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157KB | 真資料圖 | 左圖 Figure 4「12M Forward P/E Band」股價與 3.1x/6.6x/10.1x/13.6x/17.1x 倍數線（Jan-12 至 Jan-26）；右圖 Figure 5「12M Forward P/B Band」股價與 0.9x/1.1x/1.4x/1.7x/1.9x 倍數線疊加 ROE（右軸） |
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110KB | 真資料圖 | Bull/Base/Bear 目標價情境圖：Bull NT$380（+63%）、Base NT$365（+56%）、Bear NT$150（-36%），股價走勢圖至 2026-08-06 收盤 NT$233.50 |
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185KB | 真資料圖 | Citi Ratings and Target Price History 與 Short-Term View/Catalyst Watch 附錄圖表：2024-10 至 2026-05 評等/目標價變動紀錄（含日期、TP、收盤價） |
原始內容
(RIC: 3036.IW, BB: 3036 11)
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06 Aug 2026 10:21:28 ET │ 14 pages
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WT Micro (3036.TW)
AI demand should be stronger in 2H26; Buy
CITI'S TAKE
Overall WT Micro is benefiting from the semi upcycle, especially from datacenter segment on ASIC demand and recovery in auto/industrial segments of its subsidiary, Future Electronics. Though 3Q26E sales is guided to be muted QoQ due to temporary slowdown in datacenter segment, the chairman is confident on datacenter momentum resumption from 4Q26 onward. Also, Future Electronics' GM profile likely sees some upside during upcycle, in our view. We raise our DCF-based TP to NT$365 (implied 11x 2027E EPS). We think the PE multiple is not stretched given its AI trend and upside from Future Electronics. Reiterate our Buy rating.
2Q26 GM in line -2Q26 sales grew 20% QoQ, driven by auto/industrial (up 2025% QoQ), datacenter (up 24% QoQ) and consumer (up 28% QoQ). Communication (up 14% QoQ), PC (up 6% QoQ) and smartphone (down 6% QoQ) demand underperformed. 2Q26 GM/OPM came in line with Citi/consensus forecasts. Overall, earnings came 14%/18% than Citi/consensus forecasts.
3Q26 high season but datacenter slowdown temporarily -For 3Q26 outlook, the company sees QoQ growth in industrial, communication and smartphone segments. For datacenter demand, shipments would decrease QoQ in 3Q26, reflecting the shipment cadence of its ASIC customer. Thus, the company currently guided overall 3Q26 sales (at the midpoint) to be flat QoQ. However, the chairman expects overall 2H26 datacenter demand would be stronger than 1H, which implied datacenter demand would recover meaningful QoQ in 4Q26. Meanwhile, despite the market' concerns over the sustainability of its datacenter segment, the chairman is positive on its 2027 growth. Thanks to favorable product mix, 2Q26 GM/OPM are guided to improvement QoQ in 3Q26.
Likely some upsides from Future Electronics -Overall, auto/industrial segment is recovering better than expected in 1H26, driving the group GM profile. Meanwhile, given rising demand and tight supply for passive components, power ICs and other analog ICs, we think Future Electronics would likely benefit more from the price hike vs WT Micro standalone, as Future focuses more on mass market, facing small/medium customers. Future Electronics' GM seemingly is quite stable in the 16-17% range from 2Q24 on till now. To note that, last upcycle during Covid, Future's GM once reached 20%ish levels.
