Summary of Elite Material Conference Call Company Overview - **Company**: Elite Material (Ticker: 2383.TW) - **Industry**: Technology, specifically in the PCB (Printed Circuit Board) and CCL (Copper Clad Laminate) sector - **Products**: CCLs and PP, with applications in communication devices, networking infrastructure, and 5G communication products [11][12] Key Points and Arguments Market Outlook - **AI PCB/CCL Shortage**: Anticipated shortages in the AI PCB/CCL sector starting from Q2 2026, driven by increased demand for new AI architectures [1][2] - **Earnings Forecast**: Earnings for 2026 and 2027 have been raised by 11.1% and 17.1% respectively, reflecting the expected growth in peripheral PCB/CCL content in new AI platforms [1][2] - **Target Price Increase**: Target price raised to TWD 2,330 from TWD 1,680, indicating a potential upside of approximately 34% [1][4] Growth Drivers - **Content Growth**: New CPU and scale-up switch boards for AI platforms are expected to drive an additional 30-50% content growth beyond mainboard growth starting from H1 2026 [2] - **Google's New Platforms**: Google's Ironwood platform, utilizing TPU v6p and new ASIC Axion CPU boards, is expected to significantly benefit Elite Material due to its large scale and expansion capabilities [2] - **Supply Chain Dynamics**: Google has provided strong forecasts for TPU demand for 2027-28, which is expected to positively impact all suppliers, including Elite Material [2] Competitive Position - **CCL Supply Shortage**: A severe shortage of T-glass CCL in ABF substrates presents an opportunity for Elite Material and other manufacturers to become alternative suppliers, as over 90% of current supply comes from Resonac [2] - **Capacity Expansion**: Elite Material plans to increase its CCL capacity significantly, with expansions in Taiwan and China, aiming for a total capacity of 8,100 k sheets/month by 2027 [15] Financial Performance - **Revenue Growth**: Projected revenues for FY25, FY26, and FY27 are TWD 94,242 million, TWD 128,360 million, and TWD 164,263 million respectively, reflecting substantial growth [3][16] - **Net Profit**: Expected net profits for FY25, FY26, and FY27 are TWD 14,450 million, TWD 22,062 million, and TWD 30,582 million respectively [3][16] - **EPS Growth**: Normalized EPS is projected to grow from TWD 41.21 in FY25 to TWD 86.29 in FY27, indicating strong profitability [3][16] Valuation Metrics - **P/E Ratio**: Current trading at 20x 2027F P/E, with a target multiple of 27x based on historical ranges [1][12] - **Dividend Yield**: Expected dividend yield to increase from 1.4% in FY25 to 3.0% in FY27 [3][12] Additional Important Insights - **Risks**: Potential risks include fluctuations in smartphone demand, slower progress in high-speed CCL/RCC, and unexpected share losses in AI server/switch markets [12] - **Sustainability Commitment**: Elite Material emphasizes sustainability in its operations, focusing on minimizing environmental impact and recycling materials [13] This summary encapsulates the critical insights from the conference call, highlighting the company's growth potential, market dynamics, and financial outlook.