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原始內容
Realtek Semiconductor Corp
Better-than-feared results and outlook
H2 sales holds up on price adjustment and stable demand
Realtek's Q2 sales were up 3% QoQ at NT$37.6bn, lower than consensus and UBSe of NT$38.0bn/39.7bn. Looking ahead, sales in H2 should stay rather resilient even with consumer demand weakness across certain segments, considering 1) June product price hike to be factored into H2 sales, especially for products impacted by memory price increase. 2) Stable demand from networking, automotive, and home appliances categories. 3) Despite soft consumer end demand, Realtek's customers are still prebuilding inventory given tightening industry supply especially at backend and memory YTD. We estimate Q3 sales to trend slightly higher and grow by 9% QoQ, better than consensus of -3% QoQ, mainly thanks to price hike. Q4 sales could decline seasonally by 7% QoQ. Realtek's inventory level appears healthy, with DOI at 107 days in Q2 vs 105 days in Q1.
GM weaker in Q2 but should improve in H2
Q2 GM was 47.0%, down 2.7ppts from Q1, as the company had to absorb component cost increases (e.g. DRAM/OSAT tightness) during the quarter. Realtek started to negotiate pricing adjustment with customers in June on a case-by-case basis, considering further cost inflation. We believe Realtek's GM impact can be mitigated and GM should pick up gradually in H2. We are estimating Q3/Q4's GM to be 47.9%/48.6%.
Earnings estimate revisions
We raise 2026E/27E sales by 3%/13%, to 25%/18% YoY growth, reflecting upside from price adjustment and more steady demand environment. We estimate opex to be kept at around 37% for Q3 and Q426, as the company continues to conduct cost control measures to optimise profitability. These changes result in EPS increases of 2%/18%/12% in 2026E/27E/28E.
Valuation: maintain Neutral; raise our price target from NT$525 to NT$690
We maintain our Neutral rating given the uncertainty about consumer demand due to memory cost induced pricing pressure. Our new price target is based on 17x 2027E PE vs 16x 2026E PE previously, justified by our higher LT earnings CAGR estimate of 16%, from 14% prior.
| Equities | Equities | Equities | Equities |
|---|---|---|---|
| Taiwan | Taiwan | Taiwan | Taiwan |
| Semiconductors | Semiconductors | Semiconductors | Semiconductors |
| 12-month rating | 12-month rating | 12-month rating | Neutral |
| 12m price target | 12m price target | 12m price target | NT$690.00 Prior : NT$525.00 |
| Price (30 Jul 2026) | Price (30 Jul 2026) | Price (30 Jul 2026) | NT$697.00 |
| RIC: 2379.TW BBG: 2379 TT | RIC: 2379.TW BBG: 2379 TT | RIC: 2379.TW BBG: 2379 TT | RIC: 2379.TW BBG: 2379 TT |
| Trading data and key metrics | Trading data and key metrics | Trading data and key metrics | Trading data and key metrics |
| 52-wk range | 52-wk range | 52-wk range | NT$900.00-445.00 |
| Market cap. | Market cap. | Market cap. | NT$357b/US$11.0b |
| Free float | Free float | Free float | 85% |
| Avg. daily volume ('000) | Avg. daily volume ('000) | Avg. daily volume ('000) | 5,682 |
| Avg. daily value (m) | Avg. daily value (m) | Avg. daily value (m) | NT$3,897.1 |
| Common s/h equity (12/26E) | Common s/h equity (12/26E) | Common s/h equity (12/26E) | NT$46.0b |
| P/BV (12/26E) | P/BV (12/26E) | P/BV (12/26E) | 7.8x |
| Net debt to EBITDA (12/26E) | Net debt to EBITDA (12/26E) | Net debt to EBITDA (12/26E) | NM |
| EPS (UBS, diluted) (NT$) | EPS (UBS, diluted) (NT$) | EPS (UBS, diluted) (NT$) | EPS (UBS, diluted) (NT$) |
| From | To | %ch Cons. | |
| 12/26E | 33.07 | 33.69 | 2 32.47 |
| 12/27E | 34.17 | 40.31 | 18 36.89 |
| 12/28E | 38.41 | 43.20 | 12 42.33 |
| Sunny Lin Analyst sunny.lin@ubs.com +886-2-8722 7346 Ryan Sun | |||
| Associate +886-2-8722 | |||
| Analyst ryan-za.sun@ubs.com 7267 | |||
| Christine Chen, CFA Associate Analyst christine.chen@ubs.com +886-2-8722 7361 |
| Highlights (NT$m) | 12/23 | 12/24 | 12/25 | 12/26E | 12/27E | 12/28E | 12/29E | 12/30E |
|---|---|---|---|---|---|---|---|---|
| Revenues | 95,179 | 113,394 | 122,706 | 152,854 | 180,042 | 198,772 | 223,494 | 254,746 |
| EBIT (UBS) | 6,655 | 13,502 | 14,360 | 17,165 | 20,792 | 22,367 | 27,447 | 33,215 |
| Net earnings (UBS) | 9,153 | 15,291 | 14,753 | 17,311 | 20,712 | 22,194 | 26,723 | 31,927 |
| EPS (UBS, diluted) (NT$) | 17.59 | 29.63 | 28.60 | 33.69 | 40.31 | 43.20 | 52.01 | 62.14 |
| DPS (net) (NT$) | 15.50 | 25.50 | 23.59 | 27.61 | 33.12 | 35.49 | 42.73 | 51.05 |
| Net (debt) / cash | 37,113 | 50,599 | 51,286 | 58,631 | 59,124 | 61,505 | 66,897 | 73,850 |
| Profitability/valuation | 12/23 | 12/24 | 12/25 | 12/26E | 12/27E | 12/28E | 12/29E | 12/30E |
| EBIT (UBS) margin% | 7.0 | 11.9 | 11.7 | 11.2 | 11.5 | 11.3 | 12.3 | 13.0 |
| ROIC (EBIT)% | (490.6) | (193.8) | (122.3) | (85.1) | (86.4) | (114.1) | (165.1) | (245.5) |
| EV/EBITDA (UBS core) x | 16.1 | 12.4 | 11.6 | 13.5 | 11.4 | 10.7 | 8.9 | 7.3 |
| P/E (UBS, diluted) x | 22.6 | 17.5 | 18.7 | 20.7 | 17.3 | 16.1 | 13.4 | 11.2 |
| Equity FCF (UBS) yield% | 7.7 | 8.1 | 7.6 | 5.8 | 3.9 | 5.3 | 6.5 | 7.9 |
| Dividend yield (net)% | 3.9 | 4.9 | 4.4 | 4.0 | 4.8 | 5.1 | 6.1 | 7.3 |
Source: Company accounts, LSEG Eikon, UBS estimates. Metrics marked as (UBS) have had analyst adjustments applied. Valuations: based on an average share price that year, (E): based on a share price of NT$ 697.00 on 30-Jul-2026
Thesis Map UBS Research THESIS MAP a guide to our thinking and what´s where in this report
Pivotal Questions
UBS VIEW
EVIDENCE
WHAT´S PRICED IN?
