PDF 原檔：報告_MS_嘉澤3533_20261027_original.pdf
原始內容
| Morgan Stanley Taiwan Limited+ Howard Kao Equity Analyst H ward.Ka @m rganstanley.c m | +886 2 2730-2989 |
|---|---|
| Irene Yen Equity Analyst Irene.Yen@m rganstanley.c m | +886 2 2730-2869 |
| Morgan Stanley Asia Limited+ Andy Meng, CFA Equity Analyst Andy.Meng@m rganstanley.c m | +852 2239-7689 |
Morgan Stanley appreciates your support in the 2027 Extel Asia Research Survey. Voting opens 10 Novem er 2026.
Lotes Co. Ltd.(3533.TW, 3533 TT)
Greater China Technology Hardware | Taiwan
| Stock ating - Industry View | Overweight | Overweight - In-Line | ||
|---|---|---|---|---|
| Price target | Price target | NT$2,350.00 | ||
| Up downside to price target (%) | Up downside to price target (%) | 31 | ||
| Shr price, close (Oct 22, 2026) | Shr price, close (Oct 22, 2026) | NT$1,795.00 | ||
| 52-Week Range | 52-Week Range | NT$2,955.00- | ||
| 1,140.00 | ||||
| Sh out, dil, curr (mn) | Sh out, dil, curr (mn) | 105 | ||
| Mkt cap, curr (mn) Avg daily trading value | (mn) | NT$188,088 NT$174,852 NT$2,639 | ||
| EV, curr (mn) Fiscal Year Ending EPS (NT$)** | 12/25 | 12/26e | 12/2 e 106.88 | 12/27e 142.26 |
| Prior EPS | 70.18 | 79.63 | ||
| (NT$)** | - | 82.77102.51125.94 | ||
| EPS (NT$)§ | 68.94 | 81.15 | 114.13 | 142.08 |
| Revenue, net (NT$ mn) | 33,783 | 39,271 | 47,293 | 57,352 |
| EBITDA (NT$ mn) | 12,955 | 12,683 | 16,879 | 21,749 |
| ModelWare net inc (NT | 7,866 | 8,925 | 11,979 | 15,945 |
| $ mn) P E | 18.5 | 22.5 | 16.8 | 12.6 |
| P BV | 3.6 | 4.4 | 3.8 | 3.2 |
| RNOA (%) | 37.7 | 29.7 | 42.8 | 54.6 |
| ROE (%) | 20.7 | 22.1 | 26.3 | 30.0 |
| EV EBITDA | 10.2 | 13.4 | 9.7 | 7.2 |
| Div yld (%) | 3.3 | 1.9 | 2.2 | 3.0 |
| FCF yld ratio (%)** | 2.1 | 4.5 | 5.2 | 6.8 |
| Leverage (EOP) (%) | (32.8) | (40.6) | (46.1) | (51.1) |
Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare framework
- ** = Based on consensus methodology
- § = Consensus data is provided by Refinitiv Estimates
- 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.
M Idea October 27, 2026 12:56 AM GMT
Lotes Co. Ltd. | Asia Pacific
Margins to trough in 3Q; Upgrade to OW
| What's Changed | ||
|---|---|---|
| Lotes Co. Ltd. (3533.TW) Rating | From Equal-weight | To Overweight |
| Price Target | NT$2,045.00 | NT$2,350.00 |
We look beyond near-term cost pressures to margin recovery from 4Q as ne CPU platforms enable better cost pass-through. AI products such as QD, SOCAMM and NPO should lift the AI revenue mix to >20% by 2028, supporting earnings gro th and re-rating.
3Q GM likely to decline on higher costs and slower new product adoption…
Lotes reported unaudited 3Q26 revenue of NT$9,924M (+4% q/q, + 8% y/y). Higher copper, gold and plastics costs for legacy products, coupled with slower new product adoption, should continue to pressure GM. We forecast 3Q GM of 44.6% (- 90bps q/q), below consensus of 45.8% (+30bps q/q). However, a decline in opex to NT$2.0B, consistent with management commentary, should support operating profit growth of 7% q/q to NT$2,452M, albeit still 6% below consensus. We forecast NP of NT$2, 74M (+ 0% q/q) and EPS of NT$ 9.36, 4% below the Street.
