報告_MS_金像電2368_20260811

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原始內容

M August 11, 2026 02:54 PM GMT

Gold Circuit Electronics Ltd. | Asia Pacific

2Q26 OP Slight Miss; Stay OW

AlphaSignals Earnings Reaction

Unchanged

Impact to our thesis

Source: Company data, Morgan Stanley Research

Operating profit came in 5% below MSe/3% below the Street, but we think it is better than buyside expectations. With 2Q behind us and the company sounding confident on climbing the HDI learning curve, we view risk-reward as attractive at 13x 2027e/10x 2028e P/E.

See our 2Q26 results recap: 2Q26 Results Recap

We expect strong top-line growth in 3Q, with increased output values (+25% vs. mid-May) from its production sites in Taiwan, Suzhou, Thailand and Changshu 1. The higher output value is a function of more favorable mix, additional capacity and continued pricing adjustments (reflecting higher CCL prices). Thus, we forecast 3Q revenue to grow ~27% q/q to NT$30.7bn, with gross margin expanding ~220bp q/q to 36.9%, resulting in EPS of NT$12.36.

New plants will start contributing from 2H27: GCE's new plants in Suzhou (Suzhou 2) and Thailand (Thailand 2) are both slated for mass production from 2H27 onward. While details have yet to be finalized, we think the monthly output values should reach at least NT$1bn each. In 2H26-1H27, revenue can continue to grow contributed by the new platforms of existing customers and new customer(s) alike. Notably, our checks suggest GCE will start small-volume production for a new CSP customer's new ASIC platform in 4Q26, with mass production slated for 2027.

HDI concerns are overdone: Over the past few weeks, concerns have grown around GCE's advanced HDI capability, with its two main CSP customers shifting from HLC to advanced HDI for next-gen ASIC server PCBs. We believe this is the main reason behind GCE's share price pullback, with the stock down 23% since July 1 (vs. TAIEX 2%). However, the company reaffirmed its confidence in working through the learning curve on HDI, drawing a parallel to its successful development of 800G switch PCBs. With this concern already priced in, risk-reward looks attractive now with the stock trading at just ~13x 2027e P/E and ~10x 2028e P/E. We also see HDI as more likely to coexist with HLC PCB than to displace it for any extended period.

Reiterate OW with lower PT of NT$1,450.00, driven by our lowered EPS assumptions for 2026-28. Our new PT implies ~21x 2027e P/E or ~15x 2028e P/E, which we view as fair driven by its raised capacity expansion plans and strong

In-line

Financial results versus consensus

Modest revision lower

Direction of next 12-month consensus EPS

Idea

Gold Circuit Electronics Ltd. (2368.TW, 2368 TT)

Greater China Technology Hardware | Taiwan

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

• § = Consensus data is provided by Refinitiv Estimates

** = 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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demand for AI servers and networking, with room for margin expansion.

Idea

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Risk Reward - Gold Circuit Electronics Ltd. (2368.TW) Risk Reward - Gold Circuit Electronics Ltd. (2368.TW)

Beneficiary of rising AI server penetration and server/switch PCB upgrade; OW

NT$1,450.00 PRICE TARGET

Base case, residual income model. Key assumptions include a cost of equity of 9.2% (beta of 1.0, equity risk premium of 8.7% and risk-free rate of 1.0%), a medium-term growth rate of 12% and a terminal growth rate of 3%.

NT$1,488.33

NT$1,450.00

21x 2027e P/E

BASE CASE

Server demand remains on growth track in 2026; NB demand shows fl at to mild growth: We forecast a total sales CAGR of ~50%, 2025-28, with server business CAGR reaching 50% and networking business CAGR reaching 64%. We project that operating profit margin will reach ~34% by 2028 vs. ~23% in 2025.

Source: Refinitiv, Morgan Stanley Research

BULL CASE

NT$2,065.00

29.5x 2027e EPS

Much stronger server and switch growth in 2026; NB demand continues to grow y/y; gains more traction for IC testing boards:

Server and switch demand continues to grow y/y in 2026, driven by new data center construction and replacements along with AI infrastructure build-outs. NB demand also shows y/y growth in 2026. In addition, GCE gains more traction for IC testing boards, even penetrating into probe card PCBs faster than expected.

OVERWEIGHT THESIS

• We stay OW because we think GCE is well positioned to benefit from rising demand for AI server PCBs and high-speed networking PCBs.
• We see 800G networking PCB demand increasing in the coming years, which should be a tailwind for gross margin in the longer term.
• Our price target implies ~21x 2027e P/E vs. GCE's three-year historical 6-26x range, which we still find attractive. GCE is benefiting from a favorable mix and should show margin expansion in the coming years.

New Data Era: Secular Growth:

Positive Positive

BEAR CASE

12.5x 2027e EPS

Much weaker server and switch demand in 2026; NB demand deteriorates, and shipments fall y/y in 2026; IC testing board business takes longer than expected to develop: Server and switch demand falls in 2026, hampered by a weakening macro backdrop and hyperscalers cutting capex to preserve cash. NB business faces even weaker demand, at down ~15% y/y in 2026. GCE takes longer to ramp up its IC testing board business.