Earnings Summary
| Year to 31Dec | Net Profit (NT$M) | DilutedEPS (NT$) | EPSgrowth (%) | P/E (x) | P/B (x) | ROE (%) | Yield (%) |
|---|---|---|---|---|---|---|---|
| 2024A | 8,842 | 8.06 | 92 | 29 | 2.6 | 10.3 | 0.8 |
| 2025A | 13,274 | 11.77 | 46.1 | 19.8 | 2.3 | 12.2 | 2.1 |
| 2026E | 36,508 | 28.3 | 140.4 | 8.3 | 2.1 | 28.2 | 3.4 |
| 2027E | 43,303 | 34.02 | 20.2 | 6.9 | 1.6 | 26.4 | 9.2 |
| 2028E | 62,453 | 49.09 | 44.3 | 4.8 | 1.2 | 28.8 | 11 |
Source: Powered by dataCentral
See Appendix A-1 for Analyst Certification, Important Disclosures and Research Analyst Affiliations.
n Buy
Price (06 Aug 26 13:30)
NT$233.50
Target price
NT$365.00↑
from NT$350.00
Expected share price return
56.3%
Expected dividend yield
9.3%
Expected total return
65.6%
Market Cap
NT$296,346M US$9,181M
Price Performance (RIC: 3036.TW, BB: 3036 TT)
Jack Chen AC
+886-2-8726-9091 jack1.chen@citi.com
Laura (Chia Yi) Chen +886-2-8726-9090 laura.cy.chen@citi.com
Nicholas Lai +886-2-8726-9093 nicholas.lai@citi.com
| 3036.TW:Fiscalyearend31-Dec | Price: NT$233.50; TP:NT$365.00; MarketCap:NT$296,346m; Recomm:Buy | Price: NT$233.50; TP:NT$365.00; MarketCap:NT$296,346m; Recomm:Buy | Price: NT$233.50; TP:NT$365.00; MarketCap:NT$296,346m; Recomm:Buy | Price: NT$233.50; TP:NT$365.00; MarketCap:NT$296,346m; Recomm:Buy | Price: NT$233.50; TP:NT$365.00; MarketCap:NT$296,346m; Recomm:Buy | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Profit&Loss(NT$m) | 2024 | 2025 | 2026E | 2027E | 2028E | Valuation ratios | 2024 | 2025 | 2026E | 2027E | 2028E |
| Sales revenue | 959,432 | 1,177,949 | 2,319,543 | 3,402,972 | 4,633,878 | PE(x) | 29.0 | 19.8 | 8.3 | 6.9 | 4.8 |
| Cost of sales | -921,830 | -1,130,325 | -2,239,397 | -3,299,730 | -4,498,726 | PB(x) | 2.6 | 2.3 | 2.1 | 1.6 | 1.2 |
| Gross profit | 37,602 | 47,624 | 80,145 | 103,242 | 135,153 | EV/EBITDA(x) | 19.0 | 14.8 | 6.3 | 5.3 | 3.8 |
| Gross Margin (%) | 3.9 | 4.0 | 3.5 | 3.0 | 2.9 | FCFyield (%) | 16.5 | 6.1 | -2.2 | 8.6 | 4.6 |
| EBITDA(Adj) | 16,671 | 22,637 | 53,242 | 64,300 | 88,139 | Dividend yield (%) | 0.8 | 2.1 | 3.4 | 9.2 | 11.0 |
| EBITDAMargin(Adj) (%) | 1.7 | 1.9 | 2.3 | 1.9 | 1.9 | Payout ratio (%) | 23 | 42 | 28 | 63 | 52 |
| Depreciation | -1,048 | -1,180 | -1,265 | -1,311 | -824 | ROE(%) | 10.3 | 12.2 | 28.2 | 26.4 | 28.8 |
| Amortisation | -359 | -575 | -430 | -430 | -430 | Cashflow(NT$m) | 2024 | 2025 | 2026E | 2027E | 2028E |
| EBIT (Adj) | 15,264 | 20,882 | 51,547 | 62,559 | 86,885 | EBITDA | 16,671 | 22,637 | 53,242 | 64,300 | 88,139 |
| EBIT Margin (Adj) (%) | 1.6 | 1.8 | 2.2 | 1.8 | 1.9 | Working capital | 32,003 | 2,331 | -44,894 | -19,532 | -50,143 |