Upside/Downside Spectrum
Company Description
Q: Can Realtek sustain its H126 sales growth of 10.5% YoY in H226?
Realtek's sales should hold up better than feared into H2 and grow 41% YoY. We expect key drivers to be price adjustments as Realtek passes through higher cost alongside mix upgrade. In terms of demand, although consumer and PC restocking are slowing down, demand from networking, auto, and IoT remains steady.
Q: Can Realtek maintain its GM in H226 and in 2027 at the current level given cost inflation?
We forecast gross margin to have a sequential recovery in H226, at 48.3%, from Q2's 47.0%, assuming Realtek can pass through the rising supply chain cost including foundry and packaging with its ongoing pricing negotiations with end customers. However, if demand further weakens into late 2026, there could be some headwinds in the short term as Realtek starts to see challenges to fully passing through the higher production cost, and product mix may also turn more unfavorable.
We believe sales in H2 should stay rather resilient even with consumer demand weakness across certain segments, considering 1) June product price hike to be factored into H2 sales, especially for products impacted by memory price increase. 2) Stable demand from networking, automotive, and home appliances categories. 3) Despite soft consumer end demand, Realtek's customers are still prebuilding inventory given tightening industry supply especially at backend and memory YTD.
Realtek indicated it has negotiated pricing adjustments on a case-by-case basis with its customers in June 2026, to offset higher cost pressure from supply chain tightness and rising component costs. This should bode well for sales and margins in H226.
Realtek is trading at 17x 2027E PE, higher than its historical average of 15x forward PE. We believe the market could be optimistic about price hikes and better sales momentum, alongside Realtek's ability to hold up margin.
| Value drivers (2027E) | Revenue growth | Wi-Fi revenue growth | Gross margin | Operating margin |
|---|---|---|---|---|
| NT$800.00 upside | +22% | +34% | 49.1% | 13.5% |
| NT$690.00 base | +18% | +24% | 48.2% | 11.5% |
| NT$590.00 downside | +14% | +16% | 46.9% | 9.2% |
Source: UBS estimates
Founded in 1987, Realtek Semiconductor (Realtek) is one of the world's leading integrated circuit (IC) design houses. It has technological expertise in digital and mixed-signal IC design, and its top five product lines in terms of sales are Wi-Fi, Ethernet switches, TV SoCs, Ethernet and audio codec.
Forecast changes
Figure 1: Realtek earnings comparison
| (NT$m) | Q226A | VA | Diff. vs VA | LSEG | Diff. vs LSEG | UBSe | Q126 | QoQ | Q225 | YoY |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 37,553 | 37,970 | -1% | 37,229 | 1% | 39,652 | 36,423 | 3% | 31,914 | 18% |
| Gross profit | 17,651 | 18,869 | -6% | 18,338 | -4% | 19,491 | 18,087 | -2% | 16,029 | 10% |
| - Gross margin | 47.0% | 49.7% | -269bps | 49.3% | -225bps | 49.2% | 49.7% | -266bps | 50.2% | -322bps |
| Operating profit | 3,725 | 4,767 | -22% | 4,801 | -22% | 4,836 | 4,332 | -14% | 4,008 | -7% |
| - OP margin | 9.9% | 12.6% | -264bps | 12.9% | -298bps | 12.2% | 11.9% | -197bps | 12.6% | -264bps |
| Net profit | 3,805 | 4,659 | -18% | 4,328 | -12% | 4,758 | 4,330 | -12% | 3,909 | -3% |
| EPS (NT$) | 7.42 | 9.17 | -19% | 8.55 | -13% | 9.28 | 8.44 | -12% | 7.62 | -3% |
Source: Company data, Visible Alpha, LSEG, UBS estimates;
Figure 2: Revisions to our earnings estimates
| New | New | New | Old | Old | Old | Change | Change | Change | |
|---|---|---|---|---|---|---|---|---|---|
| (NT$m) | 2026E | 2027E | 2028E | 2026E | 2027E | 2028E | 2026E | 2027E | 2028E |
| Revenue | 152,854 | 180,042 | 198,772 | 147,996 | 158,884 7% | 175,513 10% | 3% | 13% | 13% |
| - YoY chg (%) Revenue (US$m) - YoY chg (%) | 25% 4,807 22% | 18% 5,626 17% | 10% 6,212 10% | 21% 4,683 19% | 5,028 7% | 5,554 10% | 3% | 12% | 12% |
| Gross profit | 73,821 | 86,836 48.2% | 96,629 48.6% | 72,236 48.8% | 76,726 48.3% | 85,241 48.6% | 2% 1% | 13% 0% | 13% 0% |
| - Gross margin | 48.3% | 22,367 | 16,859 | 19,796 | 20% | 13% | |||
| Operating profit | 17,165 | 20,792 | 17,327 | 2% | |||||
| - Operating margin | 11.2% | 11.5% 23,787 | 11.3% 25,490 | 11.4% 19,532 | 10.9% 20,182 | 11.3% 22,688 | 0% | -1% | 0% |
| Pre-tax profit Reported net profit | 19,837 17,268 | 20,712 | 22,194 | 16,990 | 17,555 | 19,735 | 2% | 18% | 12% |
| - Net margin | 11.3% | 11.5% | 11.2% | 11.5% | 11.0% | 11.2% | 2% | 18% | 12% |
| Reported EPS (NT$) | 33.67 | 40.38 | 43.28 | 33.13 | 34.23 | 38.48 | 2% | 18% | 12% |
| - YoY chg (%) | 17% | 20% | 7% | 15% | 3% | 12% |
Source: UBS estimates; Note: Our EPS estimates are based on basic EPS, and may differ from the cover table.
