PDF 原檔：報告_Citi_頎邦6147_20260730_original.pdf
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260730_citi_chipbond_002.png |
144KB | 真資料圖 | Chipbond Forward 1-yr P/E Band 與 P/B Band 雙圖（P/B 圖疊加 ROE 曲線，2010-2026） |
260730_citi_chipbond_004.png |
142KB | 真資料圖 | Chipbond 評等與目標價歷史圖（6 次評等/目標價變更標記表）+ Short-Term View/Catalyst Watch 覆蓋圖 |
260730_citi_chipbond_003.png |
96KB | 真資料圖 | Bull/Base/Bear 三情境目標價圖：NT$250（+111%）/NT$230（+94%）/NT$100（-16%），現價 NT$118.50（2026-07-30） |
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原始內容
(RIC: 0146.1WO, BB: 014611)
TWD
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50
Prepared for Kevin Lu
30 Jul 2026 13:27:34 ET │ 14 pages
Sep
Dec
Mar
Jun
Chipbond Technology (6147.TWO)
GM upbeat on high UTR and price hike; Buy
CITI'S TAKE
Chipbond's 2Q26 GM surprised to the upside and recovered back to 30% levels, which hasn't been reached after Covid period in 2020-22. We expect its GM could continuously improve QoQ given high season in 3Q26E. For LPO business, we expect the demand to pick up QoQ and grow more meaningfully in 2027E. In our view, LPO would benefit its GM profile in 2027E, as these products carry above corporate average GM profile. With core business recovery earlier and LPO upside, we raise our DCF-based TP to NT$230 (implied 29x 2027E EPS). Reiterate our Buy rating.
2Q26 GM strong beat; improving to 30% levels -2Q26 sales advanced 15% QoQ, which we believe is majorly driven by price hike and higher UTR (e.g., better OLED DDIC demand). 2Q26 GM surprised to the upside, posting 30.3% (+6.8ppt QoQ) vs Citi/consensus forecasts of 25.8%/26.4%. We attribute the better GM profile chiefly to price hike. Note that Chipbond's GM profile has not reached 30% levels after Covid period when DDIC was in shortage. We think the recovery pace is faster-thanexpected. Despite slightly higher OPEX, overall OP levels came in 25%/24% higher than Citi/consensus forecasts.
3Q26 high season to come -Given higher season for smartphone and likely some early pull-in demand in 1H, we currently expect 3Q26 sales to grow 3% QoQ. We expect 3Q26 GM to improve 0.4ppt QoQ to 30.7% on high season as well. In 4Q26, we expect 4Q26 sales to decline 2% QoQ slightly given generally low season.
LPO ramping up -The LPO business is on track to ramp in 2Q26. We expect the demand to gradually pick up from 3Q26 onwards. We knew there were concerns over competition from a new joiner,, ChipMOS. However, we think it will still take a few quarters for ChipMOS to catch up with Chipbond. As the TAM is still at early stage with rapidly growing demand, we think it is natural for customers to look for a new vendor. Also, we believe the market has overreacted to the competition, given the great sell-off in the past two months. We remain constructive on LPO demand and view it as GM-accretive.
Earnings/TP lift; -We raise our 2026/27/28E earnings by 7%/18%/18% to factor in better-than-expected GM profile. We raise our DCF-based TP to NT$230 (implied 29x 2027E EPS) from NT$210 and reiterate our Buy rating.
Earnings Summary
| Year to 31Dec | Net Profit (NT$M) | DilutedEPS (NT$) | EPSgrowth (%) | P/E (x) | P/B (x) | ROE (%) | Yield (%) |
|---|---|---|---|---|---|---|---|
| 2024A | 4,135 | 5.59 | 3.4 | 21.2 | 1.9 | 8.6 | 3.2 |
| 2025A | 2,775 | 3.75 | -33 | 31.6 | 1.9 | 5.9 | 2 |
| 2026E | 4,114 | 5.55 | 48.2 | 21.3 | 1.8 | 8.5 | 3 |
| 2027E | 6,105 | 8.24 | 48.4 | 14.4 | 1.7 | 11.9 | 4.5 |
| 2028E | 7,212 | 9.73 | 18.1 | 12.2 | 1.6 | 13.2 | 4.7 |
Source: Powered by dataCentral
See Appendix A-1 for Analyst Certification, Important Disclosures and Research Analyst Affiliations.