…but we see 3Q as the GM trough, with recovery beginning in Q: Following slower server platform transitions, we expect adoption to accelerate from 4Q26. Socket production for AMD's Venice CPU will ramp from 4Q26 and socket production for Intel's Oak Stream CPU will ramp in Q27. These transitions should enable Lotes to reprice products and pass through higher input costs, supporting margin recovery. Our industry checks also point to a rebound in ODM server board production in 4Q, following a modest 3Q decline. We forecast 4Q revenue of ~NT $ 0.5B (+5% q/q), GM of 45.9% (+ 30bps q/q) and EPS of NT$2 . (+9% q/q).
2027 - margin recovery and new AI product ramps should drive earnings growth:
Rising adoption of new CPU platforms should support socket margin recovery, alongside growing contributions from QD, SOCAMM and NPO. QD reached 2-3% of revenue in September, with further growth expected in 4Q26 and 2027, and we forecast SOCAMM will reach ~7% of revenue in CY27. Lotes has two NPO opportunities, one through LINTES and another directly, with the direct program expected to ramp in 2H27. Although initial contributions should remain modest, we see NPO as a longer-term AI data center growth opportunity and a potential rerating catalyst. Overall, we see the AI revenue mix, including QD, SOCAMM and NPO, rising from ~5% in CY25 to slightly above 20% by CY28.
Upgrade to OW and raise PT by 15% to NT$2,350, driven by our estimate increases for CY27-28. Our new PT implies 22x 2027e P/E and 6.5x 2028e P/E, above the past 3-year average of 7.4x, which we view as reasonable amid a rising AI revenue mix.
M Idea
AlphaSignals Earnings Preview
Focus KPI
Focus KPI Surprise Likely impact to consensus EPS*
Lotes Co. Ltd. 3533.TW
3Q GM
Likely downside surprise Modest revision lower
- ·We think rising costs and slower new product adoption rate will continue to weigh on GM
*Likely impact to consensus EPS is for the next 12 months
Source: Company data, Morgan Stanley Research M Idea
3Q26 Results Previe
3Q26 preview: We forecast revenue of NT$9.92B (+4% q/q, + 8% y/y), broadly in line with the Street. Although gross margin should decline 80bps q/q to 44.6%, a 2% sequential reduction in operating expenses should lift operating margin 270bps q/q to 24.7%. Nevertheless, this remains 30bps below consensus, implying operating profit of NT$2.45bn, 6% below the Street. We therefore see potential for an earnings miss, as we estimate net profit of ~NT$2, 74M (+ 0% q/q, -6% y/y), for EPS of NT$ 9.36, 4% below the Street.
Exhibit 1: 3Q26 Results Preview
| NT$mn | 3Q26E Results - MS Est. | 3Q26E Results - QoQ | 3Q26E Results - YoY | Cons | Var. |
|---|---|---|---|---|---|
| Net sales | 9,924 | 4% | 18% | 9,978 | -1% |
| COGS | -5,493 | 5% | 34% | -5,411 | 2% |
| Gross profit | 4,431 | 2% | 3% | 4,567 | -3% |
| Operating expenses | -1,979 | -12% | 11% | -1,969 | 0% |
| Operating income | 2,452 | 17% | -3% | 2,598 | -6% |
| Non-operating income | 245 | -50% | -31% | 263 | -7% |
| Pre-tax income | 2,697 | 4% | -6% | 2,861 | -6% |
| Income tax | -506 | -19% | -10% | -605 | -16% |
| Net income | 2,174 | 10% | -6% | 2,257 | -4% |
| EPS (NT$) | 19.36 | 10% | -7% | 20.12 | -4% |
| Margins (%) | ppt | ppt | ppt | ||
| Gross margin | 44.6% | -0.8 | -6.6 | 45.8% | -1.1 |
| Operating margin | 24.7% | 2.7 | -5.3 | 26.0% | -1.3 |
| Pre-tax margin | 27.2% | 0.0 | -7.0 | 28.7% | -1.5 |
| Net margin | 21.9% | 1.2 | -5.6 | 22.6% | -0.7 |
S urce: C mpany data, Visible Alpha, M rgan Stanley Research estimates.
AI revenue mix - a sharp step-up in 2027 should strengthen the structural growth
story: We forecast AI revenue contribution will rise from ~5% in CY25 to slightly above 20% by CY28, with the largest increase occurring in 2027. Rising adoption of QD and SOCAMM connectors should drive the initial acceleration, while NPO sockets provide an additional growth opportunity, with small-volume contributions expected in 2027 and larger volumes in 2028. We believe this expanding AI exposure, alongside expected margin recovery in CPU sockets, should strengthen Lotes' earnings growth profile and support a potential valuation re-rating as investors look beyond near-term cost pressures.