Figure 3: UBS earnings estimates vs. consensus pre-results
| UBS | UBS | UBS | Consensus | Consensus | Consensus | Difference | Difference | Difference | |
|---|---|---|---|---|---|---|---|---|---|
| (NT$m) | 2026E | 2027E | 2028E | 2026E | 2027E | 2028E | 2026E | 2027E | 2028E |
| Revenue | 152,854 | 180,042 | 198,772 | 143,005 | 153,875 | 172,617 | 7% | 17% | 15% |
| - YoY chg (%) | 25% | 18% | 10% | 17% | 8% | 12% | |||
| Gross profit | 73,821 | 86,836 | 96,629 | 70,713 | 75,952 | 84,839 | 4% | 14% | 14% |
| - Gross margin | 48.3% | 48.2% | 48.6% | 49.4% | 49.4% | 49.1% | 1% | 1% | 1% |
| Operating profit | 17,165 | 20,792 | 22,367 | 17,199 | 18,934 | 21,876 | 0% | 10% | 2% |
| - Operating margin | 11.2% | 11.5% | 11.3% | 12.0% | 12.3% | 12.7% | 1% | 1% | 1% |
| Pre-tax profit | 19,837 | 23,787 | 25,490 | 19,949 | 21,659 | 24,481 | -1% | 10% | 4% |
| Net profit | 17,268 | 20,712 | 22,194 | 17,163 | 18,716 | 21,221 | 1% | 11% | 5% |
| - Net margin | 11.3% | 11.5% | 11.2% | 12.0% | 12.2% | 12.3% | |||
| Basic EPS (NT$) | 33.67 | 40.38 | 43.28 | 33.27 | 35.70 | 41.27 | 1% | 13% | 5% |
| - YoY chg (%) | 17% | 20% | 7% | 16% | 7% | 16% |
Source: Visible Alpha, UBS estimates; Note: Our EPS estimates are based on basic EPS, and may differ from the cover table.
Figure 4: Realtek sales by products
| Sales by products NT$m | Q126 | Q226E | Q326E | Q426E | Q127E | Q227E | Q327E | Q427E | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Wi-Fi YoY | $16,199 54% | $17,072 5% | $18,392 8% | $16,533 -10% | $19,448 18% | $20,079 3% | $22,377 11% | $22,939 3% | $36,795 10% | $33,699 -8% | $44,931 33% | $48,900 9% | $68,196 39% | $84,843 24% |
| Bluetooth YoY | $892 25% | $936 5% | $983 5% | $934 -5% | $906 -3% | $978 8% | $1,037 6% | $985 -5% | $4,740 -8% | $4,087 -14% | $3,990 -2% | $3,604 -10% | $3,745 4% | $3,907 4% $27,435 |
| Ethernet YoY | $5,577 23% | $5,404 -3% | $6,052 12% | $6,093 1% $5,143 | $6,169 1% $5,401 | $7,068 15% $5,779 | $7,473 6% $6,183 | $6,726 -10% | $13,481 5% | $12,054 -11% | $15,818 31% $11,285 | $20,170 28% | $23,126 15% | 19% $23,360 |
| Switch YoY PON | $3,941 20% $1,756 | $4,532 15% $2,107 | $5,303 17% | -3% | 5% $2,342 | 7% | 7% | $5,998 -3% $2,942 | $16,035 18% | $9,864 -38% | 14% | $14,177 26% | $18,919 33% | 23% $11,075 |
| YoY PC peripheral | 10% $3,357 45% | 20% $2,854 | $2,465 17% $2,968 | $2,342 -5% $2,671 | 0% $2,805 | $2,693 15% $2,945 | $3,097 15% $2,945 | -5% $2,857 | $5,857 4% $14,377 | $4,058 -31% $12,879 | $5,211 28% | $6,552 26% $12,621 | $8,670 32% | 28% $11,551 -3% |
| YoY Multimedia YoY | $4,701 42% | -15% $4,648 | 4% $4,787 | -10% $4,213 -12% | 5% $4,339 3% | 5% $4,556 5% | 0% $4,556 0% | -3% $4,419 -3% | -9% $20,505 8% | -10% $18,538 -10% | $14,181 10% $17,978 | -11% $16,683 | $11,850 -6% $18,348 | $17,870 |
| Sales %by Wi-Fi | Q126 | -1% Q226E | 3% Q326E | Q426E | Q127E | 46% | Q327E 47% | Q427E | 2022 | 2,023 | -3% 2,024 | -7% 2,025 | 10% 2026E | -3% 2027E 47% |
| products | Q227E | |||||||||||||
| Bluetooth | 44% | 45% | 45% | 44% 2% | 47% | 49% | 33% | 35% | 40% | 40% | 45% | |||
| Ethernet Switch | 2% | 2% | 2% 15% | 16% | 2% 15% | 2% | 2% | 2% | 4% | 4% 13% | 4% 14% | 3% 16% | 2% 15% | 2% |
