Parade Technologies (4966.TW) upgraded by Morgan Stanley to overweight, target price NTD 1000

Overview

Morgan Stanley's feedback post-Asian AI Summit 2026 highlights Parade Technologies as a key supplier in display solutions and high-speed interfaces. Display solution sales are projected to grow significantly, with high-speed interface business receiving design certification from server manufacturers, poised to accelerate penetration and become a new growth engine.

Core views

Parade Technologies is expanding its presence in display solutions, with TTED sales expected to rise from USD 30 million in 2026 to USD 60 million+ in 2027 and USD 100 million in 2028. The company has secured next-generation advanced-node display solutions and expanded its share in the tablet market. In the high-speed interfaces segment, it has achieved design certification and design win with server manufacturers, currently shipping in small volumes with mass production targeted for Q3-Q4 2026. Additionally, the company has shipped 56G retimers to Chinese cloud service providers and is targeting the 112G and 224G Ethernet redriver markets with U.S. cloud service provider clients. Based on incremental growth drivers from display solutions and high-speed interfaces, combined with design certification progress and production timelines, the institution expects significant revenue and profit improvements.

Analysis framework

The institution employs the residual income model for valuation, analyzing company performance growth from both demand (structural drivers from AI PC deployment) and supply (technological breakthroughs, design certification) perspectives. The core rationale involves revenue and profit expansion through increased display solution sales and higher penetration in high-speed interfaces, while using a beta coefficient (1.3) to assess systemic risks and ensure model robustness.

Methodology notes

• Valuation methodsResidual income model

  Residual Income Model

  This model calculates the present value of a company's expected residual earnings to determine its valuation, suitable for firms with stable profits and持续增长. It focuses on converting excess earnings into present value.

• Quantitative/ Factor/ Portfolio TheoryBeta Analysis

  Beta Coefficient Analysis

  The institution uses a beta coefficient (1.3) to measure a stock's systematic risk, indicating that its price volatility is 1.3 times the market average. This is used to compute the cost of equity.

Asset mapping & comparison

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

• Parade Technologies (4966.TW)

  Core supplier of display solutions and high-speed interfaces

  Strengths

  Strong market position in display solutions, design certification from server manufacturers for high-speed interfaces

  Weaknesses

  Risk of intensified competition in high-speed interfaces

  Risks

  Underperformance in Apple product shipments, delayed server platform launches

Key data

• Display Solution SalesUSD 30 million in 2026, USD 60 million+ in 2027, USD 100 million in 2028Significant year-over-year growth
• Target PriceNTD 100020% upside from current price of NTD 834
• Cost of Equity9.8%Beta 1.3, risk-free rate 2%, risk premium 6%

Impact & implications

Sustained growth in display solution sales and the upcoming mass production of high-speed interface products will significantly boost the company's revenue and profitability. If competition in high-speed interfaces does not intensify, this segment is expected to become a major growth driver in 2027-2028, supporting valuation increases.

Risks

• Underperformance in Apple product shipments
• Intensified competition in high-speed interfaces
• Delays in next-generation server platform launches