廣發 Initiates Coverage, Calls 1820 Yuan for 欣興
Taiwan stocks rebounded strongly on the 28th, with foreign investors turning to thousand-yuan stocks holding above the quarterly moving average. ABF substrate maker 欣興 (3037) was initiated by 廣發 Securities with a Buy rating and a target price of 1820 yuan, a new high among institutional forecasts. JPMorgan and Citigroup Global Markets raised price targets to 1400 yuan and 1550 yuan respectively, while Morgan Stanley, Macquarie, Bank of America and Daiwa Capital set expectations ranging from 1500 yuan to 1775 yuan, showing broad foreign optimism on the AI substrate supply-demand outlook.
AI Substrate Market Seen Expanding
廣發 Securities is bullish on AI demand driving rapid expansion of the ABF substrate market, with high-end substrate prices continuing to rise. It estimates the global AI ABF substrate market will grow from 13 billion US dollars in 2027 to 18 billion US dollars in 2028, with 欣興 expected to capture over 30% market share. Driven by capacity expansion and product mix optimization, 欣興 revenue for 2026 to 2028 is estimated at 191.1 billion yuan, 3033 billion yuan and 402.2 billion yuan respectively, with EPS of 28.58 yuan, 60.75 yuan and 89.34 yuan, more than doubling over two years.
輝達 Names It as Partner
Morgan Stanley noted that 輝達 listed 欣興 as one of three partners at the Berlin GTC conference, and plans to expand related substrate capacity to 2.5 times the original level over the next three years. Capacity pre-booked by 輝達 may cover 欣興's Kuangfu II plant expansion plan scheduled to start in the second quarter of 2027, supporting high-end ABF demand in coming years.
嘉澤 Upgraded on Server Turnaround
Another favored stock, 嘉澤 (3533), was upgraded by Morgan Stanley to Overweight with the target raised to 2350 yuan. Morgan Stanley believes rising copper, gold and plastic raw material costs plus slower 新產 product ramp have pressured gross margin, but the third quarter may have been the low point with a rebound expected in the fourth quarter. 嘉澤 will benefit in the fourth quarter from volume ramp of AMD Venice CPU sockets, while Intel Oak Stream CPU sockets expected to ship in the first quarter of 2027 should help renegotiate prices and pass through costs. Industry checks show ODM server motherboard output, after a slight decline in the third quarter, is expected to resume growth in the fourth quarter, supporting shipments.