| 15% | 14% | 13% | 14% | 16% | 16% | 14% | 12% 14% | 10% | 10% | 12% | 12% | 15% 13% | ||
| PON | 11% | 12% | 13% | 13% | 13% | 13% | 5% | 5% | 6% | 6% | ||||
| PC | 5% | 6% | 6% | 6% | 6% | 6% | 6% | 6% | 5% | 4% | ||||
| peripheral | 9% | 8% | 7% | 7% | 7% | 7% | 6% | 6% | 13% | 14% | 13% | 10% | 8% | 6% |
| Multimedia | 13% | 12% | 12% | 11% | 10% | 10% | 10% | 9% | 18% | 19% | 16% | 14% | 12% | 10% |
| Operating Metrics | Q126 | Q226E | Q326E | Q426E | Q127E | Q227E | Q327E | Q427E | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E |
| Revenue NT$m QoQ | $36,423 38.6% | $37,553 3.1% | $40,949 9.0% | $37,929 | $41,409 | $44,098 | $47,669 | $46,866 -1.7% | $111,790 | $95,179 | $113,394 | $122,706 | $152,854 | $180,042 |
| YoY | 4.0% | 17.7% | 38.9% | -7.4% 44.3% | 9.2% 13.7% | 6.5% 17.4% | 8.1% 16.4% | 23.6% | 6.0% | -14.9% | 19.1% | 8.2% | 24.6% | 17.8% |
| 49.7% | 48.3% | 42.8% | 50.4% | 50.0% | 48.3% | |||||||||
| GM% | 11.9% | 47.0% | 47.9% | 48.6% | 48.2% | 48.2% | 48.3% | 48.9% | 11.7% | 48.2% | ||||
| 9.9% | 11.0% | 11.1% | 14.1% | 7.0% | 11.9% | 11.2% | 11.5% | |||||||
| OpM% | 12.2% | 12.1% | 12.0% | 11.2% |
Source: Company data, UBS estimates
Figure 5: UBS earnings forecasts
| (NT$m) | 2025 | Q126 | Q226E | Q326E | Q426E | 2026E | Q127E | Q227E | Q327E | Q427E | 2027E | 2028E | 2029E | 2030E |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 122,706 | 36,423 | 37,553 18% | 40,949 | 37,929 | 152,854 | 41,409 | 44,098 | 47,669 | 46,866 | 180,042 | 198,772 | 223,494 | 254,746 |
| - YoY chg (%) - QoQ chg (%) | 8% | 4% 39% | 3% | 39% 9% | 44% -7% | 25% | 14% 9% | 17% 6% | 16% 8% | 24% -2% | 18% | 10% | 12% | 14% |
| Revenue (US$m) - YoY chg (%) - QoQ chg (%) | 3,931 11% 61,374 50.0% | 1,153 8% 36% 18,087 49.7% 4,332 | 1,188 16% 3% 17,651 47.0% 3,725 9.9% | 1,280 30% 8% 19,633 47.9% 4,497 | 1,185 40% -7% 18,450 48.6% | 4,807 22% 73,821 48.3% | 1,294 12% 9% 19,940 48.2% | 1,378 16% 6% 21,252 48.2% 5,290 | 1,490 16% 8% 23,015 48.3% 5,318 11.2% | 1,465 24% -2% 22,630 48.3% 5,189 | 5,626 17% 86,836 | 6,212 10% 96,629 48.6% | 6,984 12% 109,294 48.9% | 7,961 14% 124,930 |
| Gross profit - Gross margin Operating profit - Operating margin | 14,360 | 11.9% | 11.0% | 4,611 12.2% | 17,165 | 4,994 12.1% | 12.0% | 11.1% | 48.2% 20,792 | 22,367 | 27,447 | 49.0% 33,215 | ||
| Net profit - YoY chg (%) - QoQ chg (%) | 11.7% | 3,805 -3% | 5,142 4,477 31% | 5,348 | 11.2% | 5,707 4,969 | 6,023 5,245 | 5,295 18% | 11.5% | 11.3% | 12.3% | 13.0% | ||
| 14,753 | 4,977 4,330 | 4,657 | 19,837 17,268 | 15% 7% 9.69 | 6,081 | 5,975 | 23,787 | 25,490 | 30,691 | |||||
| Pre-tax profit | 17,261 | -12% | ||||||||||||
| 4,370 | 36,668 31,927 | |||||||||||||
| -4% | -9% | 75% | 17% | 5,203 12% | 20,712 | 22,194 7% | 26,723 20% | 19% | ||||||
| 63% | 18% | 4% | 38% 6% | 1% | -2% | 20% | ||||||||
| Basic EPS (NT$) | 28.77 | 8.44 | 7.42 | 8.73 | 9.08 | 33.67 | 10.23 | 10.32 | 10.14 | 40.38 | 43.28 | 52.11 | ||
| - YoY chg (%) | -4% | -9% | -3% | 31% | 75% | 17% | 38% | 18% | 12% | 62.25 | ||||
| 15% | 20% | 7% | 20% | 19% | ||||||||||
| - QoQ chg (%) | 63% | -12% | 18% | 4% | 7% | 6% | 1% | -2% |
Source: Company data, UBS estimates; Note: Our EPS estimates are based on basic EPS, and may differ from the cover table.
