USD / 98.0 |
| Market Value (mn) | 631,000 TWD |
| Average Daily Value (mn) | 159.35 USD |
| Free Float | 73.7% |
| BofA Ticker / Exchange | XMJCF / TWO |
| Bloomberg / Reuters | 6223 TT / 6223.TWO |
| ROE (2026E) | 39.1% |
| Net Dbt to Eqty (Dec-2025A) | -18.8% |
PCB -printed circuit board
VPC -vertical probe card
CPO -co-packaged optics
AI -artificial intelligence
ASIC -application specific integrated circuit
iQ profile SM MPI Corporation
| Key Income Statement Data (Dec) | 2024A | 2025A | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|
| (NT$ Millions) | |||||
| Sales | 10,172 | 13,371 | 20,716 | 34,514 | 52,022 |
| Gross Profit | 5,561 | 7,428 | 12,284 | 21,272 | 32,680 |
| Sell General &Admin Expense | (1,989) | (2,377) | (3,455) | (4,156) | (3,477) |
| Operating Profit | 2,483 | 3,775 | 7,128 | 14,535 | 24,834 |
| Net Interest &Other Income | 312 | 70 | 497 | 245 | 245 |
| Associates | NA | NA | NA | NA | NA |
| Pretax Income | 2,795 | 3,844 | 7,625 | 14,780 | 25,079 |
| Tax (expense) / Benefit | (490) | (666) | (1,394) | (2,450) | (4,317) |
| Net Income (Adjusted) | 2,301 | 3,177 | 6,232 | 12,330 | 20,762 |
| Average Fully Diluted Shares Outstanding | 94 | 95 | 98 | 98 | 98 |
| Key Cash Flow Statement Data | |||||
| Net Income | 2,306 | 3,180 | 6,231 | 12,330 | 20,762 |
| Depreciation &Amortization | 556 | 792 | 1,053 | 1,164 | 1,288 |
| Change in Working Capital | (1,235) | (1,319) | (1,757) | (4,612) | (5,423) |
| Deferred Taxation Charge | NA | NA | NA | NA | NA |
| Other Adjustments, Net | 470 | (615) | 375 | 0 | 0 |
| Cash Flow from Operations | 2,097 | 2,038 | 5,902 | 8,881 | 16,628 |
| Capital Expenditure | (1,229) | (3,881) | (3,553) | (2,416) | (3,381) |
| (Acquisition) / Disposal of Investments | NA | NA | NA | NA | NA |
| Other Cash Inflow / (Outflow) | (114) | (194) | (3,099) | (3,222) | (3,222) |
| Cash Flow from Investing | (1,343) | (4,075) | (6,652) | (5,638) | (6,604) |
| Shares Issue / (Repurchase) | 0 | 0 | 0 | 0 | 0 |
| Cost of Dividends Paid | 0 | 0 | (1,842) | (3,739) | (7,398) |
| Cash Flow from Financing | 357 | 3,761 | (1,846) | (3,739) | (7,398) |
| Free Cash Flow | 868 | (1,843) | 2,349 | 6,465 | 13,246 |
| Net Debt | (1,547) | (2,742) | (123) | 374 | (2,252) |
| Change in Net Debt | (643) | (1,195) | 2,619 | 496 | (2,626) |
| Key Balance Sheet Data | |||||
| Property, Plant &Equipment | 4,561 | 7,729 | 10,380 | 15,198 | 21,508 |
| Other Non-Current Assets | 2,412 | 2,956 | 3,987 | 4,707 | 5,583 |
| Trade Receivables | 2,050 | 2,411 | 3,783 | 6,106 | 8,804 |
| Cash &Equivalents | 3,710 | 5,445 | 2,864 | 2,368 | 4,993 |
| Other Current Assets | 3,745 | 5,462 | 6,129 | 9,793 | 13,895 |
| Total Assets | 16,479 | 24,003 | 27,142 | 38,171 | 54,784 |
| Long-Term Debt | 1,305 | 1,337 | 1,861 | 1,861 | 1,861 |
| Other Non-Current Liabilities | 193 | 518 | 540 | 540 | 540 |
| Short-Term Debt | 858 | 1,366 | 881 | 881 | 881 |
| Other Current Liabilities | 4,815 | 6,203 | 6,567 | 7,810 | 9,028 |
| Total Liabilities | 7,172 | 9,424 | 9,848 | 11,091 | 12,309 |
| Total Equity | 9,307 | 14,579 | 17,294 | 27,080 | 42,475 |
| Total Equity &Liabilities | 16,479 | 24,003 | 27,142 | 38,171 | 54,784 |
| iQ method SM - Bus Performance* | |||||
| Return On Capital Employed | 19.6% | 21.6% | 30.7% | 48.1% | 54.4% |
