Phison Electronics Corp_ Positive Read from Reported China YMTC NAND Price Hike for April

Summary of Phison Electronics Corp Conference Call Company and Industry - Company: Phison Electronics Corp - Industry: Greater China Technology Semiconductors, specifically focusing on NAND flash memory Key Points and Arguments 1. NAND Price Increase: YMTC's retail brand, Zhitai, plans to raise its channel price in April, potentially exceeding 10%, marking the third NAND player to announce a price hike since January, following SanDisk and Micron Technology [1][3] 2. Market Response: Following the news of the price hike, Phison's stock rose by 6%, while the TAIEX index remained flat, indicating positive market sentiment towards Phison amidst the price increase [1][3] 3. Supply and Demand Dynamics: The anticipated price hike is attributed to disciplined supply management, increasing demand for NAND in AI applications, and early pull-in due to US tariffs [1][3] 4. TrendForce Estimates: TrendForce revised its NAND pricing estimate for 2Q25 from a projected decline of 2.5% Q/Q to an increase of 2.5% Q/Q, reflecting a more optimistic outlook for NAND pricing [1][3] 5. Financial Metrics: - Phison's stock rating is Overweight with a price target of NT$688.00, representing a 14% upside from the closing price of NT$605.00 on March 14, 2025 [4] - Revenue projections for Phison are NT$58,936 million for FY24 and NT$69,404 million for FY25, with an expected EPS of NT$35.68 and NT$35.72 respectively [4] 6. Valuation Methodology: The valuation is based on a residual income model with key assumptions including a cost of equity of 9.0% and a medium-term growth rate of 7.5% [7] 7. Risks: - Upside risks include faster-than-expected growth in the SSD market and market share gains in ultrabooks [9] - Downside risks involve weaker-than-expected NAND demand and potential non-acceptance of price hikes on NAND modules [9] Additional Important Information - Market Capitalization: Phison's current market cap is NT$136,614 million [4] - Average Daily Trading Value: NT$1,418 million [4] - 52-Week Stock Range: NT$403.00 to NT$785.00 [4] - Analyst Coverage: The report includes multiple analysts from Morgan Stanley, indicating a collaborative research effort [3][4] This summary encapsulates the essential insights from the conference call regarding Phison Electronics Corp and the NAND flash memory market dynamics.