亚太半导体 - PC无晶圆厂企业——1Q26财报电话会议后对利润率保持谨慎

PC fabless–stay cautious on marginprofiles following 1Q26 earnings calls Price Objective Change Negativeread-through for PC interface names on 1Q data 12 May2026 During the 1Q26 earnings calls, weobserved a sluggish demand outlook (toward end-2026) from fabless companies with heavy exposure to the PC market, and these includeASMedia and Parade. On a negative note, we see both names’gross margins beingpressured by rising production costs amid an inflationary environment, particularly from EquityAsia-PacificSemiconductors Mike Yang>>Research AnalystMerrill Lynch (Taiwan)+886 2 2376 3729 ASMedia:reit. Neutral with PO rising to NT$1,750 ASMedia’s 1Q26 GM was pressured by inflationary manufacturing costs (includingpackaging/assembly), which in our view will continue to weigh on its margin profile into2H26, alongside subdued demand across its ODM (original design manufacturer) andown-brand businesses (given the impact of surging memory prices). To elaborate,management cited a 15-20% YoY drop in 2026 demand from MB (motherboard)-relatedbusiness, including AMD chipsets. Further, such impact on DIY (do-it-yourself) market(from memory prices) is expected to persist through at least 1H27. Across thecompany’s product lines, PCIe (peripheral component interconnect express) switchseems to be one of the few bright spots, where ASMedia targets revenue contribution of Haas Liu>>Research AnalystMerrill Lynch (Taiwan)+886 2 2376 3727 Cathy Hsu>>Research AnalystMerrill Lynch (Taiwan)+886 2 2376 3726 Exhibit1:Summary of PO changeWe raise PO on ASMedia and Parade in thisreport Parade: stay U/P with PO moving to NT$520 For Parade, we adjust 2026-28E EPS by 3-10% after factoring in 1Q26 results and theupdated business outlook. Our new PO is NT$520 (was NT$440), which is now based on15x P/E (was 14x) as we expect its GM (gross margin) to mark the trough in 1H26, whilewe roll over the valuation base to 2H26-1H27E (from 2Q26-1Q27E). That said, weexpect only mild revenue/earnings growth (less than 10% YoY) during our forecastperiod, given the company’s high concentration to the PC (personal computer) market. This research report provides general information only. No part of this report may be usedor reproduced orquoted in any manner whatsoever in Taiwan by the press or otherpersons without the express written consent of BofA Securities. >> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analystunder the FINRA rules. Refer to "Other Important Disclosures" for information on certain BofA Securities entities that takeresponsibility for the information herein in particular jurisdictions. BofA Securities does and seeks to do business with issuers covered in its researchreports.As a result, investors should be aware that the firm may have a conflict 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 7 to 10. Analyst Certification on page 5. PriceObjective Basis/Risk on page 4. Exhibit3:Table of recommendationStocks mentioned with ratings in this report We raise 2026-28E EPS by 6-12% after baking in 1Q26 results and updated business outlook We are 8%/6% ahead of consensus for 2026/27E EPS, due mainly to the assumption of strongernon-op investment gain We expect the company’s revenue to drop by 2% in 2026, then followed by a mild recovery of 7% YoY in 2027 We are 3-12% below consensus for 2026-28E EPS, due mainly to our assumptions of softer revenue growth and gross margin Exhibit9:Income statement-ParadeWe expect the company’s gross margin to hover at40-41%, while recording single-digit% revenue CAGR during 2026-28 Price objective basis & risk ASMedia Technology Inc. (XZSFF) Our NT$1,750 PO is based on SOTP (sum of the parts) method, where we incorporate 1)18x 2027E P/E on its core business backed by 24% CAGR across 2026-28E, 2) the 11x2027E P/E that we apply on WT Micro, where ASMedia holds around 19% stake andgenerates investment gain, and 3) net cash per share of close to NT$80. We also seethat the valuation being underpinned by 1) ROE to recover to 25%/33% in 2027/28E and Upside risks are 1) higher USB controller revenue on the host side following the goodrecord in AMD bundle sales, 2) faster-than-expected recovery in AMD business whensubstrate supply becomes less a concern, 3) better-than-expected end-market demand inPC, given the digital transformation post the COVID pandemic. Downside risks are 1) slowdown in PC-related demand, where ASMedia has 80+%revenue exposure, 2) sustained foundry supply tightness, which may hurt productdelivery and gross margin, 3) share loss in the chip-design business for AMD due to Parade (PRDWF) Our PO of NT$520 is based on 15x 2H26-1H27E EPS, at the low-to-mid-end of itsvaluation range since late-2016. We think 15x is justified by a flattish ROE of 11-12% in Downside risks to our PO are (1) los