| Return On Equity | 27.2% | 26.6% | 39.1% | 55.6% | 59.7% |
| Operating Margin | 24.4% | 28.2% | 34.4% | 42.1% | 47.7% |
| EBITDA Margin | 29.9% | 34.1% | 39.5% | 45.5% | 50.2% |
| iQ method SM - Quality of Earnings* | |||||
| Cash Realization Ratio | 0.9x | 0.6x | 0.9x | 0.7x | 0.8x |
| Asset Replacement Ratio | 2.6x | 5.9x | 4.0x | 2.4x | 3.0x |
| Tax Rate (Reported) | 17.5% | 17.3% | 18.3% | 16.6% | 17.2% |
| Net Debt-to-Equity Ratio | -16.6% | -18.8% | -0.7% | 1.4% | -5.3% |
| Interest Cover | NM | NM | NM | NM | NM |
Key Metrics
- For full definitions of iQ method SM measures, see page 9.
Company Sector
Semiconductor Capital Equipment
Company Description
MPI Corporation is founded in 1995 and went listed in 2003. The company involves in the design and manufacturing of probe card, which is used in wafer testing. On top of probe card, it also provides various kinds of equipment including photonic automation, advanced semiconductor testing and thermal testing. MPI has a leading position in CPC (cantilever) and VPC (vertical) probe card market, while its key global counterparts include Technoprobe and FormFactor.
Investment Rationale
We have a Buy rating on MPI, in view of its structural growth in VPC (including MEMS) business, which in our view is driven by expanding demand from high performance computing and AI (artificial intelligence) as well as ongoing market share gain in such area. We also flag its rising in-sourcing ratio of certain key components for probe card business, which can translate into value-add to customer and in turn lift the firm's margin profile, on top of improving product mix.
Stock Data
Price to Book Value
36.5x
2Q26 recap
- Revenue mix: probe card 74.7%, equipment 23.3%, other 2%
- Rev driven by AI (artificial intelligence) ASIC (application specific integrated circuit) and new customers YTD (year to date)
- Non-op boosted by FX (foreign exchange) gain, and there ' s ~70% revenue based on USD term
- GM (gross margin) affected by ~1ppt QoQ due to mix
- Liability boosted by CB (corporate bond) of ~NT$5bn in 1H26
2H26 outlook
- 2Q26 originally guided 20% QoQ
- 3Q26 revenue QoQ is expected to be 0-5%, and 4Q26 revenue is expected to grow by 5-10% QoQ per management
- GM in 3Q26 back to 1Q26 level, and then a bit better in 4Q26 vs 3Q26
- Opex ratio to stay in 25-27% in 2026
2027 outlook
- Growth magnitude may not be smaller vs 2026 level, driven by ramp up of existing projects and new customers ' projects, including the AI ASICs
- Probe card still the main growth driver
- Higher mix of MEMS probe card and PCB (printed circuit board) in-sourcing to boost GM ahead
- Currently expect a similar range of opex ratio (vs 2026) in 2027
- In the engagement process of local fabless ' ASIC projects, and the next generation order might be confirmed by end-2026
Equipment business
- AST (advanced semiconductor testing) and thermal are used mainly for design stage, with normalized 5-10% revenue YoY
- Expect a bigger growth driven by CPO, and now there ' s no major updates on Insertion 2 qualification, which is expected to finalize by end-3Q26/early-4Q26
- As for Insertion 3, there will be 4-5 internation customers starting to pull-in, including foundry, OSAT (outsourced semiconductor assembly testing) and fabless types of accounts