n Buy
Price (30 Jul 26 15:00)
NT$118.50
Target price
NT$230.00↑
from NT$210.00
Expected share price return
94.1%
Expected dividend yield
3.0%
Expected total return
97.1%
Market Cap
NT$88,234M
US$2,727M
Price Performance (RIC: 6147.TWO, BB: 6147 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
Prepared for Kevin Lu
| 6147.TWO: Fiscalyearend31-Dec | Price: NT$118.50; TP:NT$230.00; MarketCap:NT$88,234m; Recomm:Buy | Price: NT$118.50; TP:NT$230.00; MarketCap:NT$88,234m; Recomm:Buy | Price: NT$118.50; TP:NT$230.00; MarketCap:NT$88,234m; Recomm:Buy | Price: NT$118.50; TP:NT$230.00; MarketCap:NT$88,234m; Recomm:Buy | Price: NT$118.50; TP:NT$230.00; MarketCap:NT$88,234m; Recomm:Buy | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Profit&Loss(NT$m) | 2024 | 2025 | 2026E | 2027E | 2028E | Valuation ratios | 2024 | 2025 | 2026E | 2027E | 2028E |
| Sales revenue | 20,338 | 21,454 | 25,908 | 30,136 | 34,299 | PE(x) | 21.2 | 31.6 | 21.3 | 14.4 | 12.2 |
| Cost of sales | -15,769 | -16,863 | -18,494 | -21,215 | -23,852 | PB(x) | 1.9 | 1.9 | 1.8 | 1.7 | 1.6 |
| Gross profit | 4,569 | 4,591 | 7,414 | 8,921 | 10,447 | EV/EBITDA(x) | 10.3 | 11.6 | 8.3 | 6.7 | 5.7 |
| Gross Margin (%) | 22.5 | 21.4 | 28.6 | 29.6 | 30.5 | FCFyield (%) | 7.0 | -0.3 | 5.8 | 5.8 | 7.2 |
| EBITDA(Adj) | 5,892 | 5,359 | 7,454 | 8,880 | 9,980 | Dividend yield (%) | 3.2 | 2.0 | 3.0 | 4.5 | 4.7 |
| EBITDAMargin(Adj) (%) | 29.0 | 25.0 | 28.8 | 29.5 | 29.1 | Payout ratio (%) | 67 | 65 | 65 | 65 | 58 |
| Depreciation | -3,351 | -2,959 | -2,624 | -2,627 | -2,499 | ROE(%) | 8.6 | 5.9 | 8.5 | 11.9 | 13.2 |
| Amortisation | 0 | 0 | 0 | 0 | 0 | Cashflow(NT$m) | 2024 | 2025 | 2026E | 2027E | 2028E |
| EBIT (Adj) | 2,542 | 2,400 | 4,829 | 6,253 | 7,481 | EBITDA | 5,892 | 5,359 | 7,454 | 8,880 | 9,980 |
| EBIT Margin (Adj) (%) | 12.5 | 11.2 | 18.6 | 20.7 | 21.8 | Working capital | -367 | -790 | 1,438 | -405 | -220 |
| Net interest | 62 | 42 | 2 | 29 | 57 | Other | 1,593 | 375 | -715 | -148 | -269 |
| Associates | 1,815 | 996 | 807 | 865 | 932 | Operating cashflow | 7,118 | 4,945 | 8,177 | 8,327 | 9,491 |
| Non-Op/Except/Other Adj | 343 | -181 | -624 | 36 | 36 | Capex | -982 | -5,234 | -3,053 | -3,200 | -3,200 |
| Pre-tax profit | 4,762 | 3,256 | 5,015 | 7,183 | 8,506 | Net acq/disposals | 0 | 0 | 0 | 0 | 0 |
| Tax | -628 | -481 | -901 | -1,078 | -1,295 | Other | 3,243 | -234 | -807 | -865 | -932 |
| Extraord./Min.Int./Pref.div. | 0 | 0 | 0 | 0 | 0 | Investing cashflow | 2,261 | -5,469 | -3,860 | -4,065 | -4,132 |
| Reported net profit | 4,135 | 2,775 | 4,114 | 6,105 | 7,212 | Dividends paid | -2,793 | -2,793 | -1,804 | -2,674 | -3,968 |
