First Read: Micro-Star International "Q126 margins beat; sustainability in..."

研报英文原文证据摘录

First Read: Micro-Star International "Q126 margins beat; sustainability in..."

ull in (c.45% of sales) ahead of component price hikes is likely 12/25E 7.38 7.38 0 6.75

to slow down from late Q226E, with gaming demand remaining muted with no clear 12/26E 7.98 10.75 35 7.51

product upgrades in sight. Our industry checks indicated gaming and consumer graphic 12/27E 8.22 9.24 12 9.36

card suppliers have not yet seen any cancellation/update for NVDA's RTX60 family but

Diana Chang

are reassessing full year targets considering next-gen might not debut until H227.

Analyst

Meanwhile, diversification into servers is still in progress. The company stated AI servers diana.chang@ubs.com

manufacturing will remain in-house and is setting up a new plant in Taiwan focusing on +886-2-8722 7335

AI servers and AIoT device production. We believe the server market has become

Randy Abrams

increasingly crowded, and it will take time for new initiatives to gain traction, while

ongoing capacity additions may pressure cogs before utilization ramps. We anticipate randy.abrams@ubs.com

some tractions with NVDA HGX/MGX server platforms but contribution is likely to +886-2-8722 7338

remain small at below low single digits of its total sales in 2026E/2027E.

Valuation:Refresh PT to NT$108

We lift estimates to reflect Q126 margin upside but have also factored in conservatism

on moderate sales growth for gaming/consumer into H226 and margin trajectory in

question after the lower-cost inventories are depleted as we believe its pricing uplifts

might be relatively mild compared to Asustek with more high-end models. We update

our PT to NT$108, based on 12x 2027E P/E multiple, which is at the mid-end of it

historical range of 6x-16x, considering slow earnings expansion. The stock is trading at