PDF 原檔：報告_MS_台灣CCL產業_3Q26_20261028_original.pdf
原始內容
M Idea October 28, 2026 08:04 PM GMT
Greater China Technology Hardware | Asia Pacific
CCL: 3Q26 GM Beat; Stay OW
In Taiwan, we prefer TUC over MC for greater pricing upside in the next 12 months, given its higher exposure to midrange/lowend CCL. Both stocks are attractively valued: MC at 11x CY28e P/ and TUC at 9x.
EMC (2383.TW)
- EMC has introduced a new expansion plan for its total CC capacity to reach 11.95mn sheets per month (SPM) in 2029 and 15.25mn in 2030 (+14% and +28% y/y). See Exhibit 3 for EMC's 2026-2030 capacity plans.
- EMC's substrate CC capacity currently sits at 300K SPM. The company expects to add another 900K SPM in 2H27, reaching 1.2M SPM by end-2027. Our supply chain checks suggest that a US hyperscaler will be the first key customer of EMC's ABF substrate CC s for its eighth-generation ASIC (see our TPCA takeaways).
- Management noted a growing trend of customers requesting long-term agreements that span at least three years, on average. These TAs now secure volume rather than fixing prices; they do not require prepayments from customers. Despite the flexibility in pricing and payment, customers will still face punishment if they fail to pull their promised volumes.
- We estimate that 4Q revenue will grow ~19% q/q, to NT$72.4bn (+190% y/y), supported by pricing adjustments and continued mix improvement, given limited capacity increase in 4Q. We see GM expanding 220bps q/q, to 39.9%, for EPS of NT$53.33 (+32% q/q).
TUC (6274.TWO)
- Management expects price hikes to continue into 4Q, with new pricing for its M7/8 CC taking effect from November onwards. For M6 and below, pricing will remain driven by raw material cost pass-through amid supply tightness. We expect this trend to persist into 2027, with HV P4 copper foil, E glass, and DK2 glass cloth to be the most undersupplied.
- We believe recent market concerns about TUC's "share loss" for an ASIC customer are overdone. Given the ongoing supply tightness in the high-end CC market, it is normal for CSPs to adopt multi-sourcing strategies to diversify supply risks. Meanwhile, we believe TUC is actively engaging and sampling high-end M8+ grade materials with other major CSP customer(s) for next-gen AI projects. TUC's share in a key satellite customer's next-gen satellite products will potentially expand in 2027 as well, with materials upgraded to M7/8.
- We expect 4Q revenue to grow 15% q/q, to NT$20.6bn (+126% y/y), driven by pricing adjustments and capacity addition at TUC's site in Thailand site (+100K SPM in 4Q, +200K SPM in 3Q). We see GM expanding 50bps q/q, to 37.4%, for EPS of NT$15.82 (+20% q/q).
Morgan Stanley Taiwan Limited+
Irene Yen
Equity Analyst
+886 2 2730-2869
Howard Kao
Equity Analyst
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Morgan Stanley Asia Limited+
Andy Meng, CFA
Equity Analyst
+852 2239-7689
Morgan Stanley appreciates your support in the 2027 Extel Asia Research Survey. Voting opens 10 Novem er 2026.
Greater China Technology Hardware
Asia Pacific Industry View In-Line
Exhibit 1 What's changed
Source: 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.
M Idea
AlphaSignals Earnings Reaction
| Impact to our thesis | Financial results versus consensus | Direction of next 2-month consensus EPS |
|---|---|---|
| Elite Material Co. (2383.TW) | ||
| Strengthens our thesis | Modest upside | Modest revision higher |
| Taiwan Union Technology Corporation | (6274.TWO) | |
| Strengthens our thesis | Modest upside | Modest revision higher |
Source: Company data, Morgan Stanley Research M Idea
Results Summary
EMC
3Q GM was 37.7% (+380bps q/q), 170bps aboce our estimate and 160bps above the Street, driven by price increases (some delayed impacts from 2Q) and improved product mix. We believe 3Q GM also slightly beat buy-side consensus of ~37%. Opex was slightly higher, so OP came in at NT$18.7bn (+47% q/q), 13% above our estimate and the Street, for OpM of 30.7%. NP was NT$14.5bn (+47% q/q), also 13% above our estimate and the Street, for EPS of NT$40.47.
3Q26 mix by segment: Mobile Device 10-15%, Infr structure 75-80%, Automotive, Industri l & Others 5-10%.
Exhibit 2 EMC: 3Q26 esults summa y
| NT$mn | 3Q26P Results - Actual | 3Q26P Results - QoQ | 3Q26P Results - YoY | MS Est. | Variance | Cons | Variance |
|---|---|---|---|---|---|---|---|
| Net sales | 60,885 | 29% | 142% | 55,662 | 9% | 56,662 | 7% |
| COGS | -37,934 | 21% | 116% | -35,636 | 6% | -36,220 | 5% |
| Gross profit | 22,951 | 43% | 203% | 20,026 | 15% | 20,442 | 12% |
| Operating expenses | -4,264 | 30% | 65% | -3,509 | 22% | -3,840 | 11% |
| Operating income | 18,687 | 47% | 274% | 16,516 | 13% | 16,602 | 13% |
| Non-operating income | 17 | -67% | -87% | 11 | 52% | -32 | NM |
| Pre-tax income | 18,703 | 46% | 265% | 16,528 | 13% | 16,570 | 13% |
| Income tax | -4,204 | 44% | 263% | -3,719 | 13% | -3,700 | 14% |
| Net income | 14,500 | 47% | 266% | 12,809 | 13% | 12,870 | 13% |
| EPS (NT$) | 40.47 | 47% | 262% | 35.75 | 13% | 35.92 | 13% |
| Margins (%) | ppt | ppt | ppt | ppt | |||
| Gross margin | 37.7% | 3.8 | 7.6 | 36.0% | 1.7 | 36.1% | 1.6 |
| Operating margin | 30.7% | 3.8 | 10.8 | 29.7% | 1.0 | 29.3% | 1.4 |
| Pre-tax margin | 30.7% | 3.7 | 10.4 | 29.7% | 1.0 | 29.2% | 1.5 |
| Net margin | 23.8% | 2.9 | 8.0 | 23.0% | 0.8 | 22.7% | 1.1 |
Sou ce: Company data, Visible Alpha, Mo gan Stanley Resea ch estimates.
We tone down our capacity assumption forecasts 5% each for 2026 and 2027 and 7% for 2028 to reflect adjustments to EMC's expansion plans for the next five years, which primarily include a delay in its plant expansion in Taiwan. The company is also introducing new expansion plans for its total CC capacity to reach 11.95mn sheets per month (SPM) in 2029 and 15.25mn in 2030 (+14% and +28% y/y).
Exhibit 3 Changes to EMC's CCL capacity expansion plan
| Year End | 2026 - New | 2026 - Old | 2026 - Diff. | 2027 - New | 2027 - Old | 2027 - Diff. | 2028 - New | 2028 - Old | 2028 - Diff. | 2029 (NEW) - New | 2029 (NEW) - Old | 2029 (NEW) - y/y | 2030 (NEW) - New | 2030 (NEW) - Old | 2030 (NEW) - y/y |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| K sheets per month | 5,850 | 6,150 | -5% | 9,000 | 9,450 | -5% | 10,450 | 11,250 | -7% | 11,950 | NA | 14% | 15,250 | NA | 28% |
Sou ce: Company data, Mo gan Stanley Resea ch.
M Idea
TUC
3Q GM was 36.9% (+720bps q/q), 520bps above our estimate and 440bps above the Street, primarily driven by improved profitability of the plant in Thailand as well as CC price hikes, particularly for the lower grade, non-low loss CC . We believe 3Q GM beat even compared to buy-side consensus of 34-35%. As a result, 3Q OP came in at NT$5.6bn (+66% q/q, +340% y/y), 13% above our estimate and 20% above the Street, for OpM of 31.0% (+750bps q/q). NP was NT$3,857mn (+65% q/q), only 5% above our estimate and 9% above the Street, owing to higher-than-expected tax rate, for EPS of NT$13.21.