| Net Margin (%) | 20.3 | 12.9 | 15.9 | 20.3 | 21.0 | Financing cashflow | -6,377 | -1,276 | 4,652 | -2,342 | -3,634 |
| CoreNPAT | 4,135 | 2,775 | 4,114 | 6,105 | 7,212 | Net change in cash | 3,002 | -1,800 | 8,969 | 1,919 | 1,724 |
| Per share data | 2024 | 2025 | 2026E | 2027E | 2028E | Free cashflow to s/holders | 6,136 | -290 | 5,123 | 5,127 | 6,291 |
| Reported EPS($) | 5.59 | 3.75 | 5.55 | 8.24 | 9.73 | ||||||
| Core EPS($) | 5.59 | 3.75 | 5.55 | 8.24 | 9.73 | ||||||
| DPS($) | 3.75 | 2.42 | 3.59 | 5.33 | 5.60 | ||||||
| CFPS($) | 9.63 | 6.67 | 11.03 | 11.23 | 12.80 | ||||||
| 8.30 | -0.39 | 6.91 | 6.92 | 8.49 | |||||||
| FCFPS($) BVPS($) | 63.29 | 63.62 | 66.72 | 71.33 | 75.68 | ||||||
| Wtdavgordshares(m) | 739 | 741 | 741 | 741 | 741 | ||||||
| Wtdavgdiluted shares (m) | 739 | 741 | 741 | 741 | 741 | ||||||
| Growthrates | 2024 | 2025 | 2026E | 2027E | 2028E | ||||||
| Sales revenue (%) | 1.4 | 5.5 | 20.8 | 16.3 | 13.8 | ||||||
| EBIT (Adj) (%) | -23.6 | -5.6 | 101.2 | 29.5 | 19.6 | ||||||
| CoreNPAT(%) | 3.5 | -32.9 | 48.2 | 48.4 | 18.1 | ||||||
| CoreEPS(%) | 3.4 | -33.0 | 48.2 | 48.4 | 18.1 | ||||||
| BalanceSheet(NT$m) | 2024 | 2025 | 2026E | 2027E | 2028E | ||||||
| Cash&cashequiv. | 8,625 | 6,825 | 15,794 | 17,713 | 19,437 | ||||||
| Accounts receivables | 4,138 | 4,118 | 5,560 | 6,795 | 7,416 | ||||||
| Inventory | 1,998 | 3,294 | 1,280 | 1,565 | 1,708 | ||||||
| Net fixed &other tangibles | 17,990 | 20,787 | 21,217 | 21,789 | 22,490 | ||||||
| Goodwill &intangibles | 0 | 0 | 0 | 0 | 0 | ||||||
| Financial &other assets | 19,273 | 19,206 | 20,097 | 21,060 | 22,041 | ||||||
| Total assets | 52,023 | 54,230 | 63,947 | 68,922 | 73,092 | ||||||
| Accounts payable | 789 | 879 | 1,006 | 1,264 | 1,377 | ||||||
| Short-term debt | 0 | 0 | 3,000 | 3,129 | 3,258 | ||||||
| Long-term debt | 0 | 1,257 | 4,714 | 4,917 | 5,120 | ||||||
| Provisions &other liab | 4,101 | 4,726 | 5,549 | 6,503 | 6,983 | ||||||
| Total liabilities | 4,890 | 6,862 | 14,269 | 15,813 | 16,739 | ||||||
| Shareholders' equity | 47,133 0 | 56,353 | |||||||||
| Minority interests | 47,368 0 | 49,679 0 | 53,109 0 | 0 | |||||||
| Total equity | 47,133 | 47,368 | 49,679 | 53,109 | 56,353 | ||||||
| Net debt (Adj) | -8,625 | -5,568 | -8,080 | -9,668 | -11,058 | ||||||
| Net debt to equity (Adj) (%) | -18.3 | ||||||||||
| For definitions of the items in this table, | please click here. | -11.8 | -16.3 | -18.2 | -19.6 |
Prepared for Kevin Lu
Figure 2. Chipbond - Earnings Revisions