M Idea
Exhibit 2: We f recast AI revenue mix will rise fr m ~5% in CY25 t ~20% by CY28
S urce: M rgan Stanley Research (E) estimates.
M Idea
Estimate Changes
Exhibit 3: L tes: 2026-28 estimate changes
| NT$ mn | 2026e - New | 2026e - Old | 2026e - Variance | 2027e - New | 2027e - Old | 2027e - Variance | 2028e - New | 2028e - Old | 2028e - Variance |
|---|---|---|---|---|---|---|---|---|---|
| Net sales | 39,271 | 38,305 | 3% | 47,293 | 43,197 | 9% | 57,352 | 50,829 | 13% |
| COGS | -21,075 | -20,329 | 4% | -24,408 | -22,232 | 10% | -28,973 | -25,913 | 12% |
| Gross profit | 18,197 | 17,976 | 1% | 22,885 | 20,965 | 9% | 28,379 | 24,916 | 14% |
| Operating expenses | -8,123 | -8,017 | 1% | -8,388 | -8,200 | 2% | -8,825 | -8,811 | 0% |
| Operating income | 10,073 | 9,960 | 1% | 14,497 | 12,766 | 14% | 19,554 | 16,105 | 21% |
| Non-operating income | 1,282 | 1,778 | -28% | 986 | 1,979 | -50% | 986 | 1,979 | -50% |
| Pre-tax income | 11,355 | 11,738 | -3% | 15,483 | 14,745 | 5% | 20,540 | 18,084 | 14% |
| Income tax | -2,371 | -2,576 | -8% | -3,434 | -3,272 | 5% | -4,525 | -3,985 | 14% |
| Net income | 8,925 | 9,277 | -4% | 11,979 | 11,490 | 4% | 15,945 | 14,116 | 13% |
| EPS (NT$) | 79.63 | 82.77 | -4% | 106.88 | 102.51 | 4% | 142.26 | 125.94 | 13% |
| Margins (%) | ppt | ppt | ppt | ||||||
| Gross margin | 46.3% | 46.9% | -0.6 | 48.4% | 48.5% | -0.1 | 49.5% | 49.0% | 0.5 |
| Operating margin | 25.7% | 26.0% | -0.4 | 30.7% | 29.6% | 1.1 | 34.1% | 31.7% | 2.4 |
| Pre-tax margin | 28.9% | 30.6% | -1.7 | 32.7% | 34.1% | -1.4 | 35.8% | 35.6% | 0.2 |
| Net margin | 22.7% | 24.2% | -1.5 | 25.3% | 26.6% | -1.3 | 27.8% | 27.8% | 0.0 |
S urce: M rgan Stanley Research (e) estimates.
We adjust our model to reflect unaudited 3Q26 revenue and our latest supply chain checks. This leads us to lower our CY26 EPS estimate by 4% but raise CY27 by 4% and CY28 by 3%.
Where are we vs. consensus?
Exhibit 4: MSe vs. c nsensus
| Lotes | MSe - 2026 | MSe - 2027 | MSe - 2028 | Consensus - 2026 | Consensus - 2027 | Consensus - 2028 | Variance - 2026 | Variance - 2027 | Variance - 2028 |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 39,271 | 47,293 | 57,352 | 39,461 | 48,933 | 58,050 | %0 | -3% | -1% |
| GM | 46.3% | 48.4% | 49.5% | 47.0% | 49.9% | 51.1% | -0.6% | -1.5% | -1.6% |
| OpM | 25.7% | 30.7% | 34.1% | 26.3% | 31.8% | 33.7% | -0.6% | -1.2% | 0.4% |
| Net income | 8,925 | 11,979 | 15,945 | 9,073 | 12,680 | 15,667 | -2% | %9- | 2% |
| EPS | 79.63 | 106.88 | 142.26 | 80.95 | 113.13 | 139.78 | -2% | %9- | 2% |
S urce: Visible Alpha, M rgan Stanley Research estimates.
M Idea
Price Target Discussion and Valuation Methodology
Our price target increases ~15%, to NT$2,350 from NT$2,0 5, driven mainly by our higher earnings estimates for 2027-28.
Our new PT implies ~22x 2027e P/E, slightly above its three-year average forward P/E of 7.4x, but still below that of peer Amphenol (25-35x 2027e P/E, based on Visible Alpha consensus). We think Lotes stock could re-rate to a higher valuation multiple if margins hold up well and Lotes' exposure to AI PCs and AI servers grows in the coming years.
