Structurally strengthened margin/demand outlook on BT/ABF substrates

研报英文原文证据摘录

Structurally strengthened margin/demand outlook on BT/ABF substrates

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Technology Hardware - Taiwan

Structurally strengthened margin/demand

outlook on BT/ABF substrates

Price Objective Change

QTD numbers suggest more concrete OP improvements 30 June 2026

NYPCB (Nan Ya Printed Circuit Board) posted May EPS yesterday post market close, with Equity

its QTD (quarter-to-date) pretax/net profits reaching 81%/76% of 2Q26 consensus Taiwan

estimates. As for Kinsus, it posted May EPS last week, with the number representing Tech Hardware

39%/48% of pretax/net profits by referencing 2Q26 consensus. Given the relative Mike Yang >>

strength in TWD (vs USD) in 2Q26 (Exhibit 6), we suspect limited boosts from FX Research Analyst

(foreign exchange) gain at non-operating level, which implies a more concrete Merrill+886 2Lynch2376 (Taiwan)3729

improvement of OpM (operating margin) for these companies. mike.c.yang@bofa.com

BT substrate: benign margin/pricing outlook on S/D

AI - artificial intelligenceOn BT (bismaleimide triazine) substrate side, we see the capacity constraint across the

supply chain, given 1) the supply squeeze of T-glass cloth (prioritized for AI server); and OP – operating profit

2) the strategic focus shift to ABF (Ajinomoto build-up film) substrate by certain industry

participants. We thus expect benign margin/pricing outlook for BT substrate, which CoWoS – chip on wafer on substrate

accounts for ~25%/40+% of total revenue for NYPCB/Kinsus. For the demand outlook,

S/D – supply/demandwe see positives from 1) continuous capacity expansion by (see reports) Micron; and 2)

the W800tn investment for new memory cluster in the long run. Exhibit 1: Summary of PO change

We raise PO on NYPCB/Kinsus in this report