Bizlink Penang factory visit signals manufacturing capability upgrade; Nomura maintains Buy rating

Overview

This report is a quick note by Nomura after visiting Bizlink's Penang manufacturing base in Malaysia on 2026-06-29. It focuses on Bizlink's manufacturing capability upgrade, trends in customized power products, cross-site operational synergy, and the near-term impact of recent GDR/ECB financing on capital needs and potential dilution. Nomura maintains its Buy rating and TWD3,200 target price for Bizlink.

Core views

The core view is that the manufacturing upgrade at Bizlink's Penang base demonstrates the company is moving beyond producing generic connectivity and power components and is evolving toward higher engineering content, higher specifications, and stronger system integration capability. Automation, robots, paperless processes, clean-room processes, and UV particle inspection capabilities reflect rising manufacturing requirements for next-generation liquid-cooling infrastructure and high-spec power products. Power products are becoming increasingly customized, with power whips in different connector orientations, junction box design, and multi-connector layouts showing that customer deployment needs are driving higher engineering content. Higher in-house production supports cost control by reducing dependency on third-party procurement and demonstrates deeper vertical integration capability.

Analysis framework

The report uses on-site research and management discussion, combining factory production lines, product types, manufacturing processes, capital financing disclosures, and valuation multiples. On valuation, Nomura uses 28x 2027F EPS of TWD114.26 to derive a TWD3,200 target price and compares it with the current share price, 2026/2027F P/E ratios, and the historical P/E range.

Methodology notes

• Valuation methodsP/E multiple valuation

  P/E multiple valuation

  Nomura's TWD3,200 target price is based on 28x 2027F EPS of TWD114.26; this multiple is above the midpoint of the company's 9.9-29.7x historical P/E range over the past five years.

• fundamental_researchsite visit

  site visit

  The analyst visited Bizlink's Penang manufacturing base, observing production lines, processes, automation, product mix, and management commentary on operational excellence.

• risk_assessmentdownside risk review

  downside risk assessment

  The report lists downside risks including weaker-than-expected recovery in EV, automotive OEM, and automation demand, slower-than-expected demand growth for AI servers and SPE, supply-chain pricing pressure, and risks from materials, energy costs, and global tariffs.

Asset mapping & comparison

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

• Bizlink 3665.TW

  core covered name

  Strengths

  Penang base manufacturing expansion with higher automation, paperless processes, robotics, 3D printing, and standardized process upgrades; enhanced high-specification power products, liquid-cooling infrastructure, high-speed cable, and system integration capability; higher in-house production reflecting stronger vertical integration.

  Weaknesses

  Financing needs have increased recently, and GDR/ECB could lead to equity dilution; part of growth still depends on the monetization of AI servers, SPE, EV, and automotive customer demand.

  Comparison

  Current stock price corresponds to 31.5x/17.5x 2026/27F EPS; the target price applies 28x 2027F EPS, a multiple above the midpoint of the five-year historical P/E range.

  Risks

  Slower-than-expected recovery in EV and automotive OEM demand, AI server and SPE demand growth below expectations, supply-chain price pressure, rising material and energy costs, and global tariff-driven supply-chain disruptions and weaker demand.

Key data

• Report date2026-07-05The cover page date is 5 July 2026.
• RatingBuyNomura maintains a Buy rating.
• Target priceTWD 3,200.00The target price remains unchanged.
• Close priceTWD 1,995.00The price date is 2026-07-03.
• Implied upside60.4%Calculated from TWD3,200 target price versus TWD1,995 current price.
• Valuation basis28x 2027F EPS TWD114.26Nomura's target price methodology.
• 2026/2027F EPSTWD63.34 / TWD114.26The report states the current price corresponds to 31.5x/17.5x 2026/27F EPS.
• Penang site employeesabout 5,000Approximately 2,000 three years ago; Plant 1 was built in 1999 and Plant 2 in 2023.
• GDR issuance size4.5-6.0 million sharesAbout 2.3%-3.0% of the current 195 million shares outstanding and publicly floated.
• Max ECB issuanceUSD500mnIf fully converted, assuming a 20% premium to the current share price, this could add 6-7 million shares.

Impact & implications

For investment implications, the site visit strengthens the thesis that Bizlink benefits from rising demand for high-specification power products, AI servers, liquid-cooling infrastructure, and system integration. Improved manufacturing processes and higher in-house production could improve supply-chain control and cost management; however, GDR/ECB financing indicates rising capital needs for raw materials and components, so in the near term it is important to monitor potential equity dilution, financing structure, and whether follow-on bank borrowing is used to reduce dilution pressure.

Risks

• Demand recovery from major EV customers, other automotive OEM customers, and automation customers is slower than expected.
• AI server and semiconductor production equipment demand growth is slower than expected, and supply-chain price pressure has intensified.
• Materials and energy costs are rising.
• Global tariffs could cause supply-chain disruptions and weak consumption demand.
• GDR/ECB issuance may cause equity dilution, with the ultimate impact depending on financing structure and subsequent bank loan arrangements.

What to watch

• Final GDR and ECB issuance size, conversion terms, and actual dilution level.
• Whether bank financing is further announced to support capital needs for materials and component procurement.
• The pace of demand growth for AI servers, liquid-cooling infrastructure, and SPE.
• Penang Plant 2 ramp-up, changes in in-house production rate, and effectiveness of replicating standardized manufacturing processes.
• Whether demand recovery from EV, automotive OEM, and automation customers is occurring as expected.