We continue to derive our PT, which is our base case scenario value, from a residual income model (RIM), consistent with the methodology we apply to the rest of our tech hardware coverage universe. To calculate the intrinsic 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 the 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 RIM assumptions (all unchanged) include a cost of equity of 9.2% (beta of ~ .0, equity risk premium of ~8.7% and risk-free rate of ~ .0%), a medium-term growth rate of 2.5% and a terminal growth rate of 3%.
Our bull and bear case values rise to NT$3, 00 and NT1,285, respectively, in line with the increase in magnitude of our base case scenario.
Exhibit 5: L tes: Residual inc me m del
| 2026E | 2027E | 2028E | 2029E | 2030E | 2031E | 2032E | 2033E | 2034E | 2035E | 2036E | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total Equity | 45,603 | 53,171 | 63,183 | 73,889 | 85,933 | 99,483 | 114,726 | 131,875 | 151,168 | 172,872 | 193,835 | |
| Net Profit | 8,925 | 11,979 | 15,945 | 17,938 | 20,180 | 22,702 | 25,540 | 28,733 | 32,324 | 36,365 | 37,456 | |
| Return on Equity | 20.8% | 24.3% | 27.4% | 26.2% | 25.3% | 24.5% | 23.8% | 23.3% | 22.8% | 22.4% | 20.4% | |
| 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 | 9.2% | 9.2% | 9.2% | 9.2% | 9.2% | 9.2% | 9.2% | 9.2% | 9.2% | 9.2% | 9.2% | 9.2% |
| Residual Income | 4,678 | 6,876 | 9,693 | 10,738 | 11,878 | 13,157 | 14,593 | 16,206 | 18,018 | 20,056 | 19,449 | |
| Spread | 11.6% | 15.1% | 18.2% | 17.0% | 16.1% | 15.3% | 14.7% | 14.1% | 13.7% | 13.3% | 11.3% | |
| Beginning Equity Capital | 45,603 | |||||||||||
| PV of Forecast Period | 83,013 | |||||||||||
| PV of Continuing Value | 134,772 | |||||||||||
| Equity Value | 263,387 | |||||||||||
| No. of Shares | 112 | |||||||||||
| Projected Price | 2,350.0 | |||||||||||
| Implied 2027 P/E | 22.0x | |||||||||||
| Implied 2028 P/E | 16.5x |
S urce: M rgan Stanley Research (E) estimates.
M Idea
Exhibit 6: L tes' past 3-year f rward P/E band
S urce: TEJ, M rgan Stanley Research.
M Idea
Financials
Exhibit 7: Quarterly and Annual Estimates
| 1Q25 | 2Q25 | 3Q25 | 4Q25 | 1Q26 | 2Q26 | 3Q26E | 4Q26E | 2025 | 2026E | 2027E | 2028E | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales | 7,765 | 8,336 | 8,422 | 9,260 | 9,328 | 9,569 | 9,924 | 10,451 | 33,783 | 39,271 | 47,293 | 57,352 |
| COGS | (3,769) | (4,085) | (4,109) | (4,487) | (4,706) | (5,218) | (5,493) | (5,658) | (16,450) | (21,075) | (24,408) | (28,973) |
| Gross profit | 3,997 | 4,251 | 4,313 | 4,773 | 4,622 | 4,351 | 4,431 | 4,793 | 17,334 | 18,197 | 22,885 | 28,379 |
| Operating expenses | (1,546) | (1,653) | (1,788) | (2,002) | (1,913) | (2,248) | (1,979) | (1,984) | (6,989) | (8,123) | (8,388) | (8,825) |
| SG&A | (762) | (810) | (899) | (1,015) | (938) | (1,101) | (1,096) | (1,092) | (3,486) | (4,227) | (4,708) | (5,066) |