| Net interest | -4,251 | -4,280 | -5,815 | -6,360 | -6,360 | Other | -6,246 | -7,361 | -14,741 | -18,996 | -24,172 |
| Associates | 642 | -396 | 253 | -100 | -100 | Operating cashflow | 42,428 | 17,606 | -6,394 | 25,772 | 13,825 |
| Non-Op/Except/Other Adj | 179 | 1,192 | 580 | -230 | -230 | Capex | -249 | -1,668 | -266 | -240 | -240 |
| Pre-tax profit | 11,835 | 17,399 | 46,564 | 55,870 | 80,195 | Net acq/disposals | 6,596 | -3,948 | 1,729 | 0 | 0 |
| Tax | -2,629 | -3,833 | -9,782 | -12,286 | -17,462 | Other | -115,233 | 3,855 | -10,489 | -10,489 | -10,489 |
| Extraord./Min.Int./Pref.div. | -364 | -293 | -274 | -280 | -280 | Investing cashflow | -108,886 | -1,761 | -9,027 | -10,729 | -10,729 |
| Reported net profit | 8,842 | 13,274 | 36,508 | 43,303 | 62,453 | Dividends paid | -2,548 | -7,267 | -10,241 | -27,651 | -32,748 |
| Net Margin (%) | 0.9 | 1.1 | 1.6 | 1.3 | 1.3 | Financing cashflow | 82,030 | -26,818 | 13,332 | -270 | -270 |
| CoreNPAT | 8,842 | 13,274 | 36,508 | 43,303 | 62,453 | Net change in cash | 16,980 | -11,589 | -2,089 | 14,773 | 2,825 |
| Per share data | 2024 | 2025 | 2026E | 2027E | 2028E | Free cashflow to s/holders | 42,179 | 15,938 | -6,660 | 25,532 | 13,585 |
| Reported EPS($) | 8.06 | 11.77 | 28.30 | 34.02 | 49.09 | ||||||
| Core EPS($) | 8.06 | 11.77 | 28.30 | 34.02 | 49.09 | ||||||
| DPS($) | 1.82 | 5.00 | 7.84 | 21.57 | 25.59 | ||||||
| CFPS($) | 38.68 | 15.61 | -4.96 | 20.25 | 10.87 | ||||||
| FCFPS($) | 38.45 | 14.14 | -5.16 | 20.06 | 10.68 | ||||||
| BVPS($) | 90.33 | 103.08 | 111.95 | 145.97 | 195.04 | ||||||
| Wtdavgordshares(m) | 1,080 | 1,126 | 1,265 | 1,266 | 1,265 | ||||||
| Wtdavgdiluted shares (m) | 1,097 | 1,128 | 1,290 | 1,273 | 1,272 | ||||||
| Growthrates | 2024 | 2025 | 2026E | 2027E | 2028E | ||||||
| Sales revenue (%) | 61.4 | 22.8 | 96.9 | 46.7 | 36.2 | ||||||
| EBIT (Adj) (%) | 86.2 | 36.8 | 146.8 | 21.4 | 38.9 | ||||||
| CoreNPAT(%) | 136.3 | 50.1 | 175.0 | 18.6 | 44.2 | ||||||
| CoreEPS(%) | 92.0 | 46.1 | 140.4 | 20.2 | 44.3 | ||||||
| BalanceSheet(NT$m) | 2024 | 2025 | 2026E | 2027E | 2028E | ||||||
| Cash&cashequiv. | 39,728 | 28,139 | 25,463 | 40,468 | 43,373 | ||||||
| Accounts receivables | 142,094 | 170,018 | 118,762 | 162,708 | 292,354 | ||||||
| Inventory | 160,928 | 259,760 | 368,144 | 668,535 | 936,343 | ||||||
| Net fixed &other tangibles | 5,315 | 7,219 | 4,014 | 2,791 | 2,206 | ||||||
| Goodwill &intangibles assets | 43,103 | 40,606 | 40,935 | 40,935 | 40,935 | ||||||
| Financial &other | 21,323 | 21,817 | 32,539 | 51,399 | 83,687 | ||||||
| Total assets Accounts | 412,490 186,741 | 527,560 | 589,857 | 966,835 | 1,398,897 | ||||||
| payable | 317,278 | 310,932 | 610,728 | 946,583 | |||||||