Figure 6: Realtek's 12-month forward PE band (x)
Source: LSEG, UBS
Realtek Semiconductor Corp (2379.TW)
| Income Statement (NT$m) | 12/23 | 12/24 | 12/25 | 12/26E | %ch | 12/27E | %ch | 12/28E | 12/29E | 12/30E |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | 95,179 | 113,394 | 122,706 | 152,854 | 24.6 | 180,042 | 17.8 | 198,772 | 223,494 | 254,746 |
| Gross profit | 40,748 | 57,162 | 61,374 | 73,821 | 20.3 | 86,836 | 17.6 | 96,629 | 109,294 | 124,930 |
| EBITDA (UBS) | 9,680 | 16,846 | 18,079 | 21,372 | 18.2 | 24,820 | 16.1 | 26,379 | 31,466 | 37,196 |
| Depreciation & amortisation | (3,025) | (3,344) | (3,719) | (4,208) | -13.1 | (4,028) | 4.3 | (4,011) | (4,019) | (3,981) |
| EBIT (UBS) | 6,655 | 13,502 | 14,360 | 17,165 | 19.5 | 20,792 | 21.1 | 22,367 | 27,447 | 33,215 |
| Associates & investment income | (47) | (41) | 2 | (3) | - | 0 | - | 0 | 0 | 0 |
| Other non-operating income | 569 | 344 | 326 | 632 | 94.1 | 800 | 26.5 | 800 | 800 | 800 |
| Net interest | 2,367 | 2,536 | 2,573 | 2,086 | -18.9 | 2,195 | 5.2 | 2,323 | 2,444 | 2,652 |
| Exceptionals (incl goodwill) | 0 | 0 | 0 | 0 | - | 0 | - | 0 | 0 | 0 |
| Pre-tax profit | 9,545 | 16,341 | 17,261 | 19,879 | 15.2 | 23,787 | 19.7 | 25,490 | 30,691 | 36,668 |
| Tax | (392) | (1,050) | (2,507) | (2,569) | -2.5 | (3,075) | -19.7 | (3,296) | (3,968) | (4,741) |
| Profit after tax | 9,153 | 15,292 | 14,753 | 17,311 | 17.3 | 20,712 | 19.6 | 22,194 | 26,723 | 31,927 |
| Preference dividends | 0 | 0 | 0 | 0 | - | 0 | - | 0 | 0 | 0 |
| Minorities | 0 | 0 | 0 | 0 | 49.3 | 0 | - | 0 | 0 | 0 |
| Extraordinary | 0 | 0 | 0 | 0 | - | 0 | - | 0 | 0 | 0 |
| items Net earnings (local GAAP) | 9,153 | 15,291 | 14,753 | 17,311 | 17.3 | 20,712 | 19.6 | 22,194 | 26,723 | 31,927 |
| Net earnings (UBS) | 9,153 | 15,291 | 14,753 | 17.3 | 20,712 | 19.6 | 22,194 | 26,723 | 31,927 | |
| Tax rate (%) | 4.1 | 6.4 | 14.5 | 17,311 12.9 | -11.0 | 12.9 | 0.1 | 12.9 | 12.9 | 12.9 |
| Per Share (NT$) | 12/23 | 12/24 | 12/25 | 12/26E | %ch | 12/27E | %ch | 12/28E | 12/29E | 12/30E |
| EPS (UBS, diluted) | 17.59 | 29.63 | 28.60 | 33.69 | 17.8 | 40.31 | 19.6 | 43.20 | 52.01 | 62.14 |
| EPS (local GAAP, diluted) | 17.59 | 29.63 | 28.60 | 33.69 | 17.8 | 40.31 | 19.6 | 43.20 | 52.01 | 62.14 |
| EPS (UBS, basic) | 17.85 | 29.82 | 28.77 | 33.75 | 40.38 | 19.6 | 43.28 | 62.25 | ||
| DPS (net) (NT$) | 15.50 | 27.61 | 17.3 | 33.12 | 19.9 | 35.49 | 52.11 | |||
| Cash EPS (UBS, diluted) 1 | 23.40 | 25.50 36.11 | 23.59 35.81 | 41.88 | 17.0 17.0 | 48.15 | 15.0 | 51.01 | 42.73 59.83 | 51.05 69.89 |
| Book value per share | 82.34 | 103.24 | 101.79 | 89.78 | -11.8 | 102.55 | 14.2 | 112.71 | 129.33 | 148.86 |
| Average shares (diluted) | 520 | 516 | 516 | 514 | -0.4 | 514 | 0.0 | 514 | 514 | 514 |
| Balance Sheet (NT$m) | 12/23 | 12/24 | 12/25 | 12/26E | %ch | 12/27E | %ch | 12/28E | 12/29E | 12/30E |
| Cash and equivalents Other current assets | 43,590 25,697 | 55,099 29,559 | 61,376 35,981 | 68,402 45,122 | 11.4 25.4 | 68,895 | 0.7 | 71,276 62,010 | 76,668 68,501 | 83,622 |
| Total current assets | 69,288 | 84,658 | 97,357 | 55,951 | 24.0 | 78,125 | ||||
| Net tangible fixed assets | 8,754 | 113,524 | 16.6 | 124,846 | 10.0 | 133,286 | 145,169 | 161,746 | ||
| 0 | 10,605 | 9,148 | -13.7 | 7,467 0 | -18.4 - | 5,802 0 | 4,131 | 150 | ||
| Net intangible fixed assets | 0 | 9,610 | 0 | 0 | - 8.7 | 26,056 | 27,354 | 0 | 0 30,762 | |