TUC's plant in Thailand achieved positive GM in 3Q, driven by scale benefits; the plant's 3Q profits have offset its losses in 1H26. That said, heavy flooding in Thailand since late September has delayed a portion of shipments from this plant into October and November.
3Q26 mix by product gr de: Extreme LL & Super LL 38%, Very LL & LL 28%, HDI & Non LL 19%, Others 15%.
Exhibit 4 TUC: 3Q26 esults summa y
| NT$mn | 3Q26P Results - Actual | 3Q26P Results - QoQ | 3Q26P Results - YoY | MS Est. | Variance | Cons | Variance |
|---|---|---|---|---|---|---|---|
| Net sales | 17,949 | 26% | 123% | 18,706 | -4% | 17,566 | 2% |
| COGS | -11,321 | 13% | 84% | -12,771 | -11% | -11,853 | -4% |
| Gross profit | 6,628 | 56% | 246% | 5,935 | 12% | 5,713 | 16% |
| Operating expenses | -1,060 | 19% | 63% | -1,028 | 3% | -1,066 | -1% |
| Operating income | 5,568 | 66% | 340% | 4,907 | 13% | 4,647 | 20% |
| Non-operating income | 26 | -62% | -50% | -10 | NM | 16 | 62% |
| Pre-tax income | 5,594 | 63% | 325% | 4,897 | 14% | 4,663 | 20% |
| Income tax | -1,738 | 60% | 451% | -1,224 | 42% | -1,117 | 56% |
| Net income | 3,857 | 65% | 285% | 3,673 | 5% | 3,547 | 9% |
| EPS (NT$) | 13.21 | 65% | 268% | 12.58 | 5% | 12.14 | 9% |
| Margins (%) | ppt | ppt | ppt | ppt | |||
| Gross margin | 36.9% | 7.2 | 13.2 | 31.7% | 5.2 | 32.5% | 4.4 |
| Operating margin | 31.0% | 7.5 | 15.3 | 26.2% | 4.8 | 26.5% | 4.6 |
| Pre-tax margin | 31.2% | 7.2 | 14.8 | 26.2% | 5.0 | 26.5% | 4.6 |
| Net margin | 21.5% | 5.1 | 9.1 | 19.6% | 1.9 | 20.2% | 1.3 |
Sou ce: Company data, Visible Alpha, Mo gan Stanley Resea ch estimates.
Our capacity assumptions for TUC remain largely unchanged for 2026-28. TUC's CC capacity is on track to reach 2.6mn SPM by end-2026, 3.8mn SPM by end-2027, and 5.3mn SPM by end 2028, including capacity expansions across Thailand, Changshu, and Zhongshan.
M Idea
MC: arnings stimate Changes
We adjust our model, baking in our latest forecasts. Our EPS estimates increase 12% for CY26, 10% for CY27, and 6% for CY28, reflecting both higher revenue and margin assumptions following the 3Q26 results beat.
Exhibit 5 Ea nings estimate changes
| NT$ mn | 2026e - New | 2026e - Old | 2026e - Variance | 2027e - New | 2027e - Old | 2027e - Variance | 2028e - New | 2028e - Old | 2028e - Variance |
|---|---|---|---|---|---|---|---|---|---|
| Net sales | 213,629 | 199,950 | 7% | 377,334 | 357,306 | 6% | 525,573 | 513,466 | 2% |
| COGS | -136,024 | -130,390 | 4% | -220,830 | -216,938 | 2% | -297,898 | -300,708 | -1% |
| Gross profit | 77,605 | 69,559 | 12% | 156,504 | 140,369 | 11% | 227,675 | 212,758 | 7% |
| Operating expenses | -14,722 | -13,123 | 12% | -20,006 | -16,786 | 19% | -22,212 | -18,981 | 17% |
| Operating income | 62,882 | 56,436 | 11% | 136,498 | 123,583 | 10% | 205,463 | 193,777 | 6% |
| Non-operating income | 145 | 140 | 4% | 45 | 45 | 0% | 45 | 45 | 0% |
| Pre-tax income | 63,028 | 56,576 | 11% | 136,542 | 123,627 | 10% | 205,508 | 193,821 | 6% |
| Income tax | -14,207 | -12,802 | 11% | -31,245 | -28,227 | 11% | -47,363 | -44,674 | 6% |
| Net income | 48,824 | 43,776 | 12% | 105,298 | 95,400 | 10% | 158,145 | 149,147 | 6% |
| EPS (NT$) | 136.26 | 122.17 | 12% | 293.86 | 266.24 | 10% | 441.35 | 416.24 | 6% |
| Margins (%) | ppt | ppt | ppt | ||||||
| Gross margin | 36.3% | 34.8% | 1.5 | 41.5% | 39.3% | 2.2 | 43.3% | 41.4% | 1.9 |
| Operating margin | 29.4% | 28.2% | 1.2 | 36.2% | 34.6% | 1.6 | 39.1% | 37.7% | 1.4 |
| Pre-tax margin | 29.5% | 28.3% | 1.2 | 36.2% | 34.6% | 1.6 | 39.1% | 37.7% | 1.4 |
| Net margin | 22.9% | 21.9% | 1.0 | 27.9% | 26.7% | 1.2 | 30.1% | 29.0% | 1.0 |
Sou ce: Mo gan Stanley Resea ch (E) estimates.
Price Target Discussion and Valuation Methodology
Our price target f r EMC increases ~5%, t NT$8,800, driven by increases in ur 2026-28 earnings estimates: Our new price target implies 20x CY28e P/E (unchanged). Our price target is also our base case scenario value. It is derived from our residual income
(RI) model (similar to the rest of our tech hardware coverage).
To calculate the value of the stock, we use the company's beginning equity plus the present value of all expected residual income of earnings in excess of cost of capital. The RI is positive when ROAE is above the cost of capital and negative when it is below the cost of capital. Our key assumptions (all unchanged) include a cost of equity of 9.3% (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%.
The 20x CY28 P/E implied by our price target is slightly above the past three years' average +1SD of 18x, but much lower than the 32x recent P/E peak. We deem this valuation fair because EMC is benefiting from an earnings growth cycle fueled by stronger AI server CC demand, EMC's own mix improvement, and continued pricing adjustments, which should support margin expansion.
Our bull and bear case values als increase ~5%, t NT$13,650 and NT$4,200, respectively.
M Idea
Exhibit 6 Residual income (RI) model
| 2027E | 2028E | 2029E | 2030E | 2031E | 2032E | 2033E | 2034E | 2035E | 2036E | 2037E | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total Equity | 166,268 | 261,451 | 331,830 | 410,655 | 498,938 | 597,816 | 708,559 | 832,590 | 971,506 | 1,127,092 | 1,266,107 | |
| Net Profit | 105,298 | 158,145 | 177,122 | 198,376 | 222,182 | 248,843 | 278,705 | 312,149 | 349,607 | 391,560 | 403,307 | |
| Return on Equity | 82.1% | 73.9% | 59.7% | 53.4% | 48.9% | 45.4% | 42.7% | 40.5% | 38.8% | 37.3% | 33.7% | |
| Beta | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 |
| Equity Risk Premium (Rm-Rf) | 8.7% | 8.7% | 8.7% | 8.7% | 8.7% | 8.7% | 8.7% | 8.7% | 8.7% | 8.7% | 8.7% | 8.7% |
| Risk Free Rate (Rf) | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% |
| Cost of Equity | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% |
| Residual Income | 65,658 | 107,482 | 131,785 | 146,443 | 162,410 | 179,988 | 199,458 | 221,103 | 245,223 | 272,142 | 275,015 | |
| Spread | 72.8% | 64.6% | 50.4% | 44.1% | 39.5% | 36.1% | 33.4% | 31.2% | 29.5% | 28.0% | 24.4% | |
| Beginning Equity Capital | 166,268 | |||||||||||
| PV of Forecast Period | 1,141,031 | |||||||||||
| PV of Continuing Value | 1,845,937 | |||||||||||
| Equity Value | 3,153,236 | |||||||||||
| No. of Shares | 358 | |||||||||||
| Projected Price | 8,800.0 | |||||||||||
| Implied CY27 PE | 30x | |||||||||||
| Implied CY28 PE | 20x |
Sou ce: Company data, Mo gan Stanley Resea ch (E) estimates.