| 3Q26E | 3Q26E | 3Q26E | 4Q26E | 4Q26E | 4Q26E | 2026E | 2026E | 2026E | 2027E | 2027E | 2027E | 2028E | 2028E | 2028E | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (NT$mn) | New | Old | Chg. | New | Old | Chg. | New | Old | Chg. | New | Old | Chg. | New | Old | Chg. |
| Sales | 6,844 | 6,413 | 7% | 6,675 | 6,242 | 7% | 25,908 | 24,588 | 5% | 30,136 | 29,081 | 4% | 34,299 | 33,104 | 4% |
| Sequential growth | 3% | 4% | -2% | -3% | 21% | 15% | 16% | 18% | 14% | 14% | |||||
| Gross profit | 2,103 | 1,712 | 23% | 1,951 | 1,597 | 22% | 7,414 | 6,253 | 19% | 8,921 | 7,720 | 16% | 10,447 | 9,005 | 16% |
| Opex | 630 | 590 | 7% | 661 | 618 | 7% | 2,585 | 2,339 | 11% | 2,668 | 2,574 | 4% | 2,966 | 2,863 | 4% |
| Operating profit | 1,474 | 1,122 | 31% | 1,290 | 979 | 32% | 4,829 | 3,915 | 23% | 6,253 | 5,145 | 22% | 7,481 | 6,142 | 22% |
| Pre-tax profit | 1,680 | 1,328 | 26% | 1,471 | 1,161 | 27% | 5,015 | 4,459 | 12% | 7,183 | 6,075 | 18% | 8,506 | 7,168 | 19% |
| Net income | 1,462 | 1,156 | 26% | 1,265 | 998 | 27% | 4,114 | 3,846 | 7% | 6,105 | 5,163 | 18% | 7,212 | 6,090 | 18% |
| EPS(NT$) | 1.97 | 1.56 | 26% | 1.71 | 1.35 | 27% | 5.55 | 5.19 | 7% | 8.24 | 6.97 | 18% | 9.73 | 8.22 | 18% |
| Gross margin | 30.7% | 26.7% | +4.0 ppt | 29.2% | 25.6% | +3.6 ppt | 28.6% | 25.4% | +3.2 ppt | 29.6% | 26.5% | +3.1 ppt | 30.5% | 27.2% | +3.3 ppt |
| Opexratio | 9.2% | 9.2% | +0.0ppt | 9.9% | 9.9% | -0.0 ppt | 10.0% | 9.5% | +0.5 ppt | 8.9% | 8.9% | +0.0ppt | 8.6% | 8.6% | +0.0ppt |
| Operating margin | 21.5% | 17.5% | +4.0 ppt | 19.3% | 15.7% | +3.6 ppt | 18.6% | 15.9% | +2.7 ppt | 20.7% | 17.7% | +3.1 ppt | 21.8% | 18.6% | +3.3 ppt |
| Net margin | 21.4% | 18.0% | +3.3 ppt | 19.0% | 16.0% | +3.0 ppt | 15.9% | 15.6% | +0.2 ppt | 20.3% | 17.8% | +2.5 ppt | 21.0% | 18.4% | +2.6 ppt |
© 2026 Citigroup Inc. No redistribution without Citigroup's written permission.
Source: Citi Research estimates
Figure 1. Chipbond - 2Q26 Results
| (NT$mn) | 2Q26 Actual | 1Q26 Actual | Q/Q | 2Q25 Actual | Y/Y | 2Q26 Citi | Diff. | 2Q26 Cons. | Diff. |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 6,632 | 5,756 | 15% | 5,373 | 23% | 6,178 | 7% | 6,256 | 6% |
| Gross profit | 2,010 | 1,350 | 49% | 1,100 | 83% | 1,594 | 26% | 1,643 | 22% |
| Gross margin | 30.3% | 23.5% | +6.8 ppt | 20.5% | +9.8 ppt | 25.8% | +4.5 ppt | 26.3% | +4.0 ppt |
| Op. profit | 1,278 | 788 | 62% | 587 | 118% | 1,025 | 25% | 1,032 | 24% |
| OPmargin | 19.3% | 13.7% | +5.6 ppt | 10.9% | +8.4 ppt | 16.6% | +2.7 ppt | 16.5% | +2.8 ppt |
| Net income | 950 | 437 | 117% | 410 | 132% | 1,255 | -24% | 1,051 | -10% |
| EPS(NT$) | 1.28 | 0.59 | 117% | 0.55 | 131% | 1.69 | -24% | 1.46 | -12% |
© 2026 Citigroup Inc. No redistribution without Citigroup's written permission.