| Short-term debt | 35,486 63,366 | 33,601 | 58,818 | 58,818 | 58,818 34,218 | ||||||
| Long-term debt | 34,383 | 34,218 | 34,218 | ||||||||
| Total liabilities | 308,627 | 409,622 | 447,081 | 780,746 | 1,150,344 | ||||||
| Minority interests | 988 | 275 | 291 | 301 | 311 | ||||||
| Total equity | 103,863 | 117,938 | 142,776 | 186,090 | 248,553 | ||||||
| 59,125 | 39,846 | 67,573 | 52,568 | 49,663 | |||||||
| Net debt (Adj) | |||||||||||
| Net debt to equity (Adj) (%) | 56.9 | 33.8 | 47.3 | 28.2 | 20.0 | ||||||
| For definitions of the items in this table, | please click here. |
Figure 2. WT Micro - Earnings Revisions
| 3Q26E | 3Q26E | 3Q26E | 4Q26E | 4Q26E | 4Q26E | 2026E | 2026E | 2026E | 2027E | 2027E | 2027E | 2028E | 2028E | 2028E | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (NT$mn) | New | Old | Chg. | New | Old | Chg. | New | Old | Chg. | New | Old | Chg. | New | Old | Chg. |
| Sales | 601,326 | 630,892 | -5% | 633,250 | 647,056 | -2% | 2,319,543 | 2,362,077 | -2% | 3,402,972 | 3,539,175 | -4% | 4,633,878 | 4,788,919 | -3% |
| Sequential growth (%) | 2% | 7% | 5% | 3% | 97% | 101% | 47% | 50% | 36% | 35% | |||||
| Gross profit | 21,365 | 20,070 | 6% | 21,594 | 19,761 | 9% | 80,145 | 76,151 | 5% | 103,242 | 99,231 | 4% | 135,153 | 126,782 | 7% |
| Opex | 6,992 | 7,628 | -8% | 7,357 | 7,820 | -6% | 28,599 | 29,687 | -4% | 40,683 | 42,185 | -4% | -48,268 | -49,743 | -3% |
| Operating profit | 14,373 | 12,443 | 16% | 14,236 | 11,941 | 19% | 51,547 | 46,464 | 11% | 62,559 | 57,046 | 10% | 86,885 | 77,039 | 13% |
| Pre-tax profit | 12,726 | 11,648 | 9% | 12,589 | 11,146 | 13% | 46,564 | 43,057 | 8% | 55,870 | 53,766 | 4% | 80,195 | 73,759 | 9% |
| Net income | 10,073 | 9,222 | 9% | 9,998 | 8,851 | 13% | 36,508 | 33,345 | 9% | 43,303 | 41,669 | 4% | 62,453 | 57,411 | 9% |
| EPS(NT$) | 7.91 | 7.25 | 9% | 7.86 | 6.95 | 13% | 28.30 | 26.21 | 8% | 34.02 | 32.74 | 4% | 49.09 | 45.13 | 9% |
| Gross margin (%) | 3.55% | 3.18% | +0.4 ppt | 3.41% | 3.05% | +0.4 ppt | 3.46% | 3.22% | +0.2 ppt | 3.03% | 2.80% | +0.2 ppt | 2.92% | 2.65% | +0.3 ppt |
| Opexratio (%) | 1.16% | 1.21% | -0.0 ppt | 1.16% | 1.21% | -0.0 ppt | 1.23% | 1.26% | -0.0 ppt | 1.20% | 1.19% | +0.0ppt | -1.04% | -1.04% | -0.0 ppt |
| Operating margin (%) | 2.39% | 1.97% | +0.4 ppt | 2.25% | 1.85% | +0.4 ppt | 2.22% | 1.97% | +0.3 ppt | 1.84% | 1.61% | +0.2 ppt | 1.87% | 1.61% | +0.3 ppt |
| Net margin (%) | 1.68% | 1.46% | +0.2 ppt | 1.58% | 1.37% | +0.2 ppt | 1.57% | 1.41% | +0.2 ppt | 1.27% | 1.18% | +0.1 ppt | 1.35% | 1.20% | +0.1 ppt |
© 2026 Citigroup Inc. No redistribution without Citigroup's written permission.