NT$880.00

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Risk Reward - Gold Circuit Electronics Ltd. (2368.TW)

KEY EARNINGS INPUTS

INVESTMENT DRIVERS

• Server/switch volume growth driven by US hyperscalers and enterprise customers
• Server/switch PCB content growth driven by CCL spec and PCB layer count
• IC testing board project wins
• NB demand

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 server and switch demand
• Stronger-than-expected NB demand
• Higher-than-expected pricing supported by strong product capability and market competitiveness
• Faster-than-expected AI server penetration

RISKS TO DOWNSIDE

• Slower-than-expected server demand
• Weaker-than-expected NB demand
• More severe pricing erosion driven by competition
• Slower-than-expected AI server penetration

OWNERSHIP POSITIONING

Inst. Owners, % Active

56.9%

Source: Refinitiv, Morgan Stanley Research

MS ESTIMATES VS. CONSENSUS

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2Q26 Results Recap

• GCE reported 2Q26 gross margin of 34.7% (-20bp q/q, +510bp y/y), 150bp below both our and the Street forecasts. Management attributed the flattish gross margin, despite more favorable product mix, to rising material costs (mainly CCLs) and higher depreciation costs from expansion.
• Although GCE is able to fully pass through the additional material costs to its customers, there will always be a timing difference (GCE seeing higher input costs vs. reflecting the higher costs in new prices), which might result in margin fluctuation.
• Operating expenses were also higher than expected, primarily due to higher employee bonuses and R&D expenses. Thus, operating profit came in at NT$6.4bn (+24% q/q, +124% y/y), 5% and 3% below our and consensus forecasts, respectively, for operating margin of 26.4%.
• Non-operating losses of NT$118mn were slightly below our and Street estimates of non-operating gains.
• Net profit was NT$4.8bn (+37% q/q, +182% y/y), 5% above our estimate and 6% higher than the Street, for EPS of NT$9.43.
• The differences between net profit variances and EPS variances reflect share count changes.

Exhibit 1: GCE 2Q26 results summary

Source: Company data, Visible Alpha, Morgan Stanley Research estimates.

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Estimate Changes

We lower our 2026-28 EPS estimates 8%, 14% and 13%, respectively, driven by our reduced margin assumptions post the 2Q26 margin miss.

Exhibit 2: Estimate changes

Source: Morgan Stanley Research (E) estimates.

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Price Target Discussion and Valuation Methodology

We lower our price target to NT$1,450.00 from NT$1,660.00: We derive our price target, which is also our base-case scenario value, from a residual income (RI) model, similar to the rest of our tech hardware coverage. The decrease in our price target is driven by our lowered earnings estimates for 2026-28.

Our key assumptions are all unchanged, including a cost of equity of 9.2% (beta of 1.0, equity risk premium of 8.7% and risk-free rate of 1.0%), a medium-term growth rate of 12% and a terminal growth rate of 3%.

Our price target implies ~21x 2027e P/E (0.33x PEG) vs. GCE's three-year historical average +1SD of 18.6x. We view the higher multiple as justified because GCE is showing longer-term margin expansion, driven by a favorable mix shift toward more AI server PCBs and high-speed networking PCBs (400G/800G) alike. Some of its AI component peers are trading at 25x+ 2027e multiple, which leads us to view GCE's valuation as fair.

Our bull- and bear-case scenario values decrease at magnitudes similar to the decline in our base-case value, to NT$2,065.00 and NT$880.00, respectively.

Exhibit 3: Residual income (RI) model

Source: Morgan Stanley Research (E) estimates.

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Exhibit 4: GCE three-year P/E band

Source: TEJ, Morgan Stanley Research.

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Financials

Exhibit 5: Quarterly Earnings Estimates

Source: Company data, Morgan Stanley Research (E) estimates.

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Exhibit 6: Consolidated Financial Summary

Consolidated Income Statement

Consolidated Balance Sheet

Source: Company data, Morgan Stanley Research (E) estimates.

Consolidated Financial Ratios

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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 -ESG_Sustainable_Solutions_External_Link.pdf
5. View explanation of HERS methodology - ESG_HERS_External_Link.pdf

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Stock Price, Price Target and Rating History (See Rating Definitions)

2200

1800

1600

Gold Circuit Electronics Ltd. (2368.TW) - As of 08/11/26 GMT in TWD

Industry : Greater China Technology Hardware

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Stock Rating History: 10/5/22 : 0/I

Stock and Industry Ratings (abbreviations belowd appear as + Stock Rating/Industry View

1550

Stock Ratings: Quernight coo Equal-wight dE) Underweight cuD Not-Rated iNRo No Rating Huailable¿nao

Industry View: Attractine dAD In-line tID Caut ious No Rating Effective January 15, 2014, the stocks covered by Morgan Pacifie will be rated relative to the analust's industry cop industry tear's coverage. Effective January 15, 2014, the industry view benchmarks for Horgan Stanley Asia Pacifie are as follous: relevant MSCI country index or MSCI sub-regional index or MSCI AC Asia Pacific ex Japan

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INDUSTRY COVERAGE: Greater China Technology Hardware

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