| R&D | (784) | (843) | (889) | (987) | (975) | (1,147) | (883) | (892) | (3,503) | (3,897) | (3,680) | (3,758) |
| Operating income | 2,451 | 2,599 | 2,525 | 2,771 | 2,708 | 2,103 | 2,452 | 2,810 | 10,344 | 10,073 | 14,497 | 19,554 |
| Non-operating income | 420 | (1,378) | 357 | 447 | 295 | 495 | 245 | 247 | (154) | 1,282 | 986 | 986 |
| Interest income | 110 | 93 | 54 | 48 | 48 | 57 | 57 | 57 | 305 | 217 | 226 | 226 |
| Investment income | (12) | (10) | (11) | (9) | (9) | (10) | (11) | (10) | (42) | (41) | (41) | (41) |
| Disposal of investment | (0) | 0 | 0 | 2 | 5 | 5 | 0 | 0 | 2 | 10 | 0 | 0 |
| Exchange gain | 234 | (1,505) | 215 | 110 | 7 | (167) | 0 | 0 | (946) | (160) | 0 | 0 |
| Other | 89 | 43 | 99 | 296 | 245 | 610 | 200 | 200 | 528 | 1,254 | 800 | 800 |
| Pre-tax income | 2,871 | 1,220 | 2,882 | 3,218 | 3,003 | 2,598 | 2,697 | 3,056 | 10,191 | 11,355 | 15,483 | 20,540 |
| Income tax | (573) | (457) | (565) | (649) | (572) | (624) | (506) | (669) | (2,244) | (2,371) | (3,434) | (4,525) |
| Minority interest | 23 | 14 | (2) | 46 | 35 | (11) | 17 | 17 | 81 | 59 | 70 | 70 |
| Net income | 2,276 | 749 | 2,318 | 2,523 | 2,397 | 1,984 | 2,174 | 2,370 | 7,866 | 8,925 | 11,979 | 15,945 |
| Adj.wtd.avg.shrs (mn) | 113 | 112 | 112 | 112 | 112 | 112 | 112 | 112 | 112 | 112 | 112 | 112 |
| EPS | 20.22 | 6.69 | 20.71 | 22.51 | 21.37 | 17.68 | 19.36 | 21.11 | 70.18 | 79.63 | 106.88 | 142.26 |
| Fully Diluted shares (mn) | 113 | 112 | 112 | 112 | 112 | 112 | 112 | 112 | 112 | 112 | 112 | 112 |
| Diluted EPS (NT$) | 20.22 | 6.69 | 20.71 | 22.51 | 21.37 | 17.68 | 19.36 | 21.11 | 70.18 | 79.63 | 106.88 | 142.26 |
| Margins (%) | ||||||||||||
| Gross Margin | 51.5 | 51.0 | 51.2 | 51.5 | 49.5 | 45.5 | 44.6 | 45.9 | 51.3 | 46.3 | 48.4 | 49.5 |
| Operating Margin | 31.6 | 31.2 | 30.0 | 29.9 | 29.0 | 22.0 | 24.7 | 26.9 | 30.6 | 25.7 | 30.7 | 34.1 |
| Pretax Margin | 37.0 | 14.6 | 34.2 | 34.8 | 32.2 | 27.1 | 27.2 | 29.2 | 30.2 | 28.9 | 32.7 | 35.8 |
| Net Margin | 29.3 | 9.0 | 27.5 | 27.2 | 25.7 | 20.7 | 21.9 | 22.7 | 23.3 | 22.7 | 25.3 | 27.8 |
| QoQ Growth (%) | ||||||||||||
| Sales | -6 | 7 | 1 | 10 | 1 | 3 | 4 | 5 | ||||
| Gross Profit | -9 | 6 | 1 | 11 | -3 | -6 | 2 | 8 | ||||
| Operating Profit | -14 | 6 | -3 | 10 | -2 | -22 | 17 | 15 | ||||
| Pretax Profit | -20 | -58 | 136 | 12 | -7 | -13 | 4 | 13 | ||||
| Net Profit | -22 | -67 | 209 | 9 | -5 | -17 | 10 | 9 | ||||
| YoY Growth (%) | ||||||||||||
| Sales | 22 | 13 | 4 | 12 | 20 | 15 | 18 | 13 | 12 | 16 | 20 | 21 |
| Gross Profit | 23 | 10 | 2 | 8 | 16 | 2 | 3 | 0 | 10 | 5 | 26 | 24 |
| Operating Profit | 21 | 1 | -10 | -3 | 11 | -19 | -3 | 1 | 1 | (3) | 44 | 35 |
| Pretax Profit | 7 | -59 | 10 | -11 | 5 | 113 | -6 | -5 | (14) | 11 | 36 | 33 |
| Net Profit | 10 | -67 | 12 | -13 | 5 | 165 | -6 | -6 | (15) | 13 | 34 | 33 |
S urce: C mpany data, M rgan Stanley Research (E) estimates.
