Arcadyan Technology (3596 TT, NT$184) - 1Q26 profit better than expected

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Arcadyan Technology (3596 TT, NT$184) - 1Q26 profit better than expected

se market. In

addition to the original Firewall Switch, enterprise-grade Wi-Fi Access Point shipment will

FY27 What's changed

begin in 2Q26. The average GM of enterprise products is higher than that of home

New Old %

Rating Buy Buy products, which will optimize the overall product mix. 3) Shipment to a new US customer

Target price 250 250 0 is expected to begin in 3Q26, mainly for high-spec XGS-PON fiber-related equipment,

EPS forecast 15.13 15.43 -2 but due to memory price issues, the customer is still confirming the final shipment timing.

Target PE 16.5 16.2

Inventory surges in response to memory stockingFinancial summary Year-end: Dec 31

NT$mn FY25 FY26F FY27F 1Q26 inventory rose to NT$19.2bn, up 32% QoQ. Memory costs now account for a high

Net sales 52,976 56,478 61,167 single-digit percentage. The impact of memory shortages and price increases on the

YoY growth (%) 8.2 6.6 8.3

company is as follows: 1) 1Q26 GM did not decline significantly because strategic stockingOp profit 3,500 3,733 4,199

YoY growth (%) 15.2 6.7 12.5 began in 2Q25, and low-cost inventory is expected to support through 2Q26. 2) The

Net profit 2,777 3,008 3,334 company continues to communicate with customers about cost pass-through, handled via

YoY growth (%) 11.7 8.3 10.8

direct price increases or quarterly settlement mechanisms. GM is expected to remain

EPS (NT$) 12.60 13.65 15.13

DPS (NT$) 9.0 9.5 10.5 stable in the coming quarters. 3) Due to DDR4 shortages and price increases, the

PE (x) 14.6 13.5 12.2 company is assisting customers in shifting product designs to the more stable DDR5

PB (x) 2.4 2.3 2.1 supply. Currently, memory price increases and supply stability in 3Q26 are the main

Div. yield (%) 4.9 5.2 5.7