Summary of Conference Call Notes Industry and Companies Involved - **Industry**: Greater China Technology Hardware - **Companies**: Delta Electronics Inc. (2308.TW), Lite-On Technology (2301.TW) Key Points and Arguments AI Server Power Solutions - AI server power solutions are expected to significantly contribute to revenue, projected to account for approximately 20% of total revenue for both Delta and Lite-On Tech in the current year [3][9] - Delta is anticipated to achieve a 25-30% operating margin from AI server power solutions due to its premium design capabilities and market share, while Lite-On Tech is expected to yield around a 15% operating margin, which is above its average [3][9] 800 VDC Power Offerings - The adoption of 800 VDC power systems is expected to be integrated into NVIDIA's Rubin Ultra platform, set for release in the second half of 2027 [4] - Delta is positioned as the leader in this segment, having already showcased relevant products at OCP 2025 [4] Earnings Estimates and Price Targets - Delta's earnings estimates for 2025, 2026, and 2027 have been raised by 12%, 17%, and 10% respectively, leading to a new price target of NT$1,235, reflecting a 36x P/E ratio for 2026 estimates [9][17][18] - Lite-On Tech's earnings estimates have also been increased by 12%, 25%, and 29% for the same years, with a new price target set at NT$150, implying a 17x P/E for 2026 [28][29][30] Financial Performance and Margins - Delta's net sales are projected to grow from NT$558.68 billion in 2025 to NT$861.40 billion by 2027, with gross profit margins improving from 35.5% to 37.3% over the same period [21][24] - Lite-On Tech's net sales are expected to increase from NT$167.28 billion in 2025 to NT$224.37 billion by 2027, with gross margins improving from 22.8% to 23.8% [33] Upcoming Catalyst Events - Delta's 3Q25 analyst meeting is scheduled for October 30, 2025, where margin growth and a positive business outlook for 4Q25 will be discussed [11] - Lite-On Tech's 3Q25 analyst meeting is on October 29, 2025, focusing on the margin accretive nature of AI server power offerings [11] Additional Insights - The implementation of 800V high-voltage direct current (800 VDC) systems is expected to enhance power conversion efficiency by approximately 5% compared to traditional systems [12] - Delta is favored over Lite-On Tech due to its anticipated 32% profit CAGR from 2025 to 2027, attributed to its technology leadership and timely market delivery [9] Other Important but Overlooked Content - The overall market sentiment for AI data center power solutions is positive, with expectations of margin expansion driven by design complexity and reliability requirements [1][3] - The financial models used for valuation include a multistage residual income approach, which accounts for the cost of equity and provides a more accurate valuation of the companies involved [19][30]