M Idea
Exhibit 8: C ns lidated Financial Summary
Consolidated Income Statement
Consolidated Cash Flow Statement
| NT$mn (Year End Dec 31) | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|
| Net sales | 33,783 | 39,271 | 47,293 | 57,352 |
| COGS | (16,450) | (21,075) | (24,408) | (28,973) |
| Gross profit | 17,334 | 18,197 | 22,885 | 28,379 |
| Operating expenses | (6,989) | (8,123) | (8,388) | (8,825) |
| Operating income | 10,344 | 10,073 | 14,497 | 19,554 |
| Non-operating income | (154) | 1,282 | 986 | 986 |
| Interest income | 305 | 217 | 226 | 226 |
| Investment income | (42) | (41) | (41) | (41) |
| Disposal of investment | 2 | 10 | - | - |
| Exchange gain | (946) | (160) | - | - |
| Other | 528 | 1,254 | 800 | 800 |
| Pre-tax income | 10,191 | 11,355 | 15,483 | 20,540 |
| Income tax | (2,244) | (2,371) | (3,434) | (4,525) |
| Minority interests | 81 | 59 | 70 | 70 |
| Net income | 7,866 | 8,925 | 11,979 | 15,945 |
| Adj. wtd. Avg. shrs (m) | 112 | 112 | 112 | 112 |
| Reported EPS (NT$) | 70.18 | 79.63 | 106.88 | 142.26 |
| Diluted shrs (m) | 112 | 112 | 112 | 112 |
| Diluted EPS (NT$) | 70.18 | 79.63 | 106.88 | 142.26 |
Consolidated Balance Sheet
| NT$mn (Year End Dec 31) | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|
| Operating Cashflow | 8,528 | 10,314 | 11,654 | 14,838 |
| Net Profits | 7,866 | 8,925 | 11,979 | 15,945 |
| Depreciation & Amort. | 2,610 | 2,610 | 2,382 | 2,195 |
| Investment losses/(income) | (2) | 41 | 41 | 41 |
| Working capital change | 18,898 | (1,065) | (2,475) | (3,000) |
| Other adjustments | (20,658) | (187) | (273) | (342) |
| Investing Cashflow | (5,857) | (1,435) | (1,421) | (1,405) |
| Capex | (4,976) | (1,500) | (1,500) | (1,500) |
| Change of L/T investment | (62) | 0 | 0 | 0 |
| Change of S/T investment | (746) | 0 | 0 | 0 |
| Other adjustments | (129) | 0 | 0 | 0 |
| Financing Cashflow | (8,844) | (3,763) | (4,210) | (5,672) |
| Increase in L/T debt | 0 | 0 | 0 | 0 |
| Increase in S/T debt | (3,551) | 0 | 0 | 0 |
| Issuance of stock | 0 | (5) | 0 | 0 |
| Cash dividends | (4,803) | (3,923) | (4,451) | (5,974) |
| Other adjustments | (490) | 165 | 241 | 302 |
| FX adjustment | 15 | 160 | 0 | 0 |
| Net change in cash | (6,159) | 5,276 | 6,022 | 7,761 |
2026E 2027E 2028E NT$mn (Year End Dec 31)
57,352 Operating Cashflow
(28,973) Net Profits
19,554 Working capital change
986 Other adjustments
(41) Capex
800 Other adjustments
142.26 Other adjustments
| NT$mn (Year End Dec 31) | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|
| Cash | 12,500 | 17,776 | 23,798 | 31,559 |
| Mkt securities | 1,029 | 1,029 | 1,029 | 1,029 |
| AR/NR | 14,182 | 16,486 | 19,853 | 24,076 |
| Inventory | 4,375 | 5,605 | 6,492 | 7,706 |
| Others | 1,148 | 1,335 | 1,608 | 1,949 |
| Current Assets | 33,234 | 42,230 | 52,779 | 66,319 |
| Long-term investments | 962 | 962 | 962 | 962 |
| Fixed assets | 13,429 | 12,254 | 11,294 | 10,503 |
| Other assets | 2,808 | 2,808 | 2,808 | 2,808 |
| Total Assets | 50,433 | 58,254 | 67,843 | 80,592 |
| S/T borrowings | 225 | 225 | 225 | 225 |
| AP/NP | 3,678 | 4,712 | 5,457 | 6,478 |
| Other ST liabilities | 5,102 | 6,536 | 7,570 | 8,986 |
| Total Current Liabilities | 9,005 | 11,473 | 13,253 | 15,689 |
| L/T debt | - | - | - | - |
| Other LT libilities | 1,013 | 1,178 | 1,419 | 1,721 |
| Total Liabilities | 10,018 | 12,652 | 14,672 | 17,410 |
| Common shares | 1,125 | 1,121 | 1,121 | 1,121 |
