Bizlink (3665 TT) (Buy) - Profit margin contracts on HPC product transition

研报英文原文证据摘录

Bizlink (3665 TT) (Buy) - Profit margin contracts on HPC product transition

Global Markets Research

Bizlink 3665.TW 3665 TT 12 May 2026

EQUITY: TECHNOLOGY

RatingProfit margin contracts on HPC product transition Remains Buy

Target priceExpect the negative impact to gradually recede starting Increased from TWD 3,200.00from 2Q26F TWD 2,800.00

1Q26 EPS of TWD11.66 (-17% q-q/+41% y-y) lower than expected Closing12 May 2026price TWD 2,775.00

Bizlink reported 1Q26 sales of TWD20,857mn (+5% q-q/+29% y-y), with sales from HPC,

semiconductor production equipment (SPE), and automotive posting better q-q growth Implied upside +15.3%

(+4%/+19%/+9% by our estimate) than other end-applications. 1Q26 GM came in at

28.8% (-3.2pp q-q/-1.6pp y-y), while OPM was at 14.9% (-3.5pp q-q/+0.3pp y-y). The Market Cap (USD mn) 17,178.9

lower-than-expected GM was dragged by HPC’s generational transition between new and ADT (USD mn) 247.8

old platforms that caused temporary, negative effects on product mix and utilization, along

with automotive and factory automation (FA) segments’ significant demand recovery Relative performance chart

(automotive and FA’s average GMs were lower than that of HPC, by our estimate).

Earnings call highlights

Management updated on the operating situation and shared its outlook on 12 May. (1)

Views on profit margin: Management noted that 1Q26’s GM weakness was mainly

caused by product transition in HPC, rather than structural changes. During 1Q26, there

were some generational product transitions that resulted in lower shipment volumes and

unfavorable production efficiency. It expects corporate margins to improve once the

aforementioned issues are resolved gradually during 2026E. The current margin level