UBS Maintains Buy on BizLink: Raised Credo Guidance Supports Uptrend in AEC

Overview

This report focuses on BizLink Holding and cross-reads the latest results and guidance from key customer Credo. Credo FY4Q26 revenue grew 7% QoQ, in line with guidance and consensus expectations; FY1Q27 revenue guidance is US$465-475m, implying 6-9% QoQ growth, above the previous mid-single-digit growth commentary and 2% above consensus. Based on this, UBS believes the uptrend in AEC demand remains intact and maintains its Buy rating on BizLink and target price of NT$3,430.

Core views

The core view is that broader AEC adoption among existing CSP customers, increasing demand from Neocloud customers, and stronger demand for 100G per-lane and 200G products will continue to support industry chain growth. BizLink supplies AEC and participates in ALC development, but does not supply the three categories of optical products mentioned by Credo. UBS expects BizLink's HPC sales to grow 75%/55% YoY in 2026/2027 respectively, mainly driven by upgrades in AEC data cables and power cables; it also expects gross margin to recover QoQ to prior 2025 levels, driving earnings growth of 35%/86% in 2026/2027.

Analysis framework

The analysis mainly uses a cross-reading of customer results: first observing Credo's revenue, gross margin, customer mix, and FY27 guidance, then mapping these to BizLink's exposure in AEC, HPC data cables, power cables, and ALC development. On valuation, the report maintains a target-price framework centered on 2027E PE multiples.

Methodology notes

• Valuation methodsPE Valuation Method

  30x 2027E PE

  UBS's target price of NT$3,430 is based on a 30x 2027E PE multiple, with a 12-month investment horizon.

• Industry Chain ValidationCustomer Results Cross-Reading

  Use Credo's results and guidance to validate BizLink's AEC demand

  The report uses Credo's FY4Q26 revenue, FY1Q27 guidance, FY27 growth outlook, customer mix, and product upgrade pace as important external signals for assessing BizLink's AEC- and HPC-related demand.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• BizLink Holding (3665.TW)

  Covered company; beneficiary of upgrades in AEC data cables, power cables, and HPC-related products.

  Strengths

  It has capabilities in interconnect solutions, connectors, wire harnesses, and cables, with 34 production facilities across Asia, the Americas, and Europe; UBS expects its HPC sales and earnings to maintain high growth.

  Weaknesses

  It does not supply the three categories of optical products mentioned by Credo, so some growth signals need to be validated through demand for AEC and power cables before flowing through to BizLink.

  Comparison

  Compared with Credo, which directly benefits from AEC and optical products, BizLink is more exposed to AEC data cables, power cables, and interconnect solutions.

  Risks

  Global economic slowdown, weakening end demand, slower-than-expected product mix changes, weaker-than-expected gross margin expansion, and rising raw material prices.

• Credo

  A key customer and demand bellwether for BizLink; its results are used to cross-validate AEC demand trends.

  Strengths

  FY1Q27 revenue guidance is above consensus expectations, management expects full-year FY27 sales growth of over 80%, and remains optimistic about AEC adoption by existing CSP and Neocloud customers.

  Weaknesses

  Customer concentration is relatively high, with the top four customers contributing 34%, 27%, 16%, and 10% of sales respectively.

  Comparison

  Credo's guidance on AEC and optical products provides leading signals for demand in BizLink's industry chain, but BizLink's product exposure is not exactly the same as Credo's.

  Risks

  The pace of Rubin platform deployment, individual customer strategies, the transition from 100G to 200G per-lane, and the timing of the 1.6T upgrade may affect demand realization.

Key data

• 12-month target priceNT$3,430.00Based on 30x 2027E PE.
• Current priceNT$2,195Price date is June 2, 2026.
• Implied upsideabout 56.3%Estimated from target price of NT$3,430 relative to current price of NT$2,195.
• Credo FY4Q26 revenue growth+7% QoQIn line with company guidance and consensus expectations.
• Credo FY4Q26 gross margin68.3%, down 0.3ppt QoQAbove guidance and consensus expectations.
• Credo FY1Q27 revenue guidanceUS$465-475m, implying +6-9% QoQAbove the previous mid-single-digit growth outlook and 2% above consensus expectations.
• Credo FY27 full-year sales growth outlook>80%About half driven by copper cables, mainly AEC; about half driven by optical products, including FY27 US$600m.
• BizLink HPC sales growth forecast2026E +75% YoY / 2027E +55% YoYMainly driven by upgrades in AEC data cables and power cables.
• BizLink earnings growth forecast2026E +35% / 2027E +86%Driven by HPC growth and gross margin recovery.
• BizLink production facilities34Located across Asia, the Americas, and Europe.

Impact & implications

The report has positive investment implications for BizLink: Credo's raised revenue guidance and broader AEC adoption provide external validation for demand upgrades in BizLink's AEC data cables and power cables; if BizLink's gross margin recovers as expected, earnings elasticity could further expand in 2027. It should be noted that BizLink does not supply the three categories of optical products mentioned in the report, so the transmission of optical product growth to BizLink is not entirely direct.

Risks

• A global economic slowdown may affect end demand.
• Slower-than-expected product mix changes may lead to slower-than-expected gross margin expansion.
• Rising raw material prices may compress profit margins.
• There is uncertainty in the global macro environment, exchange rates, interest rates, and commodity price inflation.
• The upgrade pace of AEC and 1.6T products depends on Rubin platform deployment and individual customer strategies.
• BizLink does not supply the three categories of optical products mentioned by Credo, so the transmission of optical product growth to BizLink is indirect.

What to watch

• Whether Credo FY1Q27 revenue reaches the guided range of US$465-475m.
• The pace of AEC adoption by existing CSP customers and Neocloud customers.
• Demand for 100G per-lane products, new demand for 200G per-lane, and the pace of transition from 800G to 1.6T.
• Whether BizLink's HPC sales can achieve 75%/55% YoY growth in 2026/2027.
• Whether BizLink's gross margin can recover QoQ to prior 2025 levels.
• The FY2H27 revenue inflection point referenced by Credo management, as well as progress in ZeroFlap optics, PICs, and optical DSP.
• Whether the ALC solution begins volume ramp-up in early FY28 as expected by management.