| Retained Earnings | 25,394 | 30,587 | 38,155 | 48,167 |
| Other SH' Equity | 13,895 | 13,895 | 13,895 | 13,895 |
| Total Shareholders' Equity | 40,415 | 45,603 | 53,171 | 63,183 |
| Total Liab./SH's Equity | 50,433 | 58,254 | 67,843 | 80,592 |
| 2025 | 2026E | 2027E | 2028E | |
|---|---|---|---|---|
| Margins (%) | ||||
| Gross margin | 51.3 | 46.3 | 48.4 | 49.5 |
| Operating margin | 30.6 | 25.7 | 30.7 | 34.1 |
| Pretax margin | 30.2 | 28.9 | 32.7 | 35.8 |
| Net margin | 23.3 | 22.7 | 25.3 | 27.8 |
| YoY growth (%) | ||||
| Sales | 12.3 | 16.2 | 20.4 | 21.3 |
| Operating profits | 1.0 | (2.6) | 43.9 | 34.9 |
| Pretax profits | (14.1) | 11.4 | 36.4 | 32.7 |
| Net profits | (15.2) | 13.5 | 34.2 | 33.1 |
| Others | ||||
| Cash dividend payout (%) | 50% | 50% | 50% | 50% |
| Cash div (NT$) | 35.00 | 39.71 | 53.30 | 70.95 |
| Yield (%) | 2% | 2% | 3% | 4% |
| Net Debt/Equity (%) | -33% | -41% | -46% | -51% |
| Liabilities/Equity (%) | 25% | 28% | 28% | 28% |
| Liabilities/Assets (%) | 20% | 22% | 22% | 22% |
| ROAE (%) | 20% | 21% | 24% | 27% |
| ROAA (%) | 16% | 16% | 19% | 21% |
| AR/NR Turnover (days) | 145 | 143 | 140 | 140 |
| Inventory Turnover (days) | 86 | 86 | 90 | 89 |
| AP/NP Turnover (days) | 72 | 73 | 76 | 75 |
| Cash conversion cycle | 159 | 156 | 155 | 154 |
Consolidated Financial Ratios
S urce: C mpany data, M rgan Stanley Research (E) estimates.
31,559 Margins (%)
1,029 Gross margin
24,076 Operating margin
10,503 Operating profits
225 Others M Idea
Risk Re ard - Lotes Co. Ltd. (3533.TW) Risk Reward - Lotes Co. Ltd. (3533.TW)
Benefiting from better mix and increasing AI exposure; OW
NT$2,350.00 PRICE TARGET
Primary - Residual Income
Base case, residual income model. Key assumptions include a cost of equity of 9.6% (beta of 1.0, equity risk premium of 8.7% and risk-free rate of 1.0%), a medium-term growth rate of 12.5%, and a terminal growth rate of 3%.
NT$2,375.00
Consensus Price Target Distribution
Source: Refinitiv, Morgan Stanley Research
RISK REWARD CHART
Key: Historical Stock Performance Current Stock Price Price Target
Source: Refinitiv, Morgan Stanley Research
BULL CASE
BASE CASE
OVERWEIGHT THESIS
- ▪We believe GM will trough in 3Q and start to recover from 4Q onward, driven by rising adoption rates of new server platform CPU sockets, which help Lotes reflect a higher cost structure to its end customers.
- ▪Adoption of QD and SOCAMM connectors for AI servers have been rising since 2H26 and should see more contributions into CY27. NPO socket is also expected to ramp in CY27 in small volume, with increases in 2028.
- ▪We forecast the AI revenue mix will rise from ~5% in CY5 to slightly more than 20% by CY28.
- ▪Our price target implies 22x 2027e P/E and 16.5x 2028e P/E, which we consider undemanding vs. its current valuation of 17x 2027e P/E.
Source: Refinitiv, Morgan Stanley Research
Risk Reward Themes
Electric Vehicles:
Secular Growth:
Positive Positive
View descriptions of Risk Rewards Themes here
BEAR CASE
32x 2027e P/E
Faster server and PC demand growth in 2026 with strong EV project ramp-up: Server and PC demand enjoy significantly stronger growth in 2026, driven by new data center builds/replacements, as well as Windows replacement and PC upgrades. Demand from its strategic customers continues to grow in response to positive feedback on its own silicon. Growth from automotive is much better, with share gains and new project wins.
