Sharp Upward Revision in EPS, Outlook Remains Optimistic
Latest forecasts show Taiwan stock EPS growth is estimated at 67.2% and 29.7% for 2026 and 2027 respectively, with first-half earnings reports and investor conferences generally beating expectations, the market continues to revise up EPS growth for 2026 and 2027, and the outlook for Taiwan stocks remains optimistic, with short-term sharp declines all seen as good entry opportunities. However, 2027 growth will slow from 2026, meaning index returns next year may not match this year, and investment style will shift from market-linked Beta to excess-return-seeking Alpha, which will be the era for small and mid-cap niche stocks to shine.
Oil Prices and Inflation Heat Up, Taiwan Stocks Fall Below Key Level
台新臺灣中小主動式ETF fund manager 沈建宏 said that amid renewed tensions in the Middle East, Brent crude futures recently topped 100 US dollars per barrel, and the newly released US September consumer price index rose to 3.7% year-on-year from 3.4% in August, above the market expectation of 3.6%, sharply raising market expectations for a Federal Reserve rate hike in October, hitting the four major US stock indexes to pull back sharply and also dragging Taiwan stocks below the 47000-point level. As Taiwan stocks had rebounded more than 4000 points in the prior wave, margin balances approached the prior high and returned above 6300億元, chips need to settle after large gains and willingness to chase prices may weaken, so October to November is expected to remain in a volatile pattern, focusing on individual stock performance, with small and mid-cap stocks with niche themes having relatively more room to perform.
AI Divergence Intensifies, Selective Stock Picking Becomes Key
沈建宏 pointed out that corporate earnings growth is often a bellwether for stock market gains, and companies with higher earnings growth also enjoy higher price-to-earnings valuations. Taiwan small and mid-cap stocks with AI supply chain advantages have strong earnings growth, and over the past three years their stock price surges far exceeded the broader market and large-cap stocks. The top 30 gainers in Taiwan stocks over the past three years were all stocks with capital below 80億, such as 奇鋐, 台光電, 旺矽, 台燿, etc. Looking at future performance, the broad AI rally is over, industries will diverge going forward, and with a higher base, growth will not match the early stage of development, making selective stock picking by managers even more necessary. Taiwan's first small and mid-cap active ETF, 台新臺灣中小主動式ETF, fund code 00416A, was approved for establishment on October 14, and institutional investors believe that investing in Taiwan small and mid-cap active ETFs can improve win rates and capture long-term market trends. Investments always involve risks, funds involve gains and losses, investors should read the prospectus carefully before subscribing, investors should carefully evaluate risks and be responsible for their own investment results.