| Investments / other assets Total assets | 15,773 93,815 | 19,629 | 21,941 | 23,853 | 12.8 | 158,369 | 9.2 8.1 | 166,442 | 28,739 178,039 | 192,657 |
| liabilities | 41,996 | 113,897 | 129,903 | 146,525 | 100,633 | |||||
| Trade payables & other ST Short term debt | 53,461 | 64,666 | 87,308 | 35.0 | 91,801 | 5.1 | 94,192 | 96,763 | ||
| Total current liabilities | 4,250 46,246 | 4,500 | 10,090 | 9,771 97,080 | -3.2 29.9 | 9,771 101,572 | 0.0 4.6 | 9,771 103,964 | 9,771 106,534 | 9,771 110,405 |
| Long term debt | 2,227 | 57,961 0 | 74,756 0 | 0 | - | 0 | - | 0 | 0 | 0 |
| Other long term liabilities | 3,104 | 2,978 | 2,935 | 3,393 | 15.6 | 4,193 | 23.6 | 4,664 | 5,166 | 5,900 |
| Preferred shares | 0 | 0 | 0 | 0 | - | 0 | - | 0 | 0 | 0 |
| Total liabilities (incl pref shares) | 51,577 | 60,939 | 77,691 | 100,473 | 29.3 | 105,765 | 5.3 | 108,627 | 111,701 | 116,305 |
| Common s/h equity | 42,228 | 10 | 52,594 | 14.2 | 76,343 | |||||
| Minority interests | 10 | 52,948 10 | 52,202 | 46,042 10 | -11.8 0.3 | 10 | 0.0 | 57,805 10 | 66,328 10 | |
| Total liabilities & equity | 93,815 | 113,897 | 129,903 | 146,525 | 12.8 | 158,369 | 8.1 | 166,442 | 178,039 | 10 192,657 |
| Cash Flow (NT$m) | 12/23 | 12/24 | 12/25 | 12/26E | %ch | 12/27E | %ch | 12/28E | 12/29E | 12/30E |
| Net income (before pref divs) Depreciation & amortisation | 9,153 3,025 | 15,291 3,344 | 14,753 3,719 | 17,311 4,208 | 17.3 13.1 | 20,712 4,028 | 19.6 -4.3 | 22,194 4,011 | 26,723 4,019 | 31,927 3,981 |
| Net change in working capital | 9,803 | (1,623) | (3,994) | (2,827) | 29.2 | (6,098) | -115.7 | (3,527) | (3,771) | (5,534) |
| Other operating | (4,084) | 6,921 | 8,537 | 4,291 | -49.7 | (2,441) | - | (1,438) | (1,535) | (2,241) |
| Operating cash flow | 17,896 | 23,015 | 22,983 | -0.1 | 16,200 | -29.5 | 21,241 | 25,436 | 28,133 | |
| Tangible capital | (2,151) | 23,934 | (2,089) | (2,347) | (2,347) | |||||
| expenditure | (2,347) | (2,347) | -12.3 | (2,347) | 0.0 | 0 | ||||
| Intangible capital expenditure | 0 4,694 | 0 | 0 | 0 | - | 0 | - - | 0 | 0 | 0 |
| Net (acquisitions) & disposals Other investing | (1,459) | (5,613) | (11,748) | (5,721) (1,204) | 51.3 52.7 | 0 0 | 0 0 | 0 0 | 0 0 | |
| Investing cash flow | 1,084 | (1,748) | (2,543) | (9,272) | 43.4 | - | 0 | |||
| (9,707) | (16,380) | (2,347) | 74.7 | (2,347) | (2,347) | |||||
| Equity dividends paid | (13,847) | (7,949) 0 | (13,078) 0 | (12,098) | 7.5 | (14,160) | -17.0 - | (16,984) 0 | (18,199) 0 | (21,913) 0 |
| Share issues / (buybacks) | 0 | 0 | - | 0 | ||||||
| Other financing | (115) | (127) | (128) | 101 | - | 799 | NM | 471 | 503 | 734 0 |
| Change in debt & pref shares | (8,977) (22,939) | (1,990) (10,066) | 5,590 (7,616) | (319) (12,315) | - -61.7 | 0 (13,361) | - -8.5 | 0 (16,513) | 0 (17,697) | (21,179) |
| Financing cash flow Cash flow inc/(dec) in cash | (3,958) | (981) | 1,396 | - | 493 | 5,392 | 6,954 | |||
| -22.4 | 0 | -64.7 | 2,381 | |||||||
| FX / non cash items cash | (9,365) | 4,161 7,348 | 7,257 | 5,631 | 493 | -100.0 -93.0 | 0 | 0 | 0 | |
| (13,323) | 11,509 | 7,026 | 5,392 | |||||||
| in | 6,276 | 2,381 | ||||||||
| Balance sheet inc/(dec) | 12.0 | 6,954 |
Source: Company accounts, UBS estimates. (UBS) metrics use reported figures which have been adjusted by UBS analysts. 1 Cash EPS (UBS, diluted) is calculated using UBS net income adding back depreciation and amortization.