Source: Citi Research Estimates, Company Reports, Bloomberg
Prepared for Kevin Lu
Figure 3. Chipbond - Key Earnings Estimates
| Chipbond (NT$ in Mn, year-end | 2027 2026 | 2027 2026 | 2027 2026 | 2027 2026 | 2027 2026 | 2027 2026 | 2027 2026 | 2027 2026 | 2027 2026 | 2027 2026 | 2027 2026 | 2027 2026 | 2027 2026 | 2027 2026 | 2027 2026 | 2027 2026 | 2027 2026 | 2027 2026 | |||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec) | 1Q | 2QE | 3QE | 4QE | 1QE | 2QE | 3QE | 4QE | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 2026E | 2027E | 2028E | ||
| Revenue | 5,756 | 6,632 | 6,844 | 6,675 | 6,551 | 7,390 | 8,036 | 8,159 | 18,428 | 18,725 | 20,419 | 22,275 27,082 | 24,010 | 20,056 | 20,338 | 21,454 | 25,908 | 30,136 | 34,299 | ||
| COGS | -4,405 | -4,623 | -4,741 | -4,725 | -4,782 | -5,146 | -5,552 | -5,735 | -13,946 | -13,360 | -13,640 | -15,995 -18,330 | -16,177 | -14,930 | -15,769 | -16,863 | -18,494 | -21,215 | -23,852 | ||
| Gross Profit | 1,350 | 2,010 | 2,103 | 1,951 | 1,769 | 2,244 | 2,485 | 2,423 | 4,482 | 5,365 | 6,780 | 6,280 | 8,752 | 7,833 | 5,126 4,569 | 4,591 | 7,414 | 8,921 | 10,447 | ||
| Operating Expense | -562 | -732 | -630 | -661 | -590 | -621 | -723 | -734 | -1,294 | -1,466 | -1,371 -1,445 | -1,858 | -1,956 | -1,800 | -2,027 | -2,191 | -2,585 | -2,668 | -2,966 | ||
| SG&A expenses | -393 | -539 | -424 | -461 | -400 | -406 | -490 | -498 | -887 | -1,025 | -878 | -920 | -1,198 | -1,194 | -1,213 | -1,389 | -1,513 | -1,817 | -1,794 | -2,024 | |
| R&D expenses | -169 | -193 | -205 | -200 | -190 | -214 | -233 | -237 | -408 | -440 | -494 | -526 | -660 | -762 | -587 | -638 | -678 | -768 | -874 | -943 | |
| EBIT | 788 | 1,278 | 1,474 | 1,290 | 1,179 | 1,623 | 1,761 | 1,689 | 3,188 | 3,900 | 5,408 | 4,835 | 6,894 | 5,877 | 3,326 | 2,542 | 2,400 | 4,829 | 6,253 | 7,481 | |
| Net Interest Income | -8 | 5 | 3 | 2 | 2 | 10 | 9 | 8 | 0 | -31 | -22 | -36 | -23 | -15 | 18 | 62 | 42 | 2 | 29 | 57 | |
| Net Other Income | -287 | 87 | 203 | 179 | 8 | 492 | 213 | 188 | -350 | -302 | -134 | -348 | 558 | 1,797 | 1,418 | 2,158 | 815 | 183 | 901 | 968 | |
| Pre-Tax Profit | 493 | 1,371 | 1,680 | 1,471 | 1,189 | 2,126 | 1,983 | 1,885 | 2,838 | 3,566 | 5,253 | 4,450 | 7,428 | 7,659 | 4,762 | 4,762 | 3,256 | 5,015 | 7,183 | 8,506 | |
| Tax | 56 | 421 | 218 | 206 | 238 | 319 | 258 | 264 | -526 | -879 | -1,163 | -789 | -1,291 | -1,450 | -767 | -628 | -481 2,775 | -901 | -1,078 | -1,295 | |
| Net Profit | 437 | 950 | 1,462 | 1,265 | 952 | 1,807 | 1,725 | 1,621 | 2,254 | 4,515 | 4,090 | 3,661 | 6,137 | 6,209 | 3,995 | 4,135 | 4,114 | 6,105 | 7,212 | ||
| EPS (NT$) | 0.59 | 1.28 | 1.97 | 1.71 | 1.28 | 2.44 | 2.33 | 2.19 | 3.46 | 6.90 | 6.19 | 5.61 | 9.10 | 8.41 | 5.41 | 5.59 | 3.75 | 5.55 | 8.24 | 9.73 | |
| Margins (%) | |||||||||||||||||||||
| Gross Margin | 23.5 | 30.3 | 30.7 | 29.2 | 27.0 | 30.4 | 30.9 | 29.7 | 24.3 | 28.7 | 33.2 | 28.2 | 32.3 | 32.6 | 25.6 | 22.5 | 21.4 | 28.6 | 29.6 | 30.5 | |
| Operating Margin | 13.7 | 19.3 | 21.5 | 19.3 | 18.0 | 22.0 | 21.9 | 20.7 | 17.3 | 20.8 | 26.5 | 21.7 | 25.5 | 24.5 | 16.6 | 12.5 | 11.2 | 18.6 | 20.7 | 21.8 | |
| Net Margin | 7.6 | 14.3 | 21.4 | 19.0 | 14.5 | 24.5 | 21.5 | 19.9 | 12.2 | 24.1 | 20.0 | 16.4 | 22.7 | 25.9 | 19.9 | 20.3 | 12.9 | 15.9 | 20.3 | 21.0 | |
