大中华区科技硬件：亚太：电源解决方案——聚焦利润率扩张幅度

Greater China Technology Hardware| Asia Pacific Power Solution – All Eyes onMargin Expansion Magnitude +886 2 2730-2865 Samantha ChenResearch Associate AI data center power solution value growth path is wellanticipated, including 800 VDC architecture. We expect thedesign complexity and reliability requirements to drive marginexpansion at Delta and Lite-on Tech, but as leader, Delta will Key Takeaways We estimate power value per watt will increase ~20% for power solution designin GB300 server racks, vs. GB200. 3Q25 earnings release and 4Q25 outlook guidance are key stock catalysts for We raise our 2025/26/27 EPS estimates for Delta by 12%/17%/10% to reflectfavorable mix shift, leading to a new PT of NT$1,235, 36x 2026e P/E and 30x2027e P/E. We also increase our 2025/26/27 EPS estimates for Lite-On Tech, by12%/25%/29% for AI server power project wins, and our PT to NT$150, implying17x 2026e P/E We prefer Delta over Lite-On Tech, as we expect Delta to see a 32% 3-year profitCAGR in 2025e-27e for its technology leadership and time-to-market delivery. AI server power should be margin accretive for both Delta and Lite-On Tech: Power design for AI server rack focuses on power wattage, power density, andconversion efficiency, with reliability an equally important requirement. Thus, weexpect both companies to benefit from AI server power offering increasing to ~20%of total revenue this year. We estimate a 25-30% operating margin contribution for 800 VDC power offerings the next to come:We expect 800V DC to be adopted inNVIDIA's Rubin Ultra platform, scheduled for 2H27. It requires cohesiveunderstanding of power architecture from the grid to the chip, with key offerings Morgan Stanley does and seeks to do business withcompanies covered in Morgan Stanley Research. As a result,investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of Morgan StanleyResearch. Investors should consider Morgan Stanley For analyst certification and other important disclosures,refer to theDisclosure Section, located at the end of thisreport. += Analysts employed by non-U.S. affiliates are not registeredwith FINRA, may not be associated persons of the memberand may not be subject to FINRA restrictions oncommunications with a subject company, public appearances Catalyst Event Preview Takeaways: •3Q25 margin should grow QoQ and YoY along with favorable product mix shift and scale benefits•4Q25 business outlook will be offered at the meeting. 4Q25 revenue likely beats seasonality withsequential uptrend for ongoing AI power and cooling shipments•Initial 2026 business outlook should confirm the ongoing value upgrade of AI power and coolingofferings Lite-On Technology2301.TW Takeaways: Clear AI Server Power Upgrade Path Implementing 800V high-voltage direct current (800 VDC) power systems willsignificantly reduce power losses compared to traditional AC-to-DC transitions andvoltage step-downs. According to NVIDIA, this design could improve power conversionefficiency by approximately 5% relative to conventional datacenter power systems. Delta: Earnings Estimate Changes We reiterate Delta as our Top Pick and raise our earnings estimates by 12% for 2025, 17%for 2026, and 10% for 2027 to reflect the increased content value driven by power Valuation Methodology We raise our price target from NT$1,111.00 to NT$1,235.00 (+11%): This reflects our higherearnings estimates for 2026-27e. Our price target implies 36x 2026e P/E. Our price target is our base case scenario value, derived from our multistage residualincome (RI) valuation model. Similar to our analysis of other tech hardware companies inour coverage, we use this methodology to value Delta because we think it provides themost accurate value for the stock by accounting for the cost of equity. We raise our Bull case scenario value – NT$1,510.00 (+11%): This implies 44x 2026e P/E. The increasereflects our higher EPS estimates vs. our previous bull case scenario. Bear case scenario value – NT$690.00 (+11%): This implies 19x 2026e P/E. Here, too, theincrease reflects our higher EPS estimates vs. our previous bear case scenario. Financial Summary Consolidated Balance SheetsNT$mn (Year End Dec) 202320242025E2026E Margins (%) Gross Margin31.835.5Operating Margin11.815.1Pretax Margin13.215.8Net Margin8.611.2 QoQ Growth (%) Lite-on Tech: Earnings Estimate Changes We raise 2025, 2026 and 2027 earnings estimate by 12%, 25% and 29%, respectively. Thisreflects higher cloud computing revenue from AI server power supply and higher margin Price Target Discussion and Valuation Methodology We raise our price target from NT$109.00 to NT$150.00: This reflects our higher earnings We derive our 12-month price target from our multistage residual income (RI) valuationmodel. Similar to our valuation analysis of other tech hardware companies in ourcoverage, we use this methodology to value Lite-On because we think it provides themost acc