Source: Citi Research Estimates
Earnings upward revisions; lift TP NT$365 on attractive valuation; Buy -We lift our 2026/27/28E earnings by 9%/4%/9% to factor in more AI ASIC ramp from 4Q26 onward and auto/industrial recovery. We raise our DCF-based TP to NT$365 (implied 11x 2027E EPS) from NT$350 (implied 10x 2027E EPS). We believe 11x multiple isn't stretched and justified by semiconductor upcycle. Reiterate our Buy rating.
Figure 1. WT Micro - 2Q26 Results
| (NT$mn) | 2Q26 Actual | 1Q26 Actual | Q/Q | 2Q25 Actual | Y/Y | 2Q26 Citi | Diff. | 2Q26 Cons. | Diff. |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 590,694 | 494,273 | 20% | 259,503 | 128% | 589,855 | 0% | 580,201 | 2% |
| Gross profit | 20,142 | 17,044 | 18% | 11,217 | 80% | 19,275 | 4% | 19,025 | 6% |
| Gross margin | 3.4% | 3.4% | -0.0 ppt | 4.3% | -0.9 ppt | 3.3% | +0.1 ppt | 3.3% | +0.1 ppt |
| Op. profit | 12,994 | 9,944 | 31% | 4,660 | 179% | 12,136 | 7% | 11,817 | 10% |
| OPmargin | 2.2% | 2.0% | +0.2 ppt | 1.8% | +0.4 ppt | 2.1% | +0.1 ppt | 2.0% | +0.2 ppt |
| Net income | 9,713 | 6,723 | 44% | 2,560 | 279% | 8,533 | 14% | 8,251 | 18% |
| EPS(NT$) | 7.63 | 5.01 | 52% | 2.27 | 236% | 6.70 | 14% | 6.46 | 18% |
© 2026 Citigroup Inc. No redistribution without Citigroup's written permission.
Source: Citi Research Estimates, Company Reports, Bloomberg
Figure 3. WT Micro - Forecast Summary
| WT Micro (NT$ in Mn, year-end Dec) | 2027 | 2027 | 2027 | 2027 | 2019 | 2020 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| WT Micro (NT$ in Mn, year-end Dec) | 1Q | 2QE 2026 | 3QE | 4QE | 1QE | 2QE | 3QE | 4QE | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
| Revenue | 494,273 | 590,694 | 601,326 | 633,250 | 539,461 | 761,555 | 1,040,400 | 1,061,557 | 335,187 | 353,152 | 447,896 | 571,197 | 594,519 | 959,432 | 1,177,949 | 2,319,543 | 3,402,972 | 4,633,878 |
| COGS | -477,229 | -570,551 | -579,961 | -611,656 | -520,582 | -737,836 | -1,010,382 | -1,030,930 | -324,387 | -342,378 | -430,909 | -551,365 | -576,113 | -921,830 | -1,130,325 | -2,239,397 | -3,299,730 | -4,498,726 |
| Depreciation costs | -293 | -321 | -324 | -327 | -326 | -327 | -328 | -330 | -288 | -297 | -348 | -380 | -448 | -1,048 | -1,180 | -1,265 | -1,311 | -824 |
| Gross Profit | 17,044 | 20,142 | 21,365 | 21,594 | 18,879 | 23,719 | 30,018 | 30,626 | 10,800 | 10,774 | 16,987 | 19,832 | 18,406 | 37,602 | 47,624 | 80,145 | 103,242 | 135,153 |
| Operating Expense | -7,100 | -7,149 | -6,992 | -7,357 | -6,896 | -9,494 | -11,919 | -12,374 | -5,547 | -5,458 | -6,430 | -8,050 | -10,206 | -22,338 | -26,742 | -28,599 | -40,683 | -48,268 |