| Sequential Growth (%) | |||||||||||||||||||||
| Revenue | 6.7 | 15.2 | 3.2 | -2.5 | -1.9 | 12.8 | 8.8 | 1.5 | 6.8 | 1.6 | 9.0 | 9.1 | 21.6 | -11.3 | -16.5 | 1.4 | 5.5 | 20.8 | 16.3 | 13.8 | |
| Gross Profit | 18.3 | 48.8 | 4.7 | -7.3 | -9.3 | 26.9 | 10.7 | -2.5 | 7.5 | 19.7 | 26.4 | -7.4 | 39.4 | -10.5 | -34.6 | -10.9 | 0.5 | 61.5 | 20.3 | 17.1 | |
| EBIT | 54.0 | 62.2 | 15.3 | -12.5 | -8.6 | 37.7 | 8.5 | -4.1 | 15.1 | 22.3 | 38.7 | -10.6 | 42.6 | -14.7 | -43.4 | -23.6 | -5.6 | 101.2 | 29.5 | 19.6 | |
| Net Profit | -47.4 | 117.3 | 53.8 | -13.4 | -24.8 | 89.9 | -4.5 | -6.0 | 13.1 | 100.3 | -9.4 | -10.5 | 67.6 | 1.2 | -35.7 | 3.5 | -32.9 | 48.2 | 48.4 | 18.1 | |
| EPS | -47.4 | 117.3 | 53.8 | -13.4 | -24.8 | 89.9 | -4.5 | -6.0 | 12.7 | 99.5 | -10.3 | -9.4 | 62.3 | -7.7 | -35.7 | 3.4 | -33.0 | 48.2 | 48.4 | 18.1 |
© 2026 Citigroup Inc. No redistribution without Citigroup's written permission.
Source: Company data, Citi Research estimates
NT$
306
255
204
153
102
51
Jul 25
• More share gain from peers with potential price hike to reflect inflation
• 111% Upside
NT$ 230.00
4 94% Upside
NT$ 100.00
• 16% Downside
Bull/Bear: Chipbond Technology (6147.TWO)
BASE Assumptions
Stabilizing DDIC demand from smartphone
- Gold price maintaining at the similar levels
• Steady progress in SiPh market
BEAR Assumptions
• Slower growth in SiPh market
- F7 • Lower-than-expected smartphone demand, especially from iPhone
• Rising gold prices
Prepared for Kevin Lu
Prepared for Kevin Lu
Chipbond Technology
Company description
Chipbond, established in 1997, provides turnkey services for back-end assembly processing of LCD driver ICs, from wafer bumping to packaging. Chipbond is the largest LCD driver IC back-end supplier.
Investment strategy
We rate Chipbond shares as Buy, as we see signs of stabilization in its main DDIC business. Despite tepid smartphone demand, OLED would partially support its ASP of its testing business with penetration on the rise steadily. Meanwhile, the company would potentially gain share in DDIC from Korean packaging peers as well. The company would also raise the price to customers to reflect the inflation. Further, the company is developing optical products with its gold bumping technology. Given its leading position in gold bumping, we believe Chipbond would benefit from it meaningfully in the next few years.
Valuation
Our target price for Chipbond of NT$230 is derived from a DCF model. We use a 1-year forward-looking DCF-based valuation (ie, end-2027) to reflect Chipbond's ability to generate stable cash. Using a risk-free rate of 4.3%, a market risk premium of 7%, and an equity beta of 0.92, we calculate Chipbond's WACC as 10.2%. Our model assumes 2% long-term revenue growth starting in 2036E and EBIT margin of 18.6% in 2028E with GM expansion in the following years. Our target price is equivalent to a P/E of 41x/28x 2026/27E and P/B of 3.4/3.2x 2026/27E.
Risks
Key downside risks that could prevent the shares from reaching our target price include: 1) lower-than-expected photonics contribution; 2) lower-thanexpected smartphone sales, especially for OLED smartphone models; 3) lower-than-expected PCNB demand or 4K TV penetration, and 4) failure to raise price to at least pass through the inflation.
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