TAIWAN FIRST TO MARKET

Research evidence excerpt

TAIWAN FIRST TO MARKET

Asia Pacific Equity Research

Taiwan First to Market 28 July 2026

Top Stories

| ASUSTek Computer (Albert Hung) (2357 TT, N)

Servers strengthen, but PC headwinds cap upside; upgrade to Neutral

ASUSTek has traded broadly in line with TAIEX YTD (up 48% vs. the index up 52%), supported by better-than-feared PC

margin resilience and continued progress in AI servers. Looking into 2H26, we remain cautious on consumer PC demand as

well as channel VGA/motherboard shipments. That said, we believe ASUSTek can mitigate part of the margin headwind

through further pricing actions and mix optimization. On servers, we expect AI order strength to extend into 2H26, though

ASUSTek may not fully capture demand due to supply constraints. Net-net, we raise our 2026/27E earnings by 13%/20%, raise

our Jun-27 PT to NT$750 (based on 12x 12-month forward EPS, around mid-cycle valuation), and upgrade the stock to Neutral

from UW. We remain guarded on consumer electronics demand, and ASUSTek’s higher consumer exposure keeps us from

upgrading to OW. Within PCs, we prefer Lenovo given its superior scale and better product mix.

APAC Refining (Parsley Ong)

“Golden Age” is now consensus; raising 2026 GRM to $30/bbl as Houthis threaten product supply,

and exploring bull/bear scenarios

Asia diesel cracks have rallied from a bottom of $39/bbl in late June, to $81/bbl currently on the back of: (1) improved demand

for backup powergen due to El Niño; (2) rising LNG prices as Europe rushes to refill storage and China re-enters the LNG

market, and (3) renewed concerns on Middle East supply after the 17 June US-Iran ceasefire was declared “over” on 8 July.

Houthi’s attacks on Saudi Arabia’s refinery infrastructure over the weekend bring additional risk to the market, against a