| SG&A expenses | -6,707 | -6,776 | -6,615 | -6,966 | -6,635 | -9,139 | -11,444 | -11,889 | -5,138 | -5,048 | -5,818 | -7,394 | -9,443 | -21,389 | -25,291 | -27,063 | -39,108 | -46,161 |
| R&Dexpenses | -212 | -253 | -258 | -271 | -231 | -327 | -446 | -455 | -407 | -386 | -609 | -655 | -755 | -851 | -810 | -994 | -1,459 | -1,987 |
| EBIT | 9,944 | 12,994 | 14,373 | 14,236 | 11,984 | 14,225 | 18,098 | 18,253 | 5,253 | 5,316 | 10,557 | 11,783 | 8,200 | 15,264 | 20,882 | 51,547 | 62,559 | 86,885 |
| Net Interest Income | -1,045 | -1,590 | -1,590 | -1,590 | -1,590 | -1,590 | -1,590 | -1,590 | -1,932 | -975 | -709 | -2,406 | -3,728 | -4,251 | -4,280 | -5,815 | -6,360 | -6,360 |
| Net Other Income | 124 | 824 | -57 | -57 | -157 | -57 | -57 | -57 | -13 | 457 | 331 | 535 | 724 | 821 | 796 | 833 | -330 | -330 |
| Pre-Tax Profit | 9,022 | 12,227 | 12,726 | 12,589 | 10,236 | 12,577 | 16,451 | 16,605 | 3,309 | 4,799 | 10,180 | 9,911 | 5,195 | 11,835 | 17,399 | 46,564 | 55,870 | 80,195 |
| Tax | -2,027 | -2,502 | -2,672 | -2,581 | -2,300 | -3,144 | -3,455 | -3,387 | -778 | -1,004 | -2,325 | -2,311 | -1,217 | -2,629 | -3,833 | -9,782 | -12,286 | -17,462 |
| Net Profit | 6,723 | 9,713 | 10,073 | 9,998 | 7,926 | 9,153 | 13,016 | 13,208 | 2,531 | 3,794 | 7,866 | 7,361 | 3,742 | 8,842 | 13,274 | 36,508 | 43,303 | 62,453 |
| EPS (NT$) | 5.01 | 7.63 | 7.91 | 7.86 | 6.23 | 7.19 | 10.23 | 10.38 | 4.17 | 5.07 | 9.80 | 8.55 | 4.20 | 8.06 | 11.77 | 28.30 | 34.02 | 49.09 |
| Margins (%) | ||||||||||||||||||
| Gross Margin | 3.4% | 3.4% | 3.6% | 3.4% | 3.5% | 3.1% | 2.9% | 2.9% | 3.2% | 3.1% | 3.8% | 3.5% | 3.1% | 3.9% | 4.0% | 3.5% | 3.0% | 2.9% |
| Operating Margin | 2.0% | 2.2% | 2.4% | 2.2% | 2.2% | 1.9% | 1.7% | 1.7% | 1.6% | 1.5% | 2.4% | 2.1% | 1.4% | 1.6% | 1.8% | 2.2% | 1.8% | 1.9% |
| Net Margin | 1.4% | 1.6% | 1.7% | 1.6% | 1.5% | 1.2% | 1.3% | 1.2% | 0.8% | 1.1% | 1.8% | 1.3% | 0.6% | 0.9% | 1.1% | 1.6% | 1.3% | 1.3% |
| Sequential Growth (%) | ||||||||||||||||||
| Revenue | 0.4 | 20% | 2% | 5% | -15% | 41% | 37% | 2% | 23% | 5% | 27% | 28% | 4% | 61% | 23% | 97% | 47% | 36% |
| Gross Profit | 0.3 | 18% | 6% | 1% | -13% | 26% | 27% | 2% | 1% | 0% | 58% | 17% | -7% | 104% | 27% | 68% | 29% | 31% |
| EBIT | 0.7 | 31% | 11% | -1% | -16% | 19% | 27% | 1% | 0% | 1% | 99% | 12% | -30% | 86% | 37% | 147% | 21% | 39% |
| Net Profit | 0.6 | 44% | 4% | -1% | -21% | 15% | 42% | 1% | -9% | 50% | 107% | -6% | -49% | 136% | 50% | 175% | 19% | 44% |
| EPS | 0.3 | 52% | 4% | -1% | -21% | 15% | 42% | 1% | -11% | 22% | 93% | -13% | -51% | 92% | 46% | 140% | 20% | 44% |
© 2026 Citigroup Inc. No redistribution without Citigroup's written permission.