22x 2027e P/E
Server business has content growth tailwinds; DT volumes to stabilize in the next two to three years, but enjoy content growth; limited room for margin expansion in the next three years: We forecast a total sales CAGR of ~19% in 2025-28, with operating profit margin rising to 34% by 2028 from ~31% in 2025.
12x 2027e P/E
Much weaker server and PC demand in 2026; automotive projects ramp-up is slower than expected in coming years: Server and PC demand decline much more than we anticipate in 2026, hampered by a weakening macro backdrop. Demand from its strategic customers also faces these challenging headwinds. Demand upturn for automotive is much slower, as are new project wins in the coming quarters.
NT$1,285.00
NT$3,400.00
NT$2,350.00
M Idea
Risk Reward - Lotes Co. Ltd. (3533.TW)
KEY EARNINGS INPUTS
| Drivers | Dec 2025 | Dec 2026e | Dec 2027e | Dec 2028e |
|---|---|---|---|---|
| Server revenue contribution (%) | 39.8 | 55.6 | 62.6 | 65.6 |
| Auto revenue contribution (%) | 7.3 | 7.4 | 6.9 | 6.9 |
INVESTMENT DRIVERS
- CPU socket, DDR, PCIe upgrades for servers
- CPU socket, DDR, PCIe upgrades for desktops
- Rising EV penetration rate
- Margin expansion driven by more favorable product mix
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
- Stronger-than-expected growth in the server business, such as from cloud and enterprise in China
- Stronger-than-expected DT demand
- Sooner-than-expected inventory digestion of NB
- Faster ramp-up of its EV business
RISKS TO DOWNSIDE
- Further deceleration of server demand from US hyperscalers
- Weaker-than-expected DT demand
- Slower-than-expected inventory digestion of NB
- More severe pricing erosion driven by competition
OWNERSHIP POSITIONING
| Inst. Owners, % Active | 67.4% |
|---|---|
Source: Refinitiv, Morgan Stanley Research
MS ESTIMATES VS. CONSENSUS
M Idea
Risk Re ard Reference links
. View explanation of Options Probabilities methodology -
Options_Probabilities_Exhibit_Link.pdf
- View descriptions of Risk Rewards Themes - RR_Themes_Exhibit_Link.pdf
-
View explanation of regional hierarchies - GEG_Exhibit_Link.pdf
-
View explanation of Theme/Exposure methodology -
ESG_Sustainable_Solutions_External_Link.pdf
- View explanation of HERS methodology - ESG_HERS_External_Link.pdf
M Idea
圖片清單（已驗證 2026-10-28）
| 檔名 | size | 分類 | 親眼所見內容 |
|---|---|---|---|
| 報告_MS_嘉澤3533_20261027_001.png | 13KB | 文字卡（AI 營收占比預估圖，<40KB 未細讀） | Exhibit 2 AI revenue mix 預估圖 |
| 報告_MS_嘉澤3533_20261027_002.png | 39KB | 真資料圖（P/E band，財務類不嵌 lib） | Exhibit 6 過去 3 年 forward P/E band 圖（<40KB，僅依圖說登錄） |
| 報告_MS_嘉澤3533_20261027_003.png | 26KB | 文字卡（Risk Reward 圖，<40KB） | Risk Reward 股價走勢與 Bull／Base／Bear 目標價圖 |
| 報告_MS_嘉澤3533_20261027_004.png | 12KB | 文字卡（<40KB） | Risk Reward 頁小圖 |
| 報告_MS_嘉澤3533_20261027_005.png | 28KB | 文字卡（MS 預估 vs 共識，<40KB） | MS estimates vs. consensus 圖 |
| 報告_MS_嘉澤3533_20261027_006.png | 63KB | 真資料圖（股價／目標價／評等沿革，不嵌 lib） | 3533.TW 2023-10 至 2026-10 股價（藍線）與目標價階梯（紅虛線）：955、1000、1450、1650、1750、1850、1860、1880、1980、1400、1450、1325、1615、1580、1480、1585、2400、2350、2045；評等標記 O/I（2022-10）、E/I（2025-05）；正文下方文字列出完整日期：2026-03-13 1,585→04-20 2,400→05-15 2,350→08-13 2,045 |