Record Q3 Profit, Shares Close Higher for Two Consecutive Days
Copper-clad laminate maker ITEQ (6274) hit limit-down intraday on October 27, becoming the market focus, then closed higher on the 28th and 29th, with a cumulative two-day gain of 8.59%. The company reported Q3 results with quarterly EPS of NT$12.88, a new high. Q3 revenue reached NT$17.95 billion, up 25.5% QoQ and up 122.6% YoY, with gross margin at 36.9%, up 7.2 percentage points QoQ and up 13.2 percentage points YoY, beating analysts' prior estimate of 31.2%. Analysts noted the better-than-expected gross margin mainly reflected price-hike effects, with low-end product price increases contributing most significantly.
Product Mix and Operating Profit Strengthen Together
By product mix, ELL extremely-low-loss and SLL super-low-loss together accounted for 38%, VLL very-low-loss and LL low-loss accounted for 28%, HDI high-density interconnect and N-LL general next-low-loss accounted for 19%, and other products accounted for 15%. Q3 operating profit reached NT$5.57 billion, up 65.8% QoQ and up 340% YoY, beating analyst and market expectations. Overall, price-hike benefits and product-mix optimization drove simultaneous growth in revenue and profit.
Price-Hike Trend to Extend From Q4 Into Next Year's Q1
Looking to this year's Q4 and Q1 2027, fiberglass cloth and copper foil prices will continue to be raised, low-end CCL is expected to continue reflecting selling prices, and for high-end CCL, peers also expect further pass-through of raw-material quotations, keeping the overall pricing environment favorable for CCL makers. ITEQ's Thailand plant is expected to add about 100,000 sheets of capacity. Analysts raised its Q4 and Q1 2027 revenue forecasts to NT$21.26 billion and NT$21.96 billion, with gross margins of 37.4% and 37.7%, operating profit of NT$6.71 billion and NT$6.93 billion, net profit of NT$4.71 billion and NT$4.86 billion, and EPS of NT$15.71 and NT$16.22, respectively.
Looking to 2026 and 2027, low-end CCL price-hike effects will continue, M7-and-above application expansion will keep improving, AI servers will upgrade toward M8 and above, and the 1.6T switch upgrade cycle, in both market size and adoption speed, is expected to surpass the 800G upgrade cycle of the past two years, further driving specification upgrades. Low-earth-orbit satellites are another growth driver, currently mainly ground-terminal versions, with the spaceborne version already sent for certification and expected to contribute in H1 2027, and the spaceborne specification at M7 and above, which favors product mix. On valuation, analysts raised 2026 and 2027 revenue forecasts to NT$63.57 billion and NT$105.69 billion, with EPS forecasts of NT$41.07 and NT$79.98, respectively, applying a 24x P/E to 2027 estimated EPS to derive a target price of NT$1,900, maintaining a Buy rating.