- Expect production-related order (for Insertion 3) to take place in 1H27 regarding CPO equipment
- CPO equipment -started to work on qualification from 1H25, and it is seeing no delay on mass production schedule, while customers are chasing the supply of engineering-sample machine
MEMS probe card and spec migration
- Main customers including the fabless and ASIC design vendors from US
- Starting to see micro-bump testing when pin count reaches 40k level, which is taking place from end-2026, while there are many projects with 25k+ pin count heading into production in 2026
- Micro-bump testing implies higher technology difficulty, and will underscore MPI ' s strength and industry position as a high-end probe card vendor
- The projects under discussion: networking chips (20-30k), AI ASIC (above 2030k, or 30k on average for 2027), projects with micro bump testing (40k+), and MPI is seeing 50-60k pins per card based on customers ' roadmap
- Micro bump with small pad pitch, so harder for the pin to hit the bump, and it requires hybrid pin technology
- There ' s no direct relationship or barrier, between number of pin count vs the migration of VPC to MEMS probe card, unless the customers wanted to change into micro-bump testing
- One of the key customers uses sacrifice pad along with VPC probe card, which offers cheaper costs (vs technology advantage by micro bump testing)
Paradigm shift in supply chain
- In the past, customers depleted a probe card when all the testing/probing was done, but now customers need to ramp up the output in a shorter period of time
- Therefore, there will be more testing equipment opened for doing the chipprobing, so that hyperscalers can have a quicker iteration of product cycle and generation migration
- Implication for MPI: there will be bigger demand of probe card initially when customers pull-in/procure, during or ahead of the ramp-up stage of manufacturing
- For instance, a tester needs 100 pieces of probe card for the projects in the past, but now it may require 120-130 pieces
- Normally MPI will spread the probe card production cycle to 3-4 quarters, and by definition probe card demand with more than 100 pieces are defined as major projects
Probe card capacity
- VPC (vertical probe card) expected to hit 2mn by end-2026, MEMS (micro electro-mechanical system) to reach 3.5mn by end-2026, and no new updates regarding to 2026 capacity plan
- Will have a more concrete capacity expansion plan by end-2026, and will share by then
Financial plan
- Given already finished CB in 1H26, there could be no further fundraising plan in the next 1-2 years, unless the capacity expansion plan turns out to be more aggressive
Price hike
- CPC (cantilever probe card) 20% to reflect cost inflation on raw material side, while capacity has been fully loaded from late-2025
- VPC/MEMS price hike may just follow the market participants in the industry
Expansion plan
- Bought a piece of land in 1Q26 with 2k pings area, so not a lot of issue on land bank on hand
- Expects no major bottleneck on equipment side, but there has always been an issue regarding talent recruitment
- There ' s long-term agreement signed with raw material suppliers, so manageable impact from the supply constraint if any
