BizLink's second-quarter results were in line with expectations, while stronger HPC momentum drove upgrades to earnings forecasts and the target price

Overview

The report assesses BizLink's 2Q26 results, HPC business outlook, progress on the Interplex Datacom acquisition, and valuation. Nomura believes the quarterly results were in line with expectations, margins recovered after platform-transition disruptions subsided, and high-speed data cables, AI infrastructure, and data-center power demand will strengthen growth momentum in 2H26-27F.

Core views

BizLink's 2Q26 EPS was TWD 14.94, up 31% q-q and 44% y-y, in line with Nomura's expectations; sales were TWD 23,281mn, up 12% q-q and 37% y-y. Sales increased q-q across all business segments: according to Nomura's estimates, HPC accounted for 43% of total sales, with revenue up 1% q-q; Industrial accounted for 35%, up 13% q-q; and Automotive revenue increased 7% q-q. This indicates that growth was not entirely dependent on a single segment, as Industrial, Automotive, and other non-AI businesses also contributed incremental growth. Profitability recovered significantly q-q. The 2Q26 gross margin was 30.7%, up 2.0ppt q-q and down 0.4ppt y-y; the operating margin was 17.2%, up 2.3ppt q-q and 0.3ppt y-y. Nomura mainly attributes the improvement to the completion of the generational transition between old and new HPC platforms. This transition had significantly weighed on product mix and capacity utilization in 1Q26. After the disruption subsided, shipments of certain products recovered, while greater sales scale and improved production efficiency jointly offset the impact of the lower-margin mix in the Automotive and FA businesses. Management remains positive about the growth outlook. Key drivers include demand for high-speed cables and connectors, rising power density and electricity consumption in AI infrastructure and data centers, and higher data density from optical product upgrades from 800G to 1.6T. Management expects margins in 2H26E to remain at reasonable levels, supported by a growing revenue base and a favorable product mix. Nomura's market checks also indicate that AEC demand not only recovered in 2Q26, but that some hyperscale customers also increased order momentum entering 2H26F, providing further support for HPC growth. The Interplex Datacom acquisition remains in progress, and management expects the transaction to be completed in 2H26E. Nomura's current 2026F/27F earnings forecasts do not yet incorporate the acquisition, but it estimates that the transaction could provide 8%-13% additional upside to 2027F earnings. The transaction is therefore both a source of potential future earnings upside and a key matter requiring monitoring of closing and integration progress. Based on the recovery in high-speed data cable demand, higher unit content value and market share for power cables, and sales growth in non-AI businesses, Nomura raised its 2026F/27F EPS forecasts from TWD 63.34/114.26 to TWD 65.45/116.73, increases of 3% and 2%, respectively; the forecasts assume 119.6mn shares outstanding. The target price was correspondingly raised from TWD 3,200 to TWD 3,270, based on 28x 2027F EPS of TWD 116.73. This 28x valuation is above the midpoint of the historical P/E range of 9.9-29.7x over the past five years. The report also notes that the stock currently trades at 19.5x/15.3x 2027F/28F EPS, versus a historical average P/E of 17x since 2014. Based on the share price of TWD 2,275.00 on August 21, 2026, the report states implied upside of 43.7% and maintains its Buy rating, with the TAIEX as the benchmark. On ESG, the report notes that BizLink has established green policies and monitors emissions, raw-material usage, and water-use efficiency. The company's long-term objectives include reducing supply disruptions caused by climate change and natural disasters, lowering its carbon footprint, and continuing to increase the share of annual sales generated by green businesses related to electric vehicles, charging, and energy.

Analysis framework

Nomura first compares 2Q26 revenue, EPS, and margins with its own expectations and q-q and y-y figures, then breaks down sales changes across HPC, Industrial, Automotive, and other segments, explaining the margin recovery through platform transitions, product mix, capacity utilization, scale, and production efficiency. It subsequently combines management guidance and market checks to assess high-speed cable and AEC demand, reflects these assumptions in its 2026F/27F EPS forecasts, and finally derives the target price using a 2027F P/E multiple while separately assessing acquisition benefits not yet incorporated into forecasts.

Methodology notes

• Valuation methodologyP/E and PEG valuation

  Forward P/E valuation

  The report calculates the TWD 3,270 target price using 28x 2027F EPS of TWD 116.73 and compares this multiple with the historical range of 9.9-29.7x over the past five years and the historical average of 17x since 2014.

• Industry/Sector analysis frameworkVolume-price decomposition

  Decomposition of demand, product content value, and market share

  The report attributes the upgrade to its HPC revenue forecast to recovering demand for high-speed data cables, higher unit content value for power cables, and market-share gains, while also incorporating sales growth in non-AI businesses into