Wistron (3231 TT) Buy: Margin recovered faster than expected with further improvement set for 2026 [Correction]

Research evidence excerpt

12 November 2025

Wistron (3231 TT)

Equities

Computers & Peripherals

Buy: Margin recovered faster than expected with further

improvement set for 2026 [Correction]

Taiwan

◆ 3Q25 margin beat on better GB200 assembly yield rate, while

EPS missed HSBCe on interest expenses and FX losses

MAINTAIN BUY

◆ AI servers business has reached a more profitable level in

2H25, further supporting upside to 2026e earnings

◆ Maintain Buy, raise TP to TWD180 (from TWD138); TP

implies 29.5% upside

3Q25 results first take

Gross margin up 296bp sequentially q-o-q to 7.4%, higher than both HSBC/

Bloomberg consensus estimates of 6.3% and 6.1% given higher contribution from

Wiwynn’s 3Q25 results (see Wiwynn: 3Q25 margin beat; we continue to see upside

from AI servers and general servers, 7 Nov) and a better yield rate with the GB200

servers assembly. Operating margin was up 282bp q-o-q to 4.8%, higher than both

HSBC/consensus estimates of 3.7% and 3.6%. Opex ratio at 2.6% was in line with

HSBC estimates but higher than consensus of 2.5%. However, due to escalated

interest expenses and FX losses, the EPS of TWD2.36 missed HSBC estimates by

10% but was in line with consensus.

4Q25 continues to grow with AI servers; margin outlook the major surprise

Despite PC shipment likely to be down 5-10% q-o-q in 4Q25, management expects a

further ramp-up of GB300 rack in 4Q25. Wistron assembles L10 servers for Dell’s

GB200 and GB300 servers, with demand turning stronger in 4Q25 due to the ramp

up of GB300. Additionally, management expects Wistron’s GM and OPM (excluding

Wiwynn) to further improve q-o-q in 4Q25 and onwards, mainly supported by rising AI

servers’ contribution (AI servers’ profitability has improved and it’s currently higher

than Wistron’s traditional PC businesses’ profitability). Looking forward, although PC

and traditional enterprise server’s growth remains tepid in 2026, we believe Wistron

can still deliver 28% revenue growth in 2026 driven by AI server, Wiwynn (6669 TT,

CMP TWD4,560, Buy), and potential upside from networking switches in 2026e.

Overall, we expect Wistron’s OPM to increase to 4.5% in 2026 based on a better

economics scale vs. consensus of 3.4%.

Maintain Buy

…