Sou ce: Company data, Mo gan Stanley Resea ch estimates.
M Idea
Financials
Exhibit 8 Qua te ly Ea nings Estimates
| 1Q26 | 2Q26 | 3Q26P | 4Q26E | 1Q27E | 2Q27E | 3Q27E | 4Q27E | 2025 | 2026E | 2027E | 2028E | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales | 33,067 | 47,275 | 60,885 | 72,402 | 77,796 | 84,307 | 98,936 | 116,294 | 94,261 | 213,629 | 377,334 | 525,573 |
| COGS | (23,338) | (31,272) | (37,934) | (43,480) | (46,232) | (49,500) | (57,706) | (67,392) | (66,141) | (136,024) | (220,830) | (297,898) |
| Gross profit | 9,729 | 16,003 | 22,951 | 28,922 | 31,564 | 34,807 | 41,231 | 48,902 | 28,120 | 77,605 | 156,504 | 227,675 |
| Operating expenses | (2,601) | (3,269) | (4,264) | (4,588) | (4,658) | (4,814) | (5,104) | (5,431) | (9,012) | (14,722) | (20,006) | (22,212) |
| SG&A | (1,836) | (2,363) | (3,321) | (3,608) | (3,687) | (3,804) | (4,054) | (4,359) | (6,870) | (11,128) | (15,904) | (17,780) |
| R&D | (764) | (907) | (943) | (981) | (971) | (1,010) | (1,050) | (1,071) | (2,142) | (3,595) | (4,102) | (4,432) |
| Operating income | 7,128 | 12,734 | 18,687 | 24,334 | 26,906 | 29,993 | 36,127 | 43,472 | 19,108 | 62,882 | 136,498 | 205,463 |
| Non-operating income | 66 | 52 | 17 | 11 | 11 | 11 | 11 | 11 | (232) | 145 | 45 | 45 |
| Interest income | (65) | (89) | (89) | (89) | (89) | (89) | (89) | (89) | (216) | (332) | (355) | (355) |
| Investment income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Disposal of investment | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Exchange gain | (3) | 72 | 0 | 0 | 0 | 0 | 0 | 0 | (108) | 69 | 0 | 0 |
| Other | 134 | 68 | 106 | 100 | 100 | 100 | 100 | 100 | 92 | 408 | 400 | 400 |
| Pre-tax income | 7,194 | 12,785 | 18,703 | 24,345 | 26,917 | 30,004 | 36,138 | 43,483 | 18,876 | 63,028 | 136,542 | 205,508 |
| Income tax | (1,855) | (2,914) | (4,204) | (5,234) | (6,864) | (6,901) | (8,131) | (9,349) | (4,231) | (14,207) | (31,245) | (47,363) |
| Minority interest | (1) | (2) | (1) | 0 | 0 | 0 | 0 | 0 | (4) | (3) | 0 | 0 |
| Net income | 5,340 | 9,873 | 14,500 | 19,111 | 20,053 | 23,103 | 28,007 | 34,134 | 14,649 | 48,824 | 105,298 | 158,145 |
| Adj.wtd.avg.shrs (mn) | 358 | 358 | 358 | 358 | 358 | 358 | 358 | 358 | 352 | 358 | 358 | 358 |
| EPS | 14.90 | 27.55 | 40.47 | 53.33 | 55.96 | 64.48 | 78.16 | 95.26 | 41.67 | 136.26 | 293.86 | 441.35 |
| Fully Diluted shares (mn) | 358 | 358 | 358 | 358 | 358 | 358 | 358 | 358 | 352 | 358 | 358 | 358 |
| Diluted EPS (NT$) | 14.90 | 27.55 | 40.47 | 53.33 | 55.96 | 64.48 | 78.16 | 95.26 | 41.67 | 136.26 | 293.86 | 441.35 |
| Margins (%) | ||||||||||||
| Gross Margin | 29.4 | 33.9 | 37.7 | 39.9 | 40.6 | 41.3 | 41.7 | 42.1 | 29.8 | 36.3 | 41.5 | 43.3 |
| Operating Margin | 21.6 | 26.9 | 30.7 | 33.6 | 34.6 | 35.6 | 36.5 | 37.4 | 20.3 | 29.4 | 36.2 | 39.1 |
| Pretax Margin | 21.8 | 27.0 | 30.7 | 33.6 | 34.6 | 35.6 | 36.5 | 37.4 | 20.0 | 29.5 | 36.2 | 39.1 |
| Net Margin | 16.1 | 20.9 | 23.8 | 26.4 | 25.8 | 27.4 | 28.3 | 29.4 | 15.5 | 22.9 | 27.9 | 30.1 |
| QoQ Growth (%) | ||||||||||||
| Sales | 33 | 43 | 29 | 19 | 7 | 8 | 17 | 18 | ||||
| Gross Profit | 37 | 64 | 43 | 26 | 9 | 10 | 18 | 19 | ||||
| Operating Profit | 44 | 79 | 47 | 30 | 11 | 11 | 20 | 20 | ||||
| Pretax Profit | 56 | 78 | 46 | 30 | 11 | 11 | 20 | 20 | ||||
| Net Profit | 43 | 85 | 47 | 32 | 5 | 15 | 21 | 22 | ||||
| YoY Growth (%) | ||||||||||||
| Sales | 53 | 110 | 142 | 190 | 135 | 78 | 62 | 61 | 46 | 127 | 77 | 39 |
| Gross Profit | 48 | 134 | 203 | 306 | 224 | 118 | 80 | 69 | 56 | 176 | 102 | 45 |
| Operating Profit | 57 | 174 | 274 | 393 | 277 | 136 | 93 | 79 | 57 | 229 | 117 | 51 |
| Pretax Profit | 54 | 186 | 265 | 427 | 274 | 135 | 93 | 79 | 56 | 234 | 117 | 51 |
| Net Profit | 54 | 184 | 266 | 411 | 276 | 134 | 93 | 79 | 53 | 233 | 116 | 50 |
Sou ce: Company data, Mo gan Stanley Resea ch (E) estimates.
