Zhen Ding Technology Holding (4958 TT) (Buy) - Solid 1Q26 GM showing the power of AI

研报英文原文证据摘录

Zhen Ding Technology Holding (4958 TT) (Buy) - Solid 1Q26 GM showing the power of AI

Global Markets Research

Zhen Ding Technology Holding 4958.TW 4958 TT 12 May 2026

EQUITY: TECHNOLOGY

RatingSolid 1Q26 GM showing the power of AI Remains Buy

Target priceRising AI substrates, optical modules, and AI PCB/HDI Increased from TWD 510.00will structurally lift profitability; maintain Buy TWD 265.00

Action: Maintain Buy; raising TP to TWD510, implying ~25% upside Closing12 May 2026price TWD 407.00

We think Zhen Ding (ZDT)’s 1Q26 results that beat on its GM of 21.6%, +7pp y-y, -0.9pp q-q (vs

Bloomberg consensus/our est. of 16.6%/17.9%) with only 1.6% y-y sales growth illustrated that its Implied upside +25.3%

rising mix from IC substrates and server/optical comm (total c.20% in 1Q26, vs just 11% in 1Q25) is

indeed changing its profitability structure. The company raised its IC substrate sales growth Market Cap (USD mn) 13,827.5

guidance to 70%+ (from 60%+) for 2026E, and aims to double its server/optical comm sales in ADT (USD mn) 373.1

2026E. The company raised its capex guidance to TWD80bn+ for 2026E, from its prior est. of

TWD50bn+ in March, and plans to file an IPO of its substrate subsidiary, Leading (禮鼎) in the Relative performance chart

HKEX. We expect AI-related products will structurally lift ZDT’s profitability in 2026-28F, and hence,

we raise our earnings estimates by 22.6%/28.4% for 2026F/27F, by forecasting faster growth in IC

substrates and AI-related PCBs and optical modules. We maintain Buy and raise our TP to

TWD510, based on 23x 2028F EPS of TWD22.19 (from prior TWD265, based on 18x 2027F EPS

of TWD14.82). We move our earnings base to 2028F given ZDT's improved visibility on AI-related