Wistron (3231 TT) Buy: Growth outlook intact with scaling L10/L11 business [Correction]

Research evidence excerpt

16 March 2026

Wistron (3231 TT)

Equities

Computers & Peripherals

Buy: Growth outlook intact with scaling L10/L11 business

[Correction]

Taiwan

◆ YTD monthly sales tracking ahead of Bloomberg consensus

MAINTAIN BUY

driven by robust L10 AI server shipments

TARGET PRICE (TWD)

PREVIOUS TARGET (TWD)

190.00

◆ Maintain Buy and TP of TWD190, implying 41.8% upside

SHARE PRICE (TWD)

UPSIDE/DOWNSIDE

134.00

+41.8%

Gross margin missed: 4Q25 gross margin of 5.6% missed HSBCe/ Bloomberg

consensus by 119bps/102bps, respectively, due to higher GB300 contribution from

Wiwynn after consolidation. Opex rate of 2.1% came in 71bps/52bps below HSBCe/

consensus. OPM of 3.5% missed HSBCe/ consensus by 48bps/50bps. Operating

profits of TWD25bn, down 6% q-o-q and up 115% y-o-y, was largely in line with HSBCe

and consensus estimates.

(as of 13 Mar 2026)

◆ We expect stable OPM in 2H26, increasing operating scale to

meet ramping AI server shipments from Dell and Wiwynn

Further upside from vertical integration: Wistron’s Jan-Feb monthly sales was

tracking 80% of consensus estimates. We note that Wistron’s largest L10 customer,

Dell, recorded another record-high backlog of USD43bn as of FY4Q26 (Feb-Q), which

is up 134% q-o-q with new order of USD34bn, up 180% q-o-q. Accordingly, Dell guided

its FY2027 AI revenue to reach USD50bn, up around 100% y-o-y, driven by demands

from across neo cloud, sovereign and enterprise customers. We estimate Wistron’s GB

rack shipments to grow by 99% y-o-y to 11k racks, with potential upside from AMD

MI455X Helios rack mass production at mid-2026, and Nvidia’s next-gen Vera Rubin

NVL72 as a major L10 assembler in 2H26.

Eyeing on dollar content instead of margins: Wistron’s standalone OPM declined

26bps q-o-q to 2.1% in 4Q25 due to AI server dilution. Given that Wistron charged a

fixed percentage of overheads based on the entire rack/server dollar content, we think

continued bottom line growth is sustainable based on rapidly ramping AI server

shipments. Additionally, we expect Wistron’s OPM (excluding Wiwynn) to remain at the

2% level in 2H26. Net-net, we revise up our EPS forecast by c2%/c14% in 2026/2027,

respectively, and a moderate OPM improvement trend vs.…