M Idea
Exhibit 9 Consolidated Financial Summa y
Consolidated Income Statement
| NT$mn (Year End Dec 31) | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|
| Net sales | 94,261 | 213,629 | 377,334 | 525,573 |
| COGS | (66,141) | (136,024) | (220,830) | (297,898) |
| Gross profit | 28,120 | 77,605 | 156,504 | 227,675 |
| Operating expenses | (9,012) | (14,722) | (20,006) | (22,212) |
| Operating income | 19,108 | 62,882 | 136,498 | 205,463 |
| Non-operating income | (232) | 145 | 45 | 45 |
| Interest income | (216) | (332) | (355) | (355) |
| Investment income | - | - | - | - |
| Disposal of investment | - | - | - | - |
| Exchange gain | (108) | 69 | - | - |
| Other | 92 | 408 | 400 | 400 |
| Pre-tax income | 18,876 | 63,028 | 136,542 | 205,508 |
| Income tax | (4,231) | (14,207) | (31,245) | (47,363) |
| Minority interests | (4) | (3) | - | - |
| Net income | 14,649 | 48,824 | 105,298 | 158,145 |
| Adj. wtd. Avg. shrs (m) | 352 | 358 | 358 | 358 |
| Reported EPS (NT$) | 41.67 | 136.26 | 293.86 | 441.35 |
| Diluted shrs (m) | 352 | 358 | 358 | 358 |
| Diluted EPS (NT$) | 41.67 | 136.26 | 293.86 | 441.35 |
Consolidated Balance Sheet
| Consolidated Cash Flow Statement | Consolidated Cash Flow Statement | Consolidated Cash Flow Statement | Consolidated Cash Flow Statement | Consolidated Cash Flow Statement |
| NT$mn (Year End Dec 31) | 2025 | 2026E | 2027E | 2028E |
| Operating Cashflow | 11,968 | 22,849 | 67,519 | 125,755 |
| Net Profits | 14,649 | 48,824 | 105,298 | 158,145 |
| Depreciation & Amort. | 1,849 | 1,914 | 3,507 | 4,920 |
| Investment losses/(income) | 0 | 0 | 0 | 0 |
| Working capital change | 51,298 | (26,488) | (39,365) | (35,571) |
| Other adjustments | (55,798) | (1,400) | (1,920) | (1,739) |
| Investing Cashflow | (9,888) | (24,996) | (22,993) | (19,991) |
| Capex | (9,490) | (25,000) | (23,000) | (20,000) |
| Change of L/T investment | 0 | 0 | 0 | 0 |
| Change of S/T investment | 0 | 0 | 0 | 0 |
| Other adjustments | (400) | 0 | 0 | 0 |
| Financing Cashflow | 2,776 | (3,192) | (21,936) | (56,201) |
| Increase in L/T debt | 5,543 | 2,000 | 2,000 | 2,000 |
| Increase in S/T debt | 3,175 | 0 | 0 | 0 |
| Issuance of stock | 0 | (68) | 0 | 0 |
| Cash dividends | (5,894) | (8,958) | (29,194) | (62,961) |
| Other adjustments | (48) | 3,834 | 5,258 | 4,761 |
| FX adjustment | 163 | (69) | 0 | 0 |
| Net change in cash | 5,020 | (5,408) | 22,590 | 49,564 |
2028E NT$mn (Year End Dec 31)
94,261 213,629 377,334 525,573 Operating Cashflow
(297,898) Net Profits
62,882 136,498 205,463 Working capital change
45 Other adjustments
400 Other adjustments
441.35 Other adjustments
| NT$mn (Year End Dec 31) | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|
| Cash | 20,008 | 14,599 | 37,189 | 86,753 |
| Mkt securities | - | - | - | - |
| AR/NR | 36,115 | 81,849 | 144,570 | 201,366 |
| Inventory | 16,752 | 34,451 | 55,930 | 75,449 |
| Others | 1,106 | 2,506 | 4,426 | 6,165 |
| Current Assets | 73,980 | 133,405 | 242,115 | 369,733 |
| Long-term investments | - | - | - | - |
| Fixed assets | 30,864 | 53,947 | 73,433 | 88,504 |
| Other assets | 3,069 | 3,069 | 3,069 | 3,069 |
| Total Assets | 107,913 | 190,421 | 318,618 | 461,306 |
| S/T borrowings | 11,264 | 11,264 | 11,264 | 11,264 |
| AP/NP | 24,518 | 50,422 | 81,859 | 110,427 |
| Other ST liabilities | 10,450 | 21,491 | 34,889 | 47,066 |
| Total Current Liabilities | 46,231 | 83,177 | 128,012 | 168,756 |
| L/T debt | 8,219 | 10,219 | 12,219 | 14,219 |
| Other LT libilities | 3,027 | 6,861 | 12,118 | 16,879 |
| Total Liabilities | 57,477 | 100,257 | 152,350 | 199,855 |
| Common shares | 3,583 | 3,516 | 3,516 | 3,516 |
| Retained Earnings | 30,364 | 70,160 | 146,264 | 241,447 |
| Other SH' Equity | 16,488 | 16,488 | 16,488 | 16,488 |
| Total Shareholders' Equity | 50,435 | 90,164 | 166,268 | 261,451 |
| Total Liab./SH's Equity | 107,913 | 190,421 | 318,618 | 461,306 |
| 2025 | 2026E | 2027E | 2028E | |
|---|---|---|---|---|
| Margins (%) | ||||
| Gross margin | 29.8 | 36.3 | 41.5 | 43.3 |
| Operating margin | 20.3 | 29.4 | 36.2 | 39.1 |
| Pretax margin | 20.0 | 29.5 | 36.2 | 39.1 |
| Net margin | 15.5 | 22.9 | 27.9 | 30.1 |
| YoY growth (%) | ||||
| Sales | 46.4 | 126.6 | 76.6 | 39.3 |
| Operating profits | 57.2 | 229.1 | 117.1 | 50.5 |
| Pretax profits | 55.6 | 233.9 | 116.6 | 50.5 |
| Net profits | 52.9 | 233.3 | 115.7 | 50.2 |
| Others | ||||
| Cash dividend payout (%) | 60% | 60% | 60% | 60% |
| Cash div (NT$) | 25.00 | 81.47 | 175.71 | 263.90 |
| Yield (%) | 0% | 2% | 3% | 5% |
| Net Debt/Equity (%) | -1% | 8% | -8% | -23% |
| Liabilities/Equity (%) | 114% | 111% | 92% | 76% |
| Liabilities/Assets (%) | 53% | 53% | 48% | 43% |
| ROAE (%) | 34% | 69% | 82% | 74% |
| ROAA (%) | 16% | 33% | 41% | 41% |
| AR/NR Turnover (days) | 120 | 101 | 110 | 120 |
| Inventory Turnover (days) | 72 | 69 | 75 | 80 |
| AP/NP Turnover (days) | 112 | 101 | 109 | 118 |
| Cash conversion cycle | 81 | 69 | 75 | 83 |
Consolidated Financial Ratios
Sou ce: Company data, Mo gan Stanley Resea ch (E) estimates.
86,753 Margins (%)
81,849 144,570 201,366 Operating margin
88,504 Operating profits
11,264 Others M Idea
Risk Reward - lite Material Co. (2383.TW) Risk Reward - Elite Material Co. (2383.TW)
Best-in-class CCL supplier; AI driving revenue and margin expansion
NT$8,800.00 PRICE TARGET
Base case, derived from a residual income (RI) model. Key assumptions include a cost of equity of 9.3% (beta of 1.0, equity premium of 8.7% and risk-free rate of 1%), medium-term growth rate of 12%, and terminal growth rate of 3%.
NT$7,761.67
Consensus Price Target Distribution
NT$6,000.00
NT$10,200.00
Source: Refinitiv, Morgan Stanley Research Morgan Stanley Estimates
◆
◆
MS PT
Mean
RISK REWARD CHART
Key: Historical Stock Performance Current Stock Price Price Target
Source: Refinitiv, Morgan Stanley Research
BULL CASE
BASE CASE
31x 2028e P/E
We assume EMC takes share and sees faster material upgrades across all AI platforms.
20x 2028e P/E
EMC continues to grow materially, driven by AI server demand growth and material grade upgrades.
NT$13,650.00
OVERWEIGHT THESIS
- ▪EMC is the global leader in copper-clad laminates, enabling AI systems by providing advanced high-speed, low-loss CCLs.
▪Continued demand growth from AI and
EMC's own capacity expansion support material growth in the coming years.
- ▪Risk-reward is attractive with the stock trading at ~11x CY28e P/E vs 3Y historical range of 8-32x.
Consensus Rating Distribution
Source: Refinitiv, Morgan Stanley Research
Risk Reward Themes
New Data Era:
Pricing Power:
Positive Positive
View descriptions of Risk Rewards Themes here
BEAR CASE
10x 2028e P/E
NT$4,200.00
CPO adoption happens faster than expected, while AI demand weakens and Chinese CCL makers are able to expand more capacity and take share on advanced CCLs.
NT$8,800.00
M Idea
Risk Reward - Elite Material Co. (2383.TW)
KEY EARNINGS INPUTS
| Drivers | Dec 2025 | Dec | 2026eDec 2027eDec | 2028e |
|---|---|---|---|---|
| Server/Switch/LEO Satellite Revenue Contribution (%) | 67.8 | 77.9 | 83.9 | 87.7 |
INVESTMENT DRIVERS
- Monthly revenue
- Suppler share allocation
- CCL content per rack
GLOBAL REVENUE EXPOSURE
Source: Morgan Stanley Research Estimate View explanation of regional hierarchies here
MS ALPHA MODELS
3/5 MOST
3 Month
Horizon
Source: Refinitiv, FactSet, Morgan Stanley Research; 1 is the highest favored Quintile and 5 is the least favored Quintile
RISKS TO PT/RATING
RISKS TO UPSIDE
- Stronger AI demand
- Share gains
- Faster-than-expected material upgrades
- Slower-than-expected CPO adoption
RISKS TO DOWNSIDE
- Weaker AI demand
- Share loss
- Slower-than-expected material upgrades
- Faster-than-expected CPO adoption
OWNERSHIP POSITIONING
Inst. Owners, % Active
66.3%
Source: Refinitiv, Morgan Stanley Research
MS ESTIMATES VS. CONSENSUS
Source: Refinitiv, Morgan Stanley Research M Idea
TUC: arnings stimate Changes
We raise our gross margin and operating margin assumptions for CY26-28 to factor in the margin beat in 3Q26. However, we also revise our tax rate assumptions from 4Q26 onwards to reflect the higher-than-expected tax rate in 3Q26 (31.1% vs. our 25.0% estimate). Our EPS estimates consequently change +3% for CY26, -5% for CY27, and -6% for CY28.
