Elite Material Co: Already dominating, but lead over the rest still widening

研报英文原文证据摘录

Elite Material Co: Already dominating, but lead over the rest still widening

W, covered by Parsley

Ong), may secure qualification sooner than EMC, due to the difference in Quarterly Forecasts (FYE Dec)

timing for sample submission. However, as the rolling tests will be conducted Adj. EPS (NT$)

well into 3Q, we believe EMC is still in a strong position to retain its role as the 2025A 2026E 2027E

main supplier of leading-edge CCL materials. Contrary to most investors’ Q1 10.01 14.90A 41.03

Q2 10.02 25.56 47.21

views, we believe the main challenge for backplane isn’t the board’s Q3 11.19 30.80 54.40

manufacturing yields, but whether the CCL material can deliver the required Q4 10.63 35.05 60.16

electrical performance. We hold an optimistic view on the electrical FY 41.86 106.31 202.80

performance of M10 (one or more submitted samples will likely pass), even

Style Exposure

ahead of the conclusions of the ongoing tests.

• Maintain OW; lift PT to NT$6,800; rerating appears promising. We lift our

2026/2027e EPS by 14/15%, on all-around strength in high profile AI projects,

plus faster-than-expected GM expansion, driven by rising CCL prices and

further improving mix. We believe 2Q margin will come in stronger than

expected (33% vs market expectations of 28.5-31.5%) as price hikes for high-

end CCL start to take place (the implementation of new prices will last into 3Q).

In addition to price hikes, another overlooked driver starting in 2H could be the

shipment of M9 (and above; quartz based CCL), which offers meaningfully

higher margins vs high end M8s. While we believe the M9 demand outlook is

still overlooked by the market, we see strong potential for M9 revenue to make

up more than 10% of 2027e revenue on adoption of multiple AI-related

projects.