Pegatron Corp (4938 TT) Reduce: Meaningful turnaround not yet reached

研报英文原文证据摘录

Pegatron Corp (4938 TT) Reduce: Meaningful turnaround not yet reached

l took up c70% of Pegatron’s revenue in 2026. We expect related 93.00

revenue to face further downside risks considering the inflationary environment and its

73.50

negative impact on consumer purchasing intent.

54.00

Server picking up, but continued investment could cap margins: Management 05/25 11/25 05/26

indicated its server business delivered more than 10x growth in 1Q26 from a low base. Target price: 58.00 High: 89.00 Low: 68.30 Current: 81.80

However, we estimate its contribution to revenue is still limited (3-4% of 2026 total). Source: LSEG IBES, HSBC estimates

Moreover, management indicated that server business has yet to reach an ideal

operating scale and there could be increasing opex after the upcoming Mexico and US Carol Juan*

plants ramp up. We believe it remains an uncertainty for margins. On the other hand, its Analyst, Technology HSBC Securities (Taiwan) Corporation Limited

Kinsus subsidiary should benefit from ABF price-hike opportunities carol.cc.juan@hsbc.com.tw

(see ABF substrate: AI upcycle is just beginning, 27 April 2026). As of 1Q, Kinsus +886 2 6631 2862

already accounted for c5% of Pegatron’s revenue and c22% of gross profit. Given the Lorraine Ou*

Research Associate

ABF upcycle, we expect an increasing contribution from Kinsus while Pegatron’s main HSBC Securities (Taiwan) Corporation Limited

business remains muted. lorraine.yt.ou@hsbc.com.tw

+886 2 6631 2867

Maintain Reduce with TP of TWD58.00 (from TWD54.00): We lower EPS by c17% in

2026e and c8% in 2027e to reflect a conservative consumer-related outlook and robust * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

not registered/ qualified pursuant to FINRA regulations

ABF substrate demand.