BizLink重申买入：铜缆与光缆共同发展受益者；目标价新台币3,088元

developmentbeneficiary;POofNT$3,088ReiterateRating:BUYIPO:3,088TWD|Price:2,425TWD Enjoyingcopper/optical dual engines;aclearAlplay developmentforAl,supportedbyvariouspositivecommentsfromCorning (see2oAprilnote), Credo (see 15 April note), and peer Amphenol (see 9 April note). With close to 50% of 4Q25 sales from HPC, we expect BizLink's HPC sales to reach 50%+/60%+/65%+ in2026/27/28. Within HPC, we expect better-margin power products to be the key driversupporting overall margin expansion in the following years.We are also not concernedabout rising copper/gold/plastic costs weighing on BizLink's margins, as the companyshould be able to pass through costs for high-end Al products.Copperandopticalcable/connectorco-developmentforAlIn our view, copper and optical cables/connectors are likely to co-exist and develop in KeyChanges future Al generations, rather than optical fully replacing copper. We see that copper cables are suitable for shorter distances (e.g. in Al rack; below 1O meters; scale up) underongoing product upgrades (e.g.from DAC to AEC),relatively lower costs vs.optical,andstill good signal integrity and stability. Optical cables are under development, but shouldbe a good fit for longer distances (e.g. scale out) and 1.6T+ applications.Lift PO to NT$3,088; reiterate Buy +886 2 2376 3722doris.kao@bofa.comRobert Cheng>>Research AnalystMerrill Lynch (Taiwan) +886 2 2376 3731robert.cheng@bofa.comKatherine Zhu >>Research Analyst We lift 2026-28EEPSby 1-20% to reflect 1Q26 preliminary sales and highersales/margin driven by solid Al demand.We raise our PO to NTS3,088 (30x2027E EPS) fromNTS2.050(24x2H26-1H27EEPS).Wenowuse30xP/EonBizLink'sfavorableposition to capture both copper and optical Al opportunities. 3Ox is below global leaderAmphenol's32x (given smaller sales scale),but overTEConnectivity's23x(given higherAlexposure).We use2027as valuation baseto align withglobal peers.We reiterate Buyon BizLink in view of dual copper/optical growth engines and potential room for upwardestimates revision in coming quarters. It plans to hold 1Q26 earnings call on 12 May.Estimates (Dec) (NTS)2024A2025A2026E2027E2028E Merill Lynch (Hong Kong)+852 3508 3374kexin.zhu@bofa.comCindy Lo >>Research Analyst Merrill Lynch (Taiwan)+886 2 23-763-723cindy.lo3@bofa.com Price This research report provides general information only. No part of this report may be usedorreproducedorquotedinanymannerwhatsoeverinTaiwanbythepressorotherpersonswithouttheexpresswrittenconsentofBofASecurities.>> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analyst under the FINRA rules.Refer to'Other Important Disclosures'for information on certain BofASecurities entities that take responsibility for the information herein in particular jurisdictions.BofASecuritiesdoesandseekstodobusinesswithissuerscoveredinitsresearch reports.Asa result,investors shouldbeawarethat thefirm mayhave aconflict ofinterest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.Refer to important disclosures on page 12 to 14. Analyst Certification on page 9. PriceObjective Basis/Risk on page 9.12961477 Acronyms, see Exhibit 17 iQprofile s" BizLinkKey Income Statement Data (Dec) Connectors,Passive Components&Distribution BizLink is a global interconnect solutions provider, making products like cables, wire harnesses connectors, etc.BizLink's key business segments are IT DataCom (43% of2025 sales),Industrial (34%), Automotive (11%), andElectrics Appliance (11%). BizLink is headquartered in theSilicon Valley, California, US. Globally, it has 40 productionsites post INBG acquisition in 2022. It was founded in 1996and was listed on the Taiwan Stock Exchange in 2011. We assign a Buy rating to BizLink in view of (1) cable/connector volume/content increase under strong Alserver market demand and rising computing power,(2)BizLink's solid delivery in better-margin HPC business, (3)solid partnership with Credo for AEC business andexpansion into optical business, (4) industrial businessbottoming out, (5) ongoing margin expansion withimproving mix. Stock Data Price to Book Value8.1x Key Metrics Reiterate Buy with higher PO of NT$3,088We lift 2026-28E EPS by 1-20% (Exhibit 1) to reflect 1Q26 preliminary sales (+5% QoQ, +29% YoY; 2% below BofAe; Exhibit 3) and higher sales/margin driven by solid Aldemand.Weraise 0urPO toNT$3,088 (30x2027EEPS)fromNT$2,050 (24x2H26-1H27EEPS) with higher P/E multiple and valuation rollover. We now use 3Ox P/E, which is at itsrecord-high P/E level (Exhibit 12), but within global peers Amphenol and TEConnectivity's P/E target range of 23-3Ox (both covered by our US analyst WamsiMohan), in view of BizLink's favorable position to capture both copper and optical Alopportunities.3Ox is below global leader Amphenol's 32x given smaller sales scale(Exhibit 4 and Exhibit 5) and relatively lower margin profiles (Ex