Realtek Semiconductor Corp (2379.TW)
| Valuation (x) | 12/23 | 12/24 | 12/25 | 12/26E | 12/27E | 12/28E | 12/29E | 12/30E |
|---|---|---|---|---|---|---|---|---|
| P/E (local GAAP, diluted) | 22.6 | 17.5 | 18.7 | 20.7 | 17.3 | 16.1 | 13.4 | 11.2 |
| P/E (UBS, diluted) | 22.6 | 17.5 | 18.7 | 20.7 | 17.3 | 16.1 | 13.4 | 11.2 |
| P/CEPS | 16.7 | 14.3 | 14.8 | 16.6 | 14.4 | 13.6 | 11.6 | 10.0 |
| Equity FCF (UBS) yield% | 7.7 | 8.1 | 7.6 | 5.8 | 3.9 | 5.3 | 6.5 | 7.9 |
| Dividend yield (net)% | 3.9 | 4.9 | 4.4 | 4.0 | 4.8 | 5.1 | 6.1 | 7.3 |
| P/BV | 4.8 | 5.0 | 5.3 | 7.8 | 6.8 | 6.2 | 5.4 | 4.7 |
| EV/revenues (core) | 1.6 | 1.8 | 1.7 | 1.9 | 1.6 | 1.4 | 1.2 | 1.1 |
| EV/EBITDA (UBS core) | 16.1 | 12.4 | 11.6 | 13.5 | 11.4 | 10.7 | 8.9 | 7.3 |
| EV/EBIT (core) | 23.4 | 15.5 | 14.6 | 16.8 | 13.7 | 12.6 | 10.2 | 8.2 |
| EV/OpFCF (core) | 23.4 | 15.5 | 14.6 | 16.8 | 13.7 | 12.6 | 10.2 | 8.2 |
| EV/op. invested capital | NM | NM | NM | NM | NM | NM | NM | NM |
| Enterprise value (NT$m) | 12/23 | 12/24 | 12/25 | 12/26E | 12/27E | 12/28E | 12/29E | 12/30E |
| Market cap. | 203,768 | 265,892 | 274,150 | 357,465 | 357,465 | 357,465 | 357,465 | 357,465 |
| Net debt (cash) | (39,287) | (43,856) | (50,943) | (54,958) | (58,877) | (60,314) | (64,201) | (70,374) |
| Buy out of minorities | 10 | 10 | 10 | 10 | 10 | 10 | 10 | 10 |
| Pension provisions/other | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total enterprise value | 164,491 | 222,045 | 223,217 | 302,517 | 298,598 | 297,161 | 293,274 | 287,102 |
| Non core assets | (8,854) | (12,560) | (14,203) | (14,503) | (14,503) | (14,503) | (14,503) | (14,503) |
| Core enterprise value | 155,637 | 209,485 | 209,015 | 288,014 | 284,094 | 282,658 | 278,771 | 272,598 |
| Growth (%) | 12/23 | 12/24 | 12/25 | 12/26E | 12/27E | 12/28E | 12/29E | 12/30E |
| Revenue | (14.9) | 19.1 | 8.2 | 24.6 | 17.8 | 10.4 | 12.4 | 14.0 |
| EBITDA (UBS) | (47.8) | 74.0 | 7.3 | 18.2 | 16.1 | 6.3 | 19.3 | 18.2 |
| EBIT (UBS) | (57.7) | 102.9 | 6.4 | 19.5 | 21.1 | 7.6 | 22.7 | 21.0 |
| EPS (UBS, diluted) | (42.3) | 68.5 | (3.5) | 17.8 | 19.6 | 7.2 | 20.4 | 19.5 |
| Net DPS | (42.6) | 64.5 | (7.5) | 17.0 | 19.9 | 7.2 | 20.4 | 19.5 |
| Margins & Profitability (%) | 12/23 | 12/24 | 12/25 | 12/26E | 12/27E | 12/28E | 12/29E | 12/30E |
| Gross profit margin | 42.8 | 50.4 | 50.0 | 48.3 | 48.2 | 48.6 | 48.9 | 49.0 |
| EBITDA margin | 10.2 | 14.9 | 14.7 | 14.0 | 13.8 | 13.3 | 14.1 | 14.6 |
| EBIT (UBS) margin | 7.0 | 11.9 | 11.7 | 11.2 | 11.5 | 11.3 | 12.3 | 13.0 |
| Net earnings (UBS) margin | 9.6 | 13.5 | 12.0 | 11.3 | 11.5 | 11.2 | 12.0 | 12.5 |
| ROIC (EBIT) | NM | NM | NM | NM | NM | NM | NM | NM |
| ROIC post tax | NM | NM | NM | NM | NM | NM | NM | NM |
| ROE (UBS) | 20.6 | 32.1 | 28.1 | 35.2 | 42.0 | 40.2 | 43.1 | 44.8 |
| Capital structure & Coverage (x) | 12/23 | 12/24 | 12/25 | 12/26E | 12/27E | 12/28E | 12/29E | 12/30E |
| Net debt / EBITDA | (3.8) | (3.0) | (2.8) | (2.7) | (2.4) | (2.3) | (2.1) | (2.0) |
| Net debt / total equity% | (87.9) | (95.5) | (98.2) | (127.3) | (112.4) | (106.4) | (100.8) | (96.7) |
| Net debt / (net debt + total equity)% | NM | NM | NM | NM | NM | NM | NM | NM |
| Net debt/EV% | (23.9) | (19.8) | (22.8) | (18.2) | (19.7) | (20.3) | (21.9) | (24.5) |
| Capex / depreciation% | 71.1 | 70.2 | 56.2 | 55.8 | 58.3 | 58.5 | 58.4 | 0.0 |
| Capex / revenue% | 2.3 | 2.1 | 1.7 | 1.5 | 1.3 | 1.2 | 1.1 | 0.0 |
| EBIT / net interest | - | - | - | - | - | - 1.2 | - | - |
| Dividend cover (UBS) | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 | |
| Div. payout ratio (UBS)% | 86.9 | 85.5 | 82.0 | 81.8 | 82.0 | 82.0 | 82.0 | 82.0 |
| Revenues by division (NT$m) | 12/23 | 12/24 | 12/25 | 12/26E | 12/27E | 12/28E | 12/29E | 12/30E |
| Others | 95,179 | 113,394 | 122,706 | 152,854 | 180,042 | 198,772 | 223,494 | 254,746 |
| Total | 95,179 | 113,394 | 122,706 | 152,854 | 180,042 | 198,772 | 223,494 | 254,746 |
| EBIT (UBS) by division (NT$m) | 12/25 | 12/26E | 12/27E | 12/28E | 12/30E | |||
| Others | 12/23 6,655 | 12/24 13,502 | 14,360 | 17,165 | 20,792 | 12/29E | 33,215 | |
| Total | 6,655 | 13,502 | 14,360 | 17,165 | 20,792 | 22,367 | 27,447 | 33,215 |
| 22,367 | 27,447 |
Source: Company accounts, UBS estimates. (UBS) metrics use reported figures which have been adjusted by UBS analysts.