Exhibit 10 Ea nings Estimate Changes
| NT$ mn | 2026e - New | 2026e - Old | 2026e - Variance | 2027e - New | 2027e - Old | 2027e - Variance | 2028e - New | 2028e - Old | 2028e - Variance |
|---|---|---|---|---|---|---|---|---|---|
| Net sales | 62,900 | 64,427 | -2% | 115,890 | 120,406 | -4% | 185,861 | 189,373 | -2% |
| COGS | -41,781 | -44,658 | -6% | -72,963 | -78,252 | -7% | -117,069 | -121,221 | -3% |
| Gross profit | 21,119 | 19,769 | 7% | 42,928 | 42,154 | 2% | 68,792 | 68,152 | 1% |
| Operating expenses | -3,791 | -3,724 | 2% | -5,457 | -5,343 | 2% | -7,264 | -7,102 | 2% |
| Operating income | 17,329 | 16,045 | 8% | 37,471 | 36,811 | 2% | 61,528 | 61,050 | 1% |
| Non-operating income | 168 | 96 | 75% | 105 | -39 | -365% | 105 | -39 | -365% |
| Pre-tax income | 17,496 | 16,141 | 8% | 37,575 | 36,771 | 2% | 61,633 | 61,011 | 1% |
| Income tax | -5,417 | -4,409 | 23% | -11,273 | -9,193 | 23% | -18,490 | -15,253 | 21% |
| Net income | 12,079 | 11,732 | 3% | 26,303 | 27,579 | -5% | 43,143 | 45,758 | -6% |
| EPS (NT$) | 41.36 | 40.17 | 3% | 90.06 | 94.43 | -5% | 147.72 | 156.68 | -6% |
| Margins (%) | ppt | ppt | ppt | ||||||
| Gross margin | 33.6% | 30.7% | 2.9 | 37.0% | 35.0% | 2.0 | 37.0% | 36.0% | 1.0 |
| Operating margin | 27.5% | 24.9% | 2.6 | 32.3% | 30.6% | 1.8 | 33.1% | 32.2% | 0.9 |
| Pre-tax margin | 27.8% | 25.1% | 2.8 | 32.4% | 30.5% | 1.9 | 33.2% | 32.2% | 0.9 |
| Net margin | 19.2% | 18.2% | 1.0 | 22.7% | 22.9% | -0.2 | 23.2% | 24.2% | -1.0 |
Sou ce: Mo gan Stanley Resea ch (E) estimates.
Price target discussion and aluation methodology
Our price target f r TUC decreases ~6%, t NT$2,550, primarily driven by the changes in ur earnings estimates f r CY27-28: This implies 28x CY27e or 17x CY28e P/E. Our price target is also our base case scenario value. It is derived from our residual income (RI) model (similar to the rest of our tech hardware coverage).
To calculate the value of the stock, we use the company's beginning equity plus the present value of all expected residual income of earnings in excess of cost of capital. The RI is positive when ROAE is above the cost of capital and negative when it is below the cost of capital. Our key assumptions (all unchanged) include a cost of equity of 9.3% (beta of 1.0, equity risk premium of 8.7%, and risk-free rate of 1.0%), a medium-term growth rate of 11%, and a terminal growth rate of 3%.
The 17x CY28e P/E implied by our price target is roughly in line with the past three years' average +1SD of 17.8x. We deem this valuation fair because TUC is benefiting from an earnings growth cycle fueled by stronger AI server/networking CC demand, TUC's own mix improvement, and continued pricing adjustments, which should support margin expansion.
Our bull and bear case scenari values als decline ~6%, t NT$3,825 and NT$635, respectively.
M Idea
Exhibit 11 Residual Income (RI) Model
| 2027E | 2028E | 2029E | 2030E | 2031E | 2032E | 2033E | 2034E | 2035E | 2036E | 2037E | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total Equity | 47,123 | 73,968 | 98,430 | 125,583 | 155,723 | 189,178 | 226,313 | 267,533 | 313,287 | 364,074 | 412,494 | |
| Net Profit | 26,303 | 43,143 | 47,889 | 53,157 | 59,004 | 65,494 | 72,698 | 80,695 | 89,572 | 99,425 | 102,407 | |
| Return on Equity | 69.7% | 71.3% | 55.6% | 47.5% | 41.9% | 38.0% | 35.0% | 32.7% | 30.8% | 29.4% | 26.4% | |
| Beta | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 |
| Equity Risk Premium (Rm-Rf) | 8.7% | 8.7% | 8.7% | 8.7% | 8.7% | 8.7% | 8.7% | 8.7% | 8.7% | 8.7% | 8.7% | 8.7% |
| Risk Free Rate (Rf) | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% |
| Cost of Equity | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% |
| Residual Income | 17,107 | 29,194 | 34,212 | 37,555 | 40,998 | 44,653 | 48,600 | 52,904 | 57,624 | 62,822 | 62,149 | |
| Spread | 60.4% | 62.0% | 46.3% | 38.2% | 32.6% | 28.7% | 25.7% | 23.4% | 21.5% | 20.1% | 17.1% | |
| Beginning Equity Capital | 47,123 | |||||||||||
| PV of Forecast Period | 280,347 | |||||||||||
| PV of Continuing Value | 417,151 | |||||||||||
| Equity Value | 744,621 | |||||||||||
| No. of Shares | 292 | |||||||||||
| Projected Price | 2,550 | |||||||||||
| Implied CY27 PE | 28x | |||||||||||
| Implied CY28 PE | 17x |
Sou ce: Mo gan Stanley Resea ch (E) estimates.
Exhibit 12 TUC: P/E cha t
Sou ce: TEJ, Mo gan Stanley Resea ch estimates.
