報告_MS_川湖2059_20260807

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M August 7, 2026 03:14 PM GMT

King Slide Works Co. Ltd. | Asia Pacific

Rome Wasn't Built in a Day; Lift Price Target to NT$15,000

Management indicates that its industry position and GM profile have been achieved gradually and should be sustained. We raise our 2027 EPS estimate 53% and continue to apply a target P/E of 30x, implying a PEG of 0.4. Stay OW.

Is the revenue growth momentum sustainable? Yes: King Slide posted solid monthly sales of NT$6,407mn (+44% MoM/+356% YoY) in July. To put this into perspective, this monthly run rate was 3.3x vs. that in March 2026 (NT$1,918mn, +9% MoM/+39% YoY). Though management did not provide numerical guidance on the call, it indicates that it is seeing broad-based strong customer demand with good order visibility across a wide range of applications in both data center and enterprise environments. Because of its comprehensive patent portfolio and solid execution, King Slide should remain the go-to supplier in most relevant projects. Therefore, we now expect revenue to step up further in 3Q26, to NT$19,555mn (+81% QoQ/+348% YoY).

What's the margin outlook? Confident: The 87.4% GM (+9.7ppt QoQ) for 2Q26 was remarkable. Management cited a more favorable product mix - it shipped plenty of new products, which usually carry higher margins thanks to more complicated design. Management believes that rail kit technology will continue to advance - and King Slide is able to better address those needs through accumulated knowledge to efficiently move design concepts into manufacturable products. Furthermore, the product life cycle has shortened to 6-12 months from 12-24 months in the past, which will pose more challenges for the supply chain - but at the same time, position leading players like King Slide well to offer more value. As a result, management sounds confident about its margin outlook in coming years.

Does King Slide have enough capacity? It's coming: This is another natural question for a company showing such robust growth in a short period. Management indicated that it has been squeezing more output from its existing facilities through equipment/automation upgrades and more work shifts; utilization is 70-80% now. Aside from existing plants, it will have US capacity coming online this September/ October and a new factory in Kaohsiung in 2H27. Last, it might kick off another project in late 2026 in Kaohsiung next to its existing one that could accommodate a greenfield factory - potentially tripling its existing capacity when fully operational.

Stay OW : We maintain the view that King Slide's competitiveness is well entrenched and accentuated amid quick generation migration. The stock has rallied very strongly, yet we believe the earnings outlook can sustain valuation.

King Slide Works Co. Ltd. (2059.TW, 2059 TT)

Greater China Technology Hardware | Taiwan

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