報告_MS_正新2105_20260720

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原始內容

M July 20, 2026 10:51 PM GMT

Cheng Shin Rubber | Asia Pacific

Risk Reward Update

What's Changed

Risk Reward for Cheng Shin Rubber (2105.TW) has been updated

Reason for change

We updated latest financials while lowering our 2026-27 earnings forecasts mainly to reflect rising material costs that may weigh on near-term GpM. We now forecast 2Q-4Q26 GpM to be close to 20-21% before crude oil prices normalizing. The assumptions broadly align with previous price hikes back to 2021/22.

That said, disciplined opex management (~15% of revenue) should help sustain operating margins going forward and we keep the same revenue growth assumptions of largely flat.

We continue to use a residual income model to derive our price target and cut our base, bull and bear case valuations by 5-8% to reflect updated 2026-28 forecasts and latest lower beta as a result of limited share price movement. Our new price target of NT$28 implies dividend yield of about 4-5% on a payout ratio of 80-100%.

Morgan Stanley Asia Limited+

Tim Hsiao

Equity Analyst

Tim.Hsiao@morganstanley.com

Update

+852 2848-1982

Cheng Shin Rubber (2105.TW, 2105 TT)

Taiwan Autos & Auto Parts | Taiwan

Stock Rating

Underweight

Industry View

In-Line

Price target

NT$28.00

Shr price, close (Jul 20, 2026)

NT$33.20

52-Week Range

NT$42.75-28.10

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare framework

• ** = Based on consensus methodology
• e = Morgan Stanley Research estimates

Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision.

For analyst certification and other important disclosures, refer to the Disclosure Section, located at the end of this report.

+= Analysts employed by non-U.S. affiliates are not registered with FINRA, may not be associated persons of the member and may not be subject to FINRA restrictions on communications with a subject company, public appearances

• and trading securities held by a research analyst account.

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Risk Reward - Cheng Shin Rubber (2105.TW) Risk Reward - Cheng Shin Rubber (2105.TW)

Intense competition continues to weigh on earnings momentum

NT$28.00 PRICE TARGET

Base case, derived from residual income model. Key assumptions include a 4.9% cost of equity, a 1% medium-term growth rate, and flat growth thereafter.

RISK REWARD CHART

Key:

• Historical Stock Performance

Current Stock Price

Source: Refinitiv, Morgan Stanley Research

BULL CASE

30x 2026e EPS

Stronger-than-expected demand from China and emerging markets, along with higher dividend payout driven by excess free cash flow or potential capacity consolidation.

NT$55.00

Price Target

BASE CASE

20x 2026e EPS

Earnings growth momentum remains muted given revenue pressure from competition while continuous dividend payouts help support the share price.

NT$28.00

UNDERWEIGHT THESIS

• Competitive pressure in China's tire market is likely to persist, and it should take time for this segment to return to a sustainable growth trajectory.
• Non-China growth will likely require time and scale, as additional volume is needed to bridge the revenue gap left by weaker PV and truck tire sales, a high hurdle in the near term.
• The share price implies a 24x 2026e P/E, higher than the 5-year average and with limited fundamental drivers for re-rating.

Risk Reward Themes

View descriptions of Risk Rewards Themes here

BEAR CASE

15x 2026e EPS

Weaker demand in China, the EU, and emerging markets, while raw material costs continue to rise. Potential downside from tariff burdens or anti-dumping actions.

NT$19.00

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Risk Reward - Cheng Shin Rubber (2105.TW)

KEY EARNINGS INPUTS

INVESTMENT DRIVERS

• Growth in emerging markets and broader adoption across additional car models through EU OEM relationships.
• Lower raw material prices.
• Higher dividend payout ratio.

GLOBAL REVENUE EXPOSURE

Source: Morgan Stanley Research Estimate View explanation of regional hierarchies here

MS ALPHA MODELS

2/5 MOST

3 Month Horizon

Source: Refinitiv, FactSet, Morgan Stanley Research; 1 is the highest favored Quintile and 5 is the least favored Quintile

RISKS TO PT/RATING

RISKS TO UPSIDE

• Faster-than-expected increase in demand in China.
• Lower-than-expected raw material prices.
• Stronger-than-expected replacement tire demand globally.
• Favorable CNY/USD rate supporting GpM

RISKS TO DOWNSIDE

• Slower-than-expected increase in demand in China.
• Higher-than-expected raw material prices.
• Weaker-than-expected replacement tire demand globally.

OWNERSHIP POSITIONING

Inst. Owners, % Active

19.3%

Source: Refinitiv, Morgan Stanley Research

MS ESTIMATES VS. CONSENSUS

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Risk Reward Reference links

1. View explanation of Options Probabilities methodology -Options_Probabilities_Exhibit_Link.pdf
2. View descriptions of Risk Rewards Themes - RR_Themes_Exhibit_Link.pdf

3. View explanation of regional hierarchies - GEG_Exhibit_Link.pdf

4. View explanation of Theme/Exposure methodology -

5. ESG_Sustainable_Solutions_External_Link.pdf

6. View explanation of HERS methodology - ESG_HERS_External_Link.pdf

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Disclosure Section

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