- 2027 capex is mainly for pin and CPO (co-packaged optics) equipment capacity expansion, and a bit for land/facility
- Expansion magnitude in 2027 will not be smaller vs 2026 level, regarding MEMS probe card, so it implies at least reaching 6mn (2.5mn units per month incrementally) by end-2027
Exhibit 1: Earnings estimate change
We lift 2026/27/28 operating profit estimates by 1%/5%/6% after baking in the assumptions of stronger operating leverage
| (NT$mn) | BofA 26 (E) | BofA 26 (E) | BofA 26 (E) | BofA 27 (E) | BofA 27 (E) | BofA 27 (E) | BofA 28 (E) | BofA 28 (E) | BofA 28 (E) |
|---|---|---|---|---|---|---|---|---|---|
| New | Old | Diff (%) | New | Old | Diff (%) | New | Old | Diff (%) | |
| Total sales | 20,716 | 20,139 | 2.9 | 34,514 | 33,542 | 2.9 | 52,022 | 51,089 | 1.8 |
| Gross profit | 12,284 | 12,001 | 2.4 | 21,272 | 20,447 | 4.0 | 32,680 | 31,583 | 3.5 |
| Gross margin | 59.3% | 59.6% | -0.3 ppt | 61.6% | 61.0% | 0.7 ppt | 62.8% | 61.8% | 1.0 ppt |
| Operating profit | 7,128 | 7,070 | 0.8 | 14,535 | 13,903 | 4.6 | 24,834 | 23,496 | 5.7 |
| Operating margin | 34.4% | 35.1% | -0.7 ppt | 42.1% | 41.4% | 0.7 ppt | 47.7% | 46.0% | 1.7 ppt |
| Pretax income | 7,625 | 7,512 | 1.5 | 14,780 | 14,156 | 4.4 | 25,079 | 23,749 | 5.6 |
| Pretax margin | 36.8% | 37.3% | -0.5 ppt | 42.8% | 42.2% | 0.6 ppt | 48.2% | 46.5% | 1.7 ppt |
| Net income | 6,232 | 6,246 | -0.2 | 12,330 | 11,809 | 4.4 | 20,762 | 19,661 | 5.6 |
| Net margin | 30.1% | 31.0% | -0.9 ppt | 35.7% | 35.2% | 0.5 ppt | 39.9% | 38.5% | 1.4 ppt |
| EPS (NT$) | 63.61 | 65.85 | -3.4 | 125.84 | 124.51 | 1.1 | 211.90 | 207.29 | 2.2 |
Source: BofA Global Research estimates
BofA GLOBAL RESEARCH
Exhibit 2: BofAe vs consensus
We are slightly behind consensus for 2026/27E operating profit, as we assume a slower revenue gross but stronger gross margin vs street numbers
| (NT$mn) | 2026E | 2026E | 2026E | 2027E | 2027E | 2027E | 2028E | 2028E | 2028E |
|---|---|---|---|---|---|---|---|---|---|
| BofAe | Consensus | Diff (%) | BofAe | Consensus | Diff (%) | BofAe | Consensus | Diff (%) | |
| Total sales | 20,716 | 21,477 | -3.5 | 34,514 | 39,005 | -11.5 | 52,022 | 65,422 | -20.5 |
| Gross profit | 12,284 | 12,135 | 1.2 | 21,272 | 23,559 | -9.7 | 32,680 | 40,823 | -19.9 |
| Gross margin | 59.3% | 56.5% | 2.8 ppt | 61.6% | 60.4% | 1.2 ppt | 62.8% | 62.4% | 0.4 ppt |
| Operating profit | 7,128 | 7,271 | -2.0 | 14,535 | 14,872 | -2.3 | 24,834 | 27,197 | -8.7 |
| Operating margin | 34.4% | 33.9% | 0.6 ppt | 42.1% | 38.1% | 4.0 ppt | 47.7% | 41.6% | 6.2 ppt |
| Pretax income | 7,625 | 7,657 | -0.4 | 14,780 | 15,181 | -2.6 | 25,079 | 28,165 | -11.0 |
| Pretax margin | 36.8% | 35.7% | 1.2 ppt | 42.8% | 38.9% | 3.9 ppt | 48.2% | 43.1% | 5.2 ppt |
| Net income | 6,232 | 6,270 | -0.6 | 12,330 | 12,420 | -0.7 | 20,762 | 22,538 | -7.9 |
| Net margin | 30.1% | 29.2% | 0.9 ppt | 35.7% | 31.8% | 3.9 ppt | 39.9% | 34.5% | 5.5 ppt |
| EPS (NT$) | 63.61 | 63.99 | -0.6 | 125.84 | 126.76 | -0.7 | 211.90 | 230.02 | -7.9 |
Source: BofA Global Research estimates, Bloomberg
Exhibit 3: Income statement
We expect the company to record 55-60% revenue CAGR during 2026-28, along with 60+% gross margin over the same period