M Idea
Financials
Exhibit 13 Qua te ly Estimates
| 1Q25 | 2Q25 | 3Q25 | 4Q25 | 1Q26 | 2Q26 | 3Q26P | 4Q26E | 2025 | 2026E | 2027E | 2028E | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales | 6,372 | 6,780 | 8,063 | 9,125 | 10,054 | 14,301 | 17,949 | 20,596 | 30,340 | 62,900 | 115,890 | 185,861 |
| COGS | (4,839) | (5,345) | (6,148) | (7,110) | (7,525) | (10,051) | (11,321) | (12,883) | (23,442) | (41,781) | (72,963) | (117,069) |
| Gross profit | 1,533 | 1,435 | 1,915 | 2,015 | 2,529 | 4,250 | 6,628 | 7,713 | 6,898 | 21,119 | 42,928 | 68,792 |
| Operating expenses | (598) | (583) | (649) | (725) | (701) | (892) | (1,060) | (1,138) | (2,554) | (3,791) | (5,457) | (7,264) |
| SG&A | (469) | (457) | (513) | (601) | (606) | (773) | (936) | (1,011) | (2,040) | (3,327) | (4,920) | (6,666) |
| R&D | (128) | (126) | (136) | (124) | (95) | (118) | (124) | (127) | (514) | (464) | (537) | (597) |
| Operating income | 935 | 853 | 1,266 | 1,290 | 1,828 | 3,358 | 5,568 | 6,575 | 4,344 | 17,329 | 37,471 | 61,528 |
| Non-operating income | (1) | (13) | 52 | 136 | 46 | 69 | 26 | 26 | 175 | 168 | 105 | 105 |
| Interest income | 17 | 16 | 3 | 5 | (7) | (10) | (10) | (10) | 42 | (36) | (39) | (39) |
| Investment income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Disposal of investment | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Exchange gain | 27 | (169) | 110 | 127 | 46 | 75 | 0 | 0 | 95 | 120 | 0 | 0 |
| Other | (45) | 140 | (61) | 5 | 7 | 4 | 36 | 36 | 38 | 83 | 144 | 144 |
| Pre-tax income | 935 | 840 | 1,318 | 1,427 | 1,874 | 3,427 | 5,594 | 6,601 | 4,519 | 17,496 | 37,575 | 61,633 |
| Income tax | (263) | (188) | (315) | (344) | (614) | (1,085) | (1,738) | (1,980) | (1,109) | (5,417) | (11,273) | (18,490) |
| Minority interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Net income | 672 | 652 | 1,003 | 1,083 | 1,260 | 2,342 | 3,857 | 4,621 | 3,409 | 12,079 | 26,303 | 43,143 |
| Adj.wtd.avg.shrs (mn) | 276 | 276 | 280 | 281 | 289 | 292 | 292 | 292 | 281 | 292 | 292 | 292 |
| EPS | 2.43 | 2.36 | 3.58 | 3.85 | 4.36 | 8.02 | 13.21 | 15.82 | 12.12 | 41.36 | 90.06 | 147.72 |
| Fully Diluted shares (mn) | 276 | 276 | 280 | 281 | 289 | 292 | 292 | 292 | 281 | 292 | 292 | 292 |
| Diluted EPS (NT$) | 2.43 | 2.36 | 3.58 | 3.85 | 4.36 | 8.02 | 13.21 | 15.82 | 12.12 | 41.36 | 90.06 | 147.72 |
| Margins (%) | ||||||||||||
| Gross Margin | 24.1 | 21.2 | 23.7 | 22.1 | 25.1 | 29.7 | 36.9 | 37.4 | 22.7 | 33.6 | 37.0 | 37.0 |
| Operating Margin | 14.7 | 12.6 | 15.7 | 14.1 | 18.2 | 23.5 | 31.0 | 31.9 | 14.3 | 27.5 | 32.3 | 33.1 |
| Pretax Margin | 14.7 | 12.4 | 16.3 | 15.6 | 18.6 | 24.0 | 31.2 | 32.1 | 14.9 | 27.8 | 32.4 | 33.2 |
| Net Margin | 10.5 | 9.6 | 12.4 | 11.9 | 12.5 | 16.4 | 21.5 | 22.4 | 11.2 | 19.2 | 22.7 | 23.2 |
| QoQ Growth (%) | ||||||||||||
| Sales | 1 | 6 | 19 | 13 | 10 | 42 | 26 | 15 | ||||
| Gross Profit | 5 | -6 | 33 | 5 | 26 | 68 | 56 | 16 | ||||
| Operating Profit | 0 | -9 | 48 | 2 | 42 | 84 | 66 | 18 | ||||
| Pretax Profit | -1 | -10 | 57 | 8 | 31 | 83 | 63 | 18 | ||||
| Net Profit | -5 | -3 | 54 | 8 | 16 | 86 | 65 | 20 | ||||
| YoY Growth (%) | ||||||||||||
| Sales | 44 | 19 | 22 | 45 | 58 | 111 | 123 | 126 | 32 | 107 | 84 | 60 |
| Gross Profit | 51 | 5 | 27 | 38 | 65 | 196 | 246 | 283 | 29 | 206 | 103 | 60 |
| Operating Profit | 66 | -2 | 31 | 38 | 95 | 294 | 340 | 410 | 30 | 299 | 116 | 64 |
| Pretax Profit | 56 | -4 | 37 | 52 | 100 | 308 | 325 | 363 | 34 | 287 | 115 | 64 |
| Net Profit | 49 | -6 | 33 | 54 | 88 | 259 | 285 | 327 | 31 | 254 | 118 | 64 |
Sou ce: Company data, Mo gan Stanley Resea ch (E) estimates.
M Idea
Exhibit 14 Consolidated Financial Summa y
Consolidated Income Statement
| NT$mn (Year End Dec 31) | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|
| Net sales | 30,340 | 62,900 | 115,890 | 185,861 |
| COGS | (23,442) | (41,781) | (72,963) | (117,069) |
| Gross profit | 6,898 | 21,119 | 42,928 | 68,792 |
| Operating expenses | (2,554) | (3,791) | (5,457) | (7,264) |
| Operating income | 4,344 | 17,329 | 37,471 | 61,528 |
| Non-operating income | 175 | 168 | 105 | 105 |
| Interest income | 42 | (36) | (39) | (39) |
| Investment income | - | - | - | - |
| Disposal of investment | - | - | - | - |
| Exchange gain | 95 | 120 | - | - |
| Other | 38 | 83 | 144 | 144 |
| Pre-tax income | 4,519 | 17,496 | 37,575 | 61,633 |
| Income tax | (1,109) | (5,417) | (11,273) | (18,490) |
| Minority interests | - | - | - | - |
| Net income | 3,409 | 12,079 | 26,303 | 43,143 |
| Adj. wtd. Avg. shrs (m) | 281 | 292 | 292 | 292 |
| Reported EPS (NT$) | 12.12 | 41.36 | 90.06 | 147.72 |
| Diluted shrs (m) | 281 | 292 | 292 | 292 |
| Diluted EPS (NT$) | 12.12 | 41.36 | 90.06 | 147.72 |
Consolidated Balance Sheet
| Consolidated Cash Flow Statement | Consolidated Cash Flow Statement | Consolidated Cash Flow Statement | Consolidated Cash Flow Statement | Consolidated Cash Flow Statement |
| NT$mn (Year End Dec 31) | 2025 | 2026E | 2027E | 2028E |
| Operating Cashflow | 596 | 1,115 | 8,587 | 20,313 |
| Net Profits | 3,409 | 12,079 | 26,303 | 43,143 |
| Depreciation & Amort. | 459 | 459 | 586 | 702 |
| Investment losses/(income) | 0 | 0 | 0 | 0 |
| Working capital change | 18,399 | (10,864) | (17,392) | (22,330) |
| Other adjustments | (21,634) | (559) | (910) | (1,202) |
| Investing Cashflow | (6,502) | (1,999) | (1,998) | (1,996) |
| Capex | (1,949) | (2,000) | (2,000) | (2,000) |
| Change of L/T investment | 0 | 0 | 0 | 0 |
| Change of S/T investment | (26) | 0 | 0 | 0 |
| Other adjustments | (4,528) | 0 | 0 | 0 |
| Financing Cashflow | 4,888 | 1,933 | (711) | (7,387) |
| Increase in L/T debt | 5,381 | 100 | 100 | 100 |
| Increase in S/T debt | 1,275 | 0 | 0 | 0 |
| Issuance of stock | 0 | (74) | 0 | 0 |
| Cash dividends | (1,797) | (2,193) | (7,485) | (16,298) |
| Other adjustments | 30 | 4,100 | 6,673 | 8,812 |
| FX adjustment | (97) | (120) | 0 | 0 |
| Net change in cash | (1,115) | 929 | 5,878 | 10,930 |
2028E NT$mn (Year End Dec 31)
185,861 Operating Cashflow
(117,069) Net Profits
61,528 Working capital change
105 Other adjustments
144 Other adjustments
147.72 Other adjustments
| NT$mn (Year End Dec 31) | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|
| Cash | 5,165 | 6,094 | 11,971 | 22,902 |
