Q3 revenue meets expectations, EPS reaches 6.32元
Substrate maker Unimicron (3037) reported 第三季 results on 10月27日, with quarterly revenue reaching 526.5億元, up 22.8% QoQ and 54.9% YoY, a revenue achievement rate of about 99%, broadly in line with expectations. Growth was still led by ABF and HDI, together accounting for about 80% of revenue, with utilization continuing to rise. On gross margin, due to an adjustment in employee compensation accrual ratio, prior bonus expenses were retroactively recognized in a one-time charge in 第三季, resulting in quarterly gross margin of 28.8%, below estimate. On non-operating items, interest income was 16.3億元 and financial valuation was about 4954萬元, with total after-tax profit of 100.5億元, down 23.4% QoQ and up 358.1% YoY, and EPS of 6.32元.
Q4 utilization to stay high, gross margin expected to rebound
Looking to 今年第四季 and 明年第一季, the brokerage expects ABF capacity utilization to stay high, with continued product mix optimization and HDI products starting to ramp, and a positive outlook thereafter. Among them, high-end ABF capacity utilization at the Kuangfu Yangmei plant remains above 90%, and with volume production of US-client GPU CPU products and product mix optimization from large-size high-layer-count products, profitability has improved markedly, with ABF gross margin expected to improve quarter by quarter. In addition, after new HDI equipment at the Luzhu plant moved in in 今年上半年 and was progressively tuned, shipments will increase in line with US-client shipment schedules, and optical module-related demand is also ramping. The brokerage maintains its 今年第四季 forecast, projecting revenue up 14% QoQ with gross margin at 31.9%.
明年 revenue estimated at 2946.8億元, EPS at 43.36元
The brokerage observes that starting 明年, as the ABF capacity shortage continues and the price cycle extends, and estimates 明年第一季 revenue up 4.6% QoQ with gross margin of 32.8%. After-tax profits for the two quarters are expected to reach 114.1億元 and 126.8億元, with EPS estimated at 7.17元 and 7.85元. As US-client HDI products start to ramp, ABF prices continue to rise, and optical modules enter mass production with 40到50% expansion expected in both 今 and 明年, the brokerage says the 明年 outlook for Unimicron remains positive, raising its 明年 revenue estimate to 2946.8億元, gross margin to 37.5%, and EPS to 43.36元.
P/E raised to 30倍, Buy rating maintained
On valuation, the brokerage believes Unimicron still possesses high-end process capabilities that will sustain its competitive advantage, and will benefit from tight high-end substrate supply-demand, product mix optimization, and new capacity coming online, with clear 今-明年 operating growth momentum. It therefore raised its P/E to 30倍, and based on 明年 estimated EPS derived a target price of 1300元, up from 1010元, maintaining a Buy rating. The above is for reference only; investors should judge independently, evaluate carefully and bear investment risks.