Jentech Precision Industrial Co. (3653): J.P. Morgan sees earlier removable-lid adoption extending Jentech’s AI cooling-content growth cycle.

Overview

This report assumes coverage of Jentech, a packaging-level cooling-component supplier, at Overweight. J.P. Morgan’s central thesis is that higher-spec AI-chip cooling designs should sharply raise Jentech’s content per chip through 2028, although its recent share-price rally leaves a more modest target-price upside than for other cooling-component names.

Core views

J.P. Morgan assumes coverage of Jentech at Overweight and sets a Dec-2027 target price of NT$7,500, based on 30x 2028E P/E. The report’s near-term catalyst is an earlier-than-expected transition toward the three-piece removable-lid design—removable lid, stiffener and multiple screws—in Nvidia’s Rubin platform. It expects small-volume Rubin trial production potentially from 4Q26 and mass production for Rubin Ultra potentially from 1Q27. Relative to the current one-piece lid, this design could raise heat-spreader/lid content by roughly 4–5x. The institution argues that an earlier schedule can create near-term revenue and earnings upside for the supplier. The report expects a solid 3Q26 followed by further growth into 4Q26 and 1Q27. It estimates 3Q26 revenue of NT$9.7 billion, up 33% quarter on quarter and 91% year on year, supported by Rubin GPU ramp-up. Rubin’s one-piece-lid shipments are expected to remain high-volume into 4Q26, while AMD’s MI450-series transition to a two-piece lid from 4Q26 is expected to add incremental growth; the report estimates roughly 10x content versus MI350. J.P. Morgan models 4Q26 revenue growth of 7% quarter on quarter, with additional upside if removable-lid adoption begins in Rubin and scales in Rubin Ultra. The longer-term thesis extends beyond the immediate GPU ramps. J.P. Morgan describes Jentech as the largest packaging-level cooling-component maker worldwide, with production strengths in heat spreaders, stiffeners and various lid designs. It expects approximately 80% EPS CAGR over 2024–28, driven by higher heat-spreader content in future-generation AI chips, continuing GPU and ASIC specification upgrades, and an expanding addressable market in CPO/NPO switch ASIC applications. New cold-plate and CPU-server-socket products are also cited as portfolio expansion. The report expects higher-spec designs to broaden from GPUs to more ASICs over the next two to three years. J.P. Morgan’s forecasts reflect these assumptions. Its 2026E/2027E/2028E EPS estimates are 1%/3%/6% above Bloomberg consensus, while its sales estimates are 1%/6%/14% above consensus. It forecasts revenue growth of 61%/95%/59% year on year in 2026E/2027E/2028E. Gross margin reached 47% in 2Q26, aided by QD yield improvement; the report expects favorable AI-server product mix to support gross margins of more than 47% in 2H26E, 50% in 2027E and 52% in 2028E. This margin trajectory is a key driver of projected EPS growth of 89%/117%/68% across those years. On valuation, Jentech traded at about 50x 12-month forward P/E, near the high end of its historical range, but the report views its 2028E multiple of roughly 25–30x as more reasonable given the expected specification-upgrade cycle. The 30x 2028E P/E used for the target is broadly in line with the company’s three-year average P/E since the AI-server boom began. However, the report notes the share price had risen 108% in the preceding three months, versus a 102% gain for the TWSE index, and concludes that the positive factors have already begun to be reflected in the stock, leaving approximately 10% target-price upside.

Analysis framework

J.P. Morgan links expected changes in Nvidia and AMD chip cooling specifications to Jentech’s component content, then translates the resulting ramp assumptions into quarterly revenue, margin and EPS forecasts. It benchmarks its estimates against Bloomberg consensus and values the company using a forward 2028E P/E multiple relative to historical trading levels.

Methodology notes

• Valuation methodsP/E and PEG Valuation

  Forward P/E valuation

  J.P. Morgan applies a 30x 2028E P/E multiple to derive its Dec-2027 target price of NT$7,500 and compares the multiple with Jentech’s historical trading range.

• Competition & strategyValue chain analysis

  AI-chip cooling-component content analysis

  The report assesses how Nvidia and AMD GPU design changes, plus CPO/NPO and ASIC adoption, increase lid and stiffener content for Jentech as a cooling-component supplier.

Asset mapping & comparison

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

• Jentech Precision Industrial Co. (3653.TW)

  Primary covered cooling-component supplier expected to benefit from higher-spec GPU, ASIC and CPO/NPO thermal designs.

  Strengths

  Leading heat-spreader production capabilities, expected 4–5x content increase from removable lids, MI450 content expansion, and new product opportunities in cold plates and CPU server sockets.

  Weaknesses

  The report notes that the share price has already reflected part of the positive outlook, limiting target-price upside to approximately 10%.

  Comparison

  J.P. Morgan says Jentech has a substantial gap versus other suppliers in AI GPU lids and higher-spec projects such as CPO ASIC stiffeners.

  Risks

  Potential delay in removable-lid adoption and market-share loss in advanced-specification products.

Key data

• Target priceNT$7,500.00Dec-2027 target, raised from NT$6,200.00 and based on 30x 2028E P/E.
• Current priceNT$6,895.00Price as of 29 Sep 2026.
• Implied upside~10%J.P. Morgan considers this less attractive than for other cooling-component names after the share-price rally.
• 3Q26 revenue estimateNT$9.7bn+33% QoQ and +91% YoY, supported by Rubin GPU ramp.
• Revenue growth forecast61% / 95% / 59%2026E / 2027E / 2028E year-on-year growth.
• EPS growth forecast89% / 117% / 68%2026E / 2027E / 2028E year-on-year growth.
• Gross-margin forecast47%+ / 50% / 52%2H26E / 2027E / 2028E, driven by product mix and yield improvement.
• 2028E adjusted EPSNT$252.68J.P. Morgan estimate; 6% above Bloomberg consensus of NT$239.50.

Impact & implications

The report argues that structural AI-chip cooling upgrades can raise Jentech’s content per platform and sustain an earnings upgrade cycle through 2028. Its Overweight view is tempered by the stock’s substantial recent appreciation and the resulting ~10% target-price upside.

Risks

• Nvidia Rubin Ultra specifications and TDP have not been finalized; limited specification improvement could delay mainstream three-piece/removable-lid adoption.
• Another Taiwanese supplier, I-Chiun (2486 TT), has secured some CPU and ASIC stiffener projects, creating a risk of market-share loss.

What to watch

• Potential small-volume removable-lid adoption for Nvidia Rubin from 4Q26 and potential Rubin Ultra mass production from 1Q27.
• The pace of AMD MI450 two-piece-lid mass production from 4Q26.
• Jentech’s revenue progression through 4Q26 and 1Q27, gross-margin performance and AI-server product mix.
• CPO/NPO ramps and the adoption of higher-spec thermal solutions in GPUs and ASICs.