| Mkt securities | 5,437 | 5,437 | 5,437 | 5,437 |
| AR/NR | 13,823 | 28,657 | 52,799 | 84,677 |
| Inventory | 7,405 | 13,197 | 23,047 | 36,979 |
| Others | 521 | 1,080 | 1,990 | 3,192 |
| Current Assets | 32,351 | 54,465 | 95,245 | 153,188 |
| Long-term investments | 4 | 4 | 4 | 4 |
| Fixed assets | 5,565 | 7,105 | 8,517 | 9,810 |
| Other assets | 1,820 | 1,820 | 1,820 | 1,820 |
| Total Assets | 39,741 | 63,395 | 105,586 | 164,823 |
| S/T borrowings | 2,141 | 2,141 | 2,141 | 2,141 |
| AP/NP | 10,320 | 18,392 | 32,119 | 51,535 |
| Other ST liabilities | 2,160 | 3,850 | 6,723 | 10,786 |
| Total Current Liabilities | 14,621 | 24,383 | 40,983 | 64,463 |
| L/T debt | 2,686 | 2,786 | 2,886 | 2,986 |
| Other LT libilities | 3,821 | 7,921 | 14,595 | 23,406 |
| Total Liabilities | 21,127 | 35,090 | 58,463 | 90,855 |
| Common shares | 2,887 | 2,813 | 2,813 | 2,813 |
| Retained Earnings | 8,285 | 18,050 | 36,868 | 63,713 |
| Other SH' Equity | 7,442 | 7,442 | 7,442 | 7,442 |
| Total Shareholders' Equity | 18,614 | 28,305 | 47,123 | 73,968 |
| Total Liab./SH's Equity | 39,741 | 63,395 | 105,586 | 164,823 |
| 2025 | 2026E | 2027E | 2028E | |
|---|---|---|---|---|
| Margins (%) | ||||
| Gross margin | 22.7 | 33.6 | 37.0 | 37.0 |
| Operating margin | 14.3 | 27.5 | 32.3 | 33.1 |
| Pretax margin | 14.9 | 27.8 | 32.4 | 33.2 |
| Net margin | 11.2 | 19.2 | 22.7 | 23.2 |
| YoY growth (%) | ||||
| Sales | 31.5 | 107.3 | 84.2 | 60.4 |
| Operating profits | 30.4 | 298.9 | 116.2 | 64.2 |
| Pretax profits | 33.8 | 287.2 | 114.8 | 64.0 |
| Net profits | 30.9 | 254.3 | 117.8 | 64.0 |
| Others | ||||
| Cash dividend payout (%) | 62% | 62% | 62% | 62% |
| Cash div (NT$) | 7.51 | 25.63 | 55.81 | 91.54 |
| Yield (%) | 1% | 2% | 4% | 7% |
| Net Debt/Equity (%) | -31% | -23% | -26% | -31% |
| Liabilities/Equity (%) | 114% | 124% | 124% | 123% |
| Liabilities/Assets (%) | 53% | 55% | 55% | 55% |
| ROAE (%) | 21% | 51% | 70% | 71% |
| ROAA (%) | 10% | 23% | 31% | 32% |
| AR/NR Turnover (days) | 142 | 123 | 128 | 135 |
| Inventory Turnover (days) | 82 | 90 | 91 | 94 |
| AP/NP Turnover (days) | 123 | 125 | 126 | 130 |
| Cash conversion cycle | 101 | 88 | 93 | 98 |
Consolidated Financial Ratios
Sou ce: Company data, Mo gan Stanley Resea ch (E) estimates.
22,902 Margins (%)
5,437 Gross margin
84,677 Operating margin
9,810 Operating profits
2,141 Others M Idea
Risk Reward - Taiwan Union Technology Corporation Risk Reward - Taiwan Union Technology Corporation (6274.TWO)
(6274.TWO) Scarcity Value in High-End CCL
NT$2,550.00 PRICE TARGET
Base case, derived from a residual income (RI) model. Key assumptions include a cost of equity of 9.3% (beta of 1.0, equity premium of 8.7% and risk-free rate of 1%), medium-term growth rate of 11%, and terminal growth rate of 3%.
NT$2,305.42
Key: Historical Stock Performance Current Stock Price Price Target
Source: Refinitiv, Morgan Stanley Research
BULL CASE
BASE CASE
OVERWEIGHT THESIS
- ▪TUC is one of the few high-end suppliers of copper-clad laminates whose M7/M8+ CCLs enable AI servers and 800G/1.6T switches.
- ▪Continued demand growth from AI infrastructure build-out and LEO satellites should support continued mix improvement and earnings growth.
- ▪Tight supply-demand conditions in the high-end CCL market further add to TUC's pricing power.
- ▪Risk-reward is attractive with the stock trading at ~9x CY28e P/E vs the three-year historical range of 6-27x.
Consensus Rating Distribution
MS Rating
Source: Refinitiv, Morgan Stanley Research
Risk Reward Themes
New Data Era:
Positive
Pricing Power:
Positive
View descriptions of Risk Rewards Themes here
BEAR CASE
26x CY28e P/E
In this scenario, we assume high-end servers and switches show significantly stronger growth in 2027-28, driven by faster-thanexpected new data center build-outs and a smooth ramp of new generations of AI/networking chips. We also assume CCL demand from key satellite and power supply customers will be stronger than expected. In addition, we assume a new CSP ASIC customer win for TUC, which will start contributing to sales from 2027 onwards.
17x CY28e P/E
TUC continues to grow materially, driven by AI ASIC server, power supply and LEO satellite demand growth, and material CCL upgrades.
4.3x CY28e P/E
In this scenario, we assume high-end servers and switches see sluggish demand in 202728, because of slower-than-expected new data center build-outs and significant delays in new generations of AI/networking chips; we also assume CCL demand from key satellite customer and power supply customer will become stagnant in the near to medium term. In addition, we assume no new CSP customer win and share loss in AWS Trainium project for TUC.
NT$635.00
NT$3,825.00
NT$2,550.00
M Idea
Risk Reward - Taiwan Union Technology Corporation (6274.TWO)
KEY EARNINGS INPUTS
Drivers
Extreme LL & Super LL Revenue Contribution (%)
Dec 2025 Dec 2026eDec 2027eDec 2028e
35.9
37.9
38.4
42.6
INVESTMENT DRIVERS
- Monthly revenue
- Suppler share allocation
- CCL content per server rack/switch
GLOBAL REVENUE EXPOSURE
Source: Morgan Stanley Research Estimate View explanation of regional hierarchies here
MS ALPHA MODELS
3/5 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
- Stronger AI demand
- Share gains
- Faster-than-expected material upgrades
- Slower-than-expected CPO adoption
RISKS TO DOWNSIDE
- Weaker AI demand
- Share loss
- Slower-than-expected material upgrades
- Faster-than-expected CPO adoption
OWNERSHIP POSITIONING
Inst. Owners, % Active
67.5%
Source: Refinitiv, Morgan Stanley Research
MS ESTIMATES VS. CONSENSUS
Source: Refinitiv, Morgan Stanley Research M Idea
Risk Reward Reference links
- View explanation of Options Probabilities methodology -
Options_Probabilities_Exhibit_ ink.pdf
- View descriptions of Risk Rewards Themes - RR_Themes_Exhibit_ ink.pdf
-
View explanation of regional hierarchies - GEG_Exhibit_ ink.pdf
-
View explanation of Theme/Exposure methodology -
ESG_Sustainable_Solutions_External_ ink.pdf
- View explanation of HERS methodology - ESG_HERS_External_ ink.pdf
M Idea
INDUSTRY COVERAGE: Greater China Technology Hardware
Company (Ticker)
M Idea M Idea Stock Ratings a e subject to change. Please see latest esea ch fo each company.
