PixArt (3227 TT, NT$223.00) - Improved mouse fundamentals amid PC headwinds

Research evidence excerpt

PixArt (3227 TT, NT$223.00) - Improved mouse fundamentals amid PC headwinds

ted to grow double digits QoQ.

For the others segment, standard CMOS products used in surveillance and drone

What’s changed

applications are seeing growth momentum, with revenue expected to increase by teens New Old %

Rating Neutral Neutral QoQ. GM is expected to stay at 58%~59% while OPEX is expected to remain stable, and

Target price (NT$) 200 200 0 net margin is expected to improve to ~20%. We thus forecast 2Q26 revenue of NT$2.55bn,

EPS forecast (NT$) 10.9 12.24 -11 GM of 59.6%, OpM of 23.2%, and EPS of NT$3.72.

Target PE (x) 18.4 16.3

Financial summary Year-end: Dec 31 Improved fundamentals in mouse business

NT$mn FY25 FY26F FY27F The management noted that despite the flattish PC market, PixArt’s mouse business has

Net sales 9,127 8,824 10,400

grown over the past 2 years, mainly driven by rising contribution from high-end and gamingYoY growth (%) 9.1 -3.3 17.9

Op. profit 1,891 1,646 2,230 mouse shipment while conventional mouse demand remains flat. The management thus

YoY growth (%) 7.6 -12.9 35.5 maintains a positive outlook on the gaming mouse business, which is expected to mitigate

Net profit 1,812 1,595 2,085

the PC market headwinds and support margins. However, we remain cautious on the

YoY growth (%) -0.2 -12.0 30.7

EPS (NT$) 12.38 10.90 14.27 gaming console business in FY26, as Nintendo planned price hikes and guided a YoY

DPS (NT$) 10.1 6.5 8.6 decrease in FY27 shipment. In terms of physical AI opportunities, the management

PE (x) 18.0 20.5 15.6 highlighted the trend of integrating AI functions into sensors. PixArt is actively developing

PB (x) 3.1 2.9 2.7

Div. yield (%) 3.3 2.9 3.8 related products and expects revenue contribution in the future. As TDI sensors have