260719_citi_dynapack

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原始內容

citivelocity.com

19 Jul 2026 17:25:35 ET │ 11 pages

Dynapack International (3211.TWO)

2Q26 Temporary Mix Headwind Before BBU Reacceleration

CITI'S TAKE

Dynapack reported weaker 2Q26 results with EPS of NT$1.35, below both our/BBG estimates. We believe the earnings miss was largely driven by an unfavorable sales mix, as IT products accounted for a higher proportion of sales during the quarter while certain BBU shipments were delayed into 3Q, weighing on GPM. We view this as a timing issue rather than a weakening in the underlying fundamentals. Looking ahead, we expect 2Q to mark the last negative, with BBU shipments accelerating in 3Q to drive stronger revenue growth and a meaningful recovery in margins. We remain constructive on Dynapack's medium- to long-term outlook, supported by structural AI power demand, increasing BBU penetration, higher power product migration and expanding customer qualifications, all of which should continue to improve both earnings growth and profitability over the coming years. Any share price pullback would appear as an enhanced buying opportunity to us.

2Q26 earnings missed on temporary product mix headwinds - Dynapack reported 2Q26 sales of NT$3.5bn (+7% y/y), broadly in-line with our estimates, while EPS came in at NT$1.35, missing both our (NT$2.37)/BBG (NT$2.90) estimates. 2Q OPM of 6.5% was below the expectation. We attribute the earnings miss primarily to two temporary factors 1) higher IT product sales, diluting overall margins due to their structurally lower profitability and 2) timing difference in BBU shipment with some deliveries pushed into 3Q. Importantly, neither factors change our view of Dynapack's competitive position in the AI BBU supply chain.

Expect meaningful recovery in 3Q as BBU shipments ramp - We expect 3Q26 to represent a sharp inflection point, supported by the normalization of delayed BBU shipments together with continued strong customer demand for AI infrastructure. As BBU once again becomes the dominant growth driver, we expect stronger sequential revenue growth and meaningful margin recovery.

Earnings Summary

Source: Powered by dataCentral

Implications We continue to view Dynapack as one of the key beneficiaries of AI datacenter power infrastructure upgrades. Our positive stance remains supported

See Appendix A-1 for Analyst Certification, Important Disclosures and Research Analyst Affiliations

Prepared for Kevin Lu

Angela Hsu AC

+886-2-8726-9083 angela.hc.hsu@citi.com

Prepared for Kevin Lu by structural BBU demand growth driven by accelerating AIDC deployments, increasing BBU sales mix and the ramp of higher power BBUs (8kW and 12kW). While near-term earnings were affected by shipment timing and temporary product mix, we do not believe these issues alter the company's long-term growth trajectory. We therefore remain constructive on Dynapack's mid-/long-term growth outlook.

rigure 1. <2<o Preliminary Results comp

NTSmn

2Q25

Sales

COGS

Gross profits

OPEX

Operating profits

Total non-op incom

Pre-tax profits

Tax Exp

Net Income

EPS (NTS)

Margins

GPM

OPM

OPEX Ratio

Net Margin

1Q26

-251

419

-50

369

-56

313

2.05

20.0%

12.5%

7.5%

9.4%

2Q26A

-295

227

YoY

13%

-46%

15

242 -34% -70%

-35

207| -34% -65%

1.35

-34% -65%

15.0%|

-5.1ppt

1.7ppt|

6.5% -6.0ppt 0.3ppt

8.5% 1.0ppt 1.4ppt

-230|

200|

604

804

-211|

594

3.89

13.3%

6.296

7.1%

18.3%

5.9% -3.4ppt -123ppt|

€ 2N26 Citiceoun Ins Mo radictribution without Piticeoun'curitton

Prepared for Kevin Lu

Citi

Estimate

3,512

-2,885

627

-249

378

50

428

-65

363

Diff.

-1%

-17%

-40%

-43%

-43%

2.37

-43%

17.9% -29ppt

10.8% -4.3ppt|

7.1%

1.4ppt

10.3% -4.4ppt narmiccinn

BBG

Consensus

3,847

787

-237

550

29

579

-134|

446

2.90

20.5%

14.3%

6.2%

11.6%

Diff.

-9%

-34%

-59%

-58%

-53%

Figure 1. 2Q26 Preliminary Results Comp

© 2026 Citigroup Inc. No redistribution without Citigroup's written permission.

Source: Bloomberg, Citi Research, Citi Research Estimates

Prepared for Kevin Lu

Dynapack International

Valuation

We assign a 32x target P/E to our 2027E EPS of NT$25 to derive a target price of NT$800. We value Dynapack based on 2027E target P/E as we believe 2027E better reflects its earnings power after BBU capacity expansion. Our target P/E of 32x is based on our forecast EPS CAGR of 66% in 2025-2027E and a PEG of 0.5x, which we benchmark against its major PSU partner, as we expect Dynapack to grow alongside its partner.

Risks

Our quantitative model assigns a High Risk rating to Dynapack. However, we believe such a rating is not warranted for Dynapack due to: 1) the company is generating solid revenue and earnings growth over next 3 years; the underlying industry, BBU for AIDC, also enjoys secular growth; 2) the business model that involves with product customization and strict safety/reliability requirements would imply relatively benign competition and therefore stable pricing and margins; and 3) the company has a strong balance sheet and has been in net cash position since 2019.

Key downside risks to our price target/rating are: 1) Slower-than-expected BBU adoption in AIDC, 2) Delay in PSU customer qualifications, 3) Competition from larger battery or power solution vendors, 4) Safety, certification and reliability issues.

Dynapack International (3211.TWO)

Analyst: Angela Hsu

If you are visually impaired and would like to speak to a Citi representative regarding the details of the graphics in this document, please call USA 1-888-500-5008 (TTY: 711), from outside the US +1-210-677-3788

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2024

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DJ F M

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Rating/target price changes above reflect Eastern Time

Prepared for Kevin Lu

Date

Appendix A-1

*Indicates Change