| Andy Meng, CFA | ||
|---|---|---|
| AAC Technologies Holdings (20 8.HK) | O (0 /29/2024) | HK$38.82 |
| Accelink Technologies Co. Ltd. (00228 .SZ) | U (05/ 2/2022) | Rmb 23.60 |
| BYD Electronics (0285.HK) | O (04/28/2023) | HK$22.54 |
| China TransInfo Technology Co Ltd (002373.SZ) | E (07/ 8/2023) | Rmb8.00 |
| Dahua Technology Co. Ltd. (002236.SZ) | E ( 2/ 2/2024) | Rmb 4.47 |
| Eoptolink Technology Inc Ltd (300502.SZ) | O (02/27/2026) | Rmb256.79 |
| Genius Electronic Optical Co. Ltd. (3406.TW) | E ( 0/ 3/2026) | NT$ ,330.00 |
| GoerTek Inc (00224 .SZ) | E (08/ 4/2026) | Rmb23.20 |
| Gosuncn Technology Group Co Ltd (300098.SZ) | U ( /07/2022) | Rmb4.24 |
| HIKVision Digital Technology (0024 5.SZ) | E ( 2/ 2/2024) | Rmb34. 5 |
| Largan Precision (3008.TW) | O ( 0/ 3/2026) | NT$6,335.00 |
| LianChuang Electronic Technology Co Ltd (002036.SZ) | U (06/ 2/2024) | Rmb5.67 |
| Lingyi Itech Guangdong Co (002600.SZ) | U (04/23/2025) | Rmb .69 |
| Lingyi Itech Guangdong Co ( 688.HK) | O (08/ 4/2026) | HK$5.03 |
| Luxshare Precision Industry Co., Ltd. (2475.HK) | O (08/ 4/2026) | HK$49.86 |
| Luxshare Precision Industry Co., Ltd. (002475.SZ) | O ( 0/24/20 6) | Rmb49.70 |
| OFILM Group Co Ltd (002456.SZ) | U (06/ 2/2024) | Rmb6.30 |
| Q Technology (Group) Company Ltd ( 478.HK) | U (03/23/2026) | HK$4.78 |
| Quectel Wireless Solutions Co Ltd (603236.SS) | E ( 0/09/2024) | Rmb7 .46 |
| Shanghai Conant Optical Co Ltd (2276.HK) | O (04/ 0/2026) | HK$34.60 |
| Shenzhen Transsion Holdings Co Ltd (688036.SS) | E (03/23/2026) | Rmb54.4 |
| Sunny Optical (2382.HK) | E (03/23/2026) | HK$65.80 |
| Suzhou TFC Optical Communication Co Ltd. (300394.SZ) | E ( /06/2025) | Rmb20 .43 |
| Wingtech Technology Co Ltd (600745.SS) | U (05/ 8/2026) | Rmb 0.42 |
| Xiaomi Corp ( 8 0.HK) | O (04/ 4/202 ) | HK$25.62 |
| Yangtze Optical Fibre and Cable JSC Ltd (60 869.SS) | U ( 0/ 3/202 ) | Rmb300.35 |
| Yangtze Optical Fibre and Cable JSC Ltd (6869.HK) Yongxin Optics Co Ltd (603297.SS) | O (07/ 5/2026) E ( / 5/2022) | HK$ .60 Rmb99. 7 |
| Zhejiang Crystal-Optech Co Ltd (002273.SZ) | O ( / 5/2022) | Rmb22.94 |
| Zhongji Innolight Co Ltd (300308.SZ) | O (09/07/2026) | Rmb636.30 |
| Zhongji Innolight Co Ltd (3308.HK) | O (09/07/2026) | HK$785.00 |
| ZTE Corporation (0763.HK) | O (06/04/2026) | HK$20.28 |
| ZTE Corporation (000063.SZ) Derrick Yang | E (06/04/2026) | Rmb28.20 |
| Accton Technology Corporation (2345.TW) | O (06/06/2024) | NT$ ,8 5.00 |
| Advantech (2395.TW) | O (0 /20/202 ) | NT$689.00 |
| AirTAC International ( 590.TW) | O (04/ 6/2025) | NT$ , 40.00 |
| Asia Vital Components Co. Ltd. (30 7.TW) | O (07/30/2024) | NT$3,2 5.00 |
| AU Optronics (2409.TW) | E (02/ 0/2026) | NT$35.55 |
| Auras Technology Co Ltd (3324.TWO) | E (05/04/2023) | NT$ ,435.00 |
| Bizlink (3665.TW) | O (03/ 0/2025) | NT$ ,8 0.00 |
| BOE Technology (000725.SZ) | O (09/06/20 9) | Rmb4.83 |
| Chenbro (82 0.TW) | O (07/23/2025) | NT$78 .00 |
| Chroma Ate Inc. (2360.TW) | O ( 0/05/202 ) | NT$2,035.00 |
| Delta Electronics Inc. (2308.TW) | O (07/ 3/20 7) | NT$ ,550.00 |
| E Ink Holdings Inc. (8069.TWO) | E (08/ 0/2026) | NT$ 56.00 |
| Ennostar Inc (37 4.TW) | U (09/23/2022) | NT$64.60 |
| Fositek Corp (6805.TW) | O (06/25/2025) | NT$2,460.00 |
| Hiwin Technologies Corp. (2049.TW) | O (03/30/2026) | NT$343.50 |
| Innolux (348 .TW) King Slide Works Co. Ltd. (2059.TW) | E (04/07/2025) O ( /08/2023) | NT$48.45 NT$ 0, 50.00 |
| E (07/22/2020) | Rmb27.97 | |
| Lens Technology (300433.SZ) Lite-On Technology (230 .TW) | E (0 / 5/2025) | NT$26 .50 |
| TCL Corp. (000 00.SZ) | E (04/07/2025) | Rmb4.5 |
| Tianma Microelectronics (000050.SZ) | U (0 /24/20 8) | Rmb5.76 |
|---|---|---|
| Howard Kao | ||
| Acer Inc. (2353.TW) | U (04/23/2025) | NT$32.70 |
| Asustek Computer Inc. (2357.TW) | U ( / 6/2025) | NT$988.00 |
| Catcher Technology (2474.TW) | U ( / 7/2025) | NT$ 99.00 |
| Compal Electronics (2324.TW) | U (04/23/2025) | NT$37.95 |
| Elite Material Co. (2383.TW) | O (09/ 4/2026) | NT$5,025.00 |
| FIT Hon Teng Ltd (6088.HK) | O ( /03/2025) | HK$3.72 |
| Foxconn Industrial Internet Co. Ltd. (60 38.SS) | O (07/ 0/20 9) | Rmb48.64 |
| Giga-Byte Technology Co. Ltd. (2376.TW) | E ( / 6/2025) | NT$362.50 |
| Gold Circuit Electronics Ltd. (2368.TW) | O ( 0/06/2022) | NT$ , 85.00 |
| Hon Hai Precision (23 7.TW) | O (03/ 5/2024) | NT$25 .50 |
| Inspur Electronic Information (000977.SZ) | E (08/28/2023) | Rmb56.03 |
| Kingboard Laminates Holdings Ltd. ( 888.HK) | O (09/ 4/2026) | HK$40.30 |
| LandMark Optoelectronics Corporation (308 .TWO) | E (03/26/2026) | NT$2,580.00 |
| Lenovo (0992.HK) | O (07/ 0/2026) | HK$23.78 |
| Lotes Co. Ltd. (3533.TW) | O ( 0/27/2026) | NT$ ,955.00 |
| Nan Ya PCB (8046.TW) | O (02/23/2026) | NT$ ,300.00 |
| Pegatron Corporation (4938.TW) | E (03/25/2026) | NT$ 08.00 |
| Quanta Computer Inc. (2382.TW) | O (05/0 /2023) | NT$330.00 |
| Shengyi Technology Co Ltd. (600 83.SS) | E (05/26/2022) | Rmb 02.49 |
| Shennan Circuits Co Ltd (0029 6.SZ) | E (08/24/2023) | Rmb280.04 |
| Unimicron (3037.TW) | O (02/23/2026) | NT$ , 00.00 |
| Visual Photonics Epitaxy Co Ltd (2455.TW) | E (09/ /2023) | NT$5 2.00 |
| Wistron Corporation (323 .TW) | O (07/ 2/2023) | NT$ 94.50 |
| Wiwynn Corp (6669.TW) | O ( / 0/2025) | NT$ ,950.00 |
| Yageo Corp. (2327.TW) | O ( 0/28/2025) | NT$547.00 |
| Zhen Ding (4958.TW) | ++ | NT$550.00 |
| Irene Yen | ||
| Co-Tech Development Corp. (8358.TWO) | O (09/ 4/2026) | NT$460.00 |
| Taiwan Union Technology Corporation (6274.TWO) | O (09/ 4/2026) | NT$ ,375.00 |
- Histo ical p ices a e not split adjusted.
© 2026 Morgan Stanley
圖片清單（已驗證 2026-10-29）
| 檔名 | size | 分類 | 親眼所見內容 |
|---|---|---|---|
| 報告_MS_台灣CCL產業_3Q26_20261028_005.png | 49KB | 真資料圖 | 台燿 Risk Reward 圖：共識目標價分布 NT$1,600–3,010（均值約 NT$2,305）、MS PT NT$2,550；風險報酬圖現價約 NT$1,375，Bull NT$3,825（+178%）、Base NT$2,550（+85%）、Bear NT$635（-54%），期間 Oct 25 至 Oct 27 |
其餘 001–004、006–008 皆 <40KB，未逐張 Read，免列。