Forecast returns
| Forecast price appreciation | -1.0% |
|---|---|
| Forecast dividend yield | 4.0% |
| Forecast stock return | 3.0% |
| Market return assumption | 6.3% |
| Forecast excess return | -3.3% |
Company Description
Founded in 1987, Realtek Semiconductor (Realtek) is one of the world's leading integrated circuit (IC) design houses. It has technological expertise in digital and mixed-signal IC design, and its top five product lines in terms of sales are Wi-Fi, Ethernet switches, TV SoCs, Ethernet and audio codec. Realtek's main competitors in the networking space are Broadcom, Marvell, MediaTek and Qualcomm.
Valuation Method and Risk Statement
We derive our price target using PE valuation, relative to the historical trading range. Key risks include: 1) higher/lower pricing pressure than expected; 2) a faster/slower networking upgrade; 3) faster-than-expected/slower-than-expected penetration of automotive Ethernet; and 4) a shorter-than-expected or longer-than-expected qualification period for Realtek to make progress in new verticals.
Quantitative Research Review
UBS Global Research publishes a quantitative assessment of its analysts' responses to certain questions about the likelihood of an occurrence of a number of short term factors in a product known as the 'Quantitative Research Review'. The views for this month can be found below. Views contained in this assessment on a particular stock reflect only the views on those short term factors which are a different timeframe to the 12-month timeframe reflected in any equity rating set out in this note. For previous responses please make reference to (i) previous UBS Global Research reports; and (ii) where no applicable research report was published that month, the Quantitative Research Review which can be found at https://neo.ubs.com/quantitative, or contact your UBS sales representative for access to the report or the Quantitative Research Team on ubs-quant-answers@ubs.com. A consolidated report which contains all responses is also available and again you should contact your UBS sales representative for details and pricing or the Quantitative Research Team on the email above.
Realtek Semiconductor Corp
| Question | Response |
|---|---|
| 1. Is the industry structure facing the firm likely to improve or deteriorate over the next six months? Rate on a scale of 1-5 (1 = getting worse, 3 = no change, 5 = getting better, N/A = no view) | 2 |
| 2. Is the regulatory/government environment facing the firm likely to improve or deteriorate over the next six months? Rate on a scale of 1-5 (1 = getting tougher 3 = no change, 5 = getting better, N/A = no view) | 3 |
| 3. Over the last 3-6 months in broad terms have things been improving/no change/getting worse for this stock? Rate on a scale of 1-5 (1 = getting a lot worse, 3 = not much change, 5 = getting a lot better, N/A = no view) | 2 |
| 4. Relative to the current CONSENSUS EPS forecast, is the next company EPS update likely to lead to: (1 = negative surprise vs consensus, 3 = in-line with consensus, 5 = positive surprise vs consensus expectations, N/A = no view) | 2 |
| 5. What's driving the difference? | |
| 6. Relative to YOUR current earnings forecast, is there relatively greater risk at the next earnings result of:(1 = downside skew risk to earnings, 3 = equal upside or downside risk to earnings, 5 = upside skew risk to earnings, N/A = no view) | 3 |
| 7. What's driving the difference? | |
| 8. Is there an upcoming catalyst for the company over the next three months? | Negative Catalyst |
| 9. Is there an actual or approximate date for the catalyst? | |
| 10. Is the catalyst date an actual or approximate date? | |
| 11. What is the catalyst? |
Required Disclosures
This document has been prepared by UBS Securities Pte. Ltd., Taipei Branch, an affiliate of UBS AG. UBS AG, its subsidiaries, branches and affiliates, including former Credit Suisse AG and its subsidiaries, branches and affiliates are referred to herein as "UBS".
For information on the ways in which UBS manages conflicts and maintains independence of its UBS Global Research product; historical performance information; certain additional disclosures concerning UBS Global Research recommendations; and terms and conditions for certain third party data used in research report, please visit https://www.ubs.com/disclosures. Unless otherwise indicated, information and data in this report are based on company disclosures including but not limited to annual, interim, quarterly reports and other company announcements. The figures contained in performance charts refer to the past; past performance is not a reliable indicator of future results. Additional information will be made available upon request. UBS Securities Co. Limited is licensed to conduct securities investment consultancy businesses by the China Securities Regulatory Commission. UBS acts or may act as principal in the debt securities (or in related derivatives) that may be the subject of this report. This recommendation was finalized on: 30 July 2026 03:02 PM GMT. UBS has designated certain UBS Global Research department members as Derivatives Research Analysts where those department members publish research principally on the analysis of the price or market for a derivative, and provide information reasonably sufficient upon which to base a decision to enter into a derivatives transaction. Where Derivatives Research Analysts coauthor research reports with Equity Research Analysts or Economists, the Derivatives Research Analyst is responsible for the derivatives investment views, forecasts, and/or recommendations. Quantitative Research Review: UBS Global Research publishes a quantitative assessment of its analysts' responses to certain questions about the likelihood of an occurrence of a number of short term factors in a product known as the 'Quantitative Research Review'. Views contained in this assessment on a particular stock reflect only the views on those short term factors which are a different timeframe to the 12-month timeframe reflected in any equity rating set out in this note. For the latest responses, please see the Quantitative Research Review Addendum at the back of this report, where applicable. For previous responses please make reference to (i) previous UBS Global Research reports; and (ii) where no applicable research report was published that month, the Quantitative Research Review which can be found at https://neo.ubs.com/ quantitative, or contact your UBS sales representative for access to the report or the Quantitative Research Team on ubs-quantanswers@ubs.com. A consolidated report which contains all responses is also available and again you should contact your UBS sales representative for details and pricing or the Quantitative Research team on the email above.