| NT$mn;% | 1Q26 | 2Q26 | 3Q26E | 4Q26E | 1Q27E | 2Q27E | 3Q27E | 4Q27E | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 3,933 | 5,253 | 5,497 | 6,034 | 6,797 | 7,818 | 9,148 | 10,750 | 13,371 | 20,716 | 34,514 | 52,022 |
| Cost of Revenue | (1,595) | (2,198) | (2,226) | (2,413) | (2,685) | (3,049) | (3,476) | (4,031) | (5,943) | (8,433) | (13,242) | (19,342) |
| Gross profit | 2,338 | 3,055 | 3,271 | 3,620 | 4,112 | 4,769 | 5,672 | 6,719 | 7,428 | 12,284 | 21,272 | 32,680 |
| Operating exp | (1,065) | (1,253) | (1,374) | (1,463) | (1,529) | (1,642) | (1,738) | (1,828) | (3,653) | (5,156) | (6,737) | (7,846) |
| Operating income | 1,273 | 1,802 | 1,896 | 2,157 | 2,583 | 3,127 | 3,934 | 4,891 | 3,775 | 7,128 | 14,535 | 24,834 |
| Non-opt net | 252 | 104 | 70 | 70 | 61 | 61 | 61 | 61 | 70 | 497 | 245 | 245 |
| Income before tax | 1,525 | 1,906 | 1,967 | 2,227 | 2,644 | 3,188 | 3,995 | 4,953 | 3,844 | 7,625 | 14,780 | 25,079 |
| Income Tax | (298) | (382) | (334) | (379) | (436) | (542) | (679) | (792) | (666) | (1,394) | (2,450) | (4,317) |
| Net income | 1,227 | 1,524 | 1,632 | 1,849 | 2,208 | 2,646 | 3,316 | 4,160 | 3,179 | 6,231 | 12,330 | 20,762 |
| EPS (NT$) | 12.5 | 15.6 | 16.7 | 18.9 | 22.5 | 27.0 | 33.8 | 42.5 | 33.6 | 63.6 | 125.8 | 211.9 |
| Margin; tax rate | ||||||||||||
| Gross margin | 59% | 58% | 60% | 60% | 61% | 61% | 62% | 63% | 56% | 59% | 62% | 63% |
| Operating expenses | 27% | 24% | 25% | 24% | 23% | 21% | 19% | 17% | 27% | 25% | 20% | 15% |
| Operating margin | 32% | 34% | 35% | 36% | 38% | 40% | 43% | 46% | 28% | 34% | 42% | 48% |
| Pretax margin | 39% | 36% | 36% | 37% | 39% | 41% | 44% | 46% | 29% | 37% | 43% | 48% |
| Net margin | 31% | 29% | 30% | 31% | 32% | 34% | 36% | 39% | 24% | 30% | 36% | 40% |
| Tax rate | 20% | 20% | 17% | 17% | 17% | 17% | 17% | 16% | 17% | 18% | 17% | 17% |
| Sequential growth% | ||||||||||||
| Revenue | 3% | 34% | 5% | 10% | 13% | 15% | 17% | 18% | 31% | 55% | 67% | 51% |
| Gross profit | 13% | 31% | 7% | 11% | 14% | 16% | 19% | 18% | 34% | 65% | 73% | 54% |
| Operating exp | -3% | 18% | 10% | 6% | 5% | 7% | 6% | 5% | 19% | 41% | 31% | 16% |
| Operating income | 33% | 42% | 5% | 14% | 20% | 21% | 26% | 24% | 52% | 89% | 104% | 71% |
| Net income | 30% | 24% | 7% | 13% | 19% | 20% | 25% | 25% | 38% | 96% | 98% | 68% |
Source: BofA Global Research estimates, company data
BofA GLOBAL RESEARCH
BofA GLOBAL RESEARCH
Price objective basis & risk
MPI Corporation (XMJCF)
Our PO NT$8,500 is based on 40x 2028E P/E, which is at the peak of the company's historical trading range (10x-40x). In our view, the valuation multiple is underpinned by 1) 83% earnings CAGR in 2026-28E (vs 65% during 2024-26E), 2) operating margin of 45% in 2027-28E (vs 31% in 2025-26E), 3) ROE of 58% in 2027-28E (vs 33% in 202526E), and 4) free cash flow generation of NT$201/share in 2027-28E.
Downside risks to our PO are:
- 1) slower end market demand, which may undermine the company's revenue growth and operating leverage
- 2) customers' switch from VPC probe card to MEMS solution, where MPI has a less dominant position
- 3) keener competition especially from its foreign competitors, which may dampen the margin profile
- 4) failure to execute or delay of in-sourcing strategy on PCB, which may limit the firm's delivery/supply to customers.