Source: Citi Research Estimates, Company Reports
NT$
384
320
256
192
64
Aug 25
4 63% Upside
NT$ 365.00
A 56% Upside
Bull/Bear: WT Micro (3036.TW)
BASE Assumptions
• Recovery in overall semiconductor market
- Mild recovery in auto/industrial sectors.
• Mild synergy created from the merger of Future.
BEAR Assumptions
- Slower recovery in overall semiconductor market · Furthur decline in auto/industrial sectors.
• No synergy created from the merger of Future.
NT$ 150.00
• 36% Downside
WT Micro
Company description
Founded in 1993, WT Micro focuses on semiconductor-related component agency sales. Currently, it ranks among the top four IC distributors globally and holds a market share of around 12%. Headquartered in Taiwan, WT Micro has an extensive marketing and sales channel with nearly 50 regional offices across China, Korea, Singapore, India, Thailand, Malaysia, and Vietnam. WT Micro currently serves as the distribution partner to >25,000 customers for over 80 global leading semiconductor partners. As of 2023, 28% revenues came from mobile phone, 22% from datacenter, 14% from communication, 10% from industrial, 10% from PC, 9% from consumer and 8% from automotive application
Investment strategy
We rate WT Micro as Buy. From a top-down view, we expect the IC distribution industry to be aided by semi upcycle on AI in 2026. We also see global supply chain relocation favoring WT Micro going forward given its more diversified global footprints. For its subsidiary, Future Electronics, which WT Micro acquired in 2024, we are seeing the merger bearing fruit given ongoing recovery in auto/industrial business for US/European customers with higher GM profile. Furthermore, we believe there is significant further potential from synergies, primarily through cross-selling to each company's customer base and securing new distribution rights in the U.S. and Europe.
Valuation
We use DCF methodology to derive our target price of NT$365. Key assumptions of our DCF model include a risk-free rate of 4.1% (10-year government bond rate), a market risk premium of 7%, and an equity beta of 0.9 (1-year weekly share price), which derives a WACC of 8.6%. Our model assumes 1% long-term revenue growth and gradual expanding of EBIT margin from 1.9% in 2028 to 2.3% in the long term. Our target price is equivalent to 13x/11x 2026/27E EPS and 3.3x/2.5x BVPS, which is in line with its peers' valuation and we believe is justified by AI trend, upsides from its subsidiary, Future Electronics.
Risks
Key downside risks that could prevent WT Micro's share price from reaching our target price are: 1) weaker-than-expected end market demand; 2) lowerthan-expected synergy from the acquisition of Future; 3) taking longer time to acquire new distribution rights or 4) aggressive funding for its working capital via higher leverage ratio (more interest expense) or GDR issuance (earnings dilution).
WT Micro (3036.TW)
Analyst: Jack Chen
TWD
300
200
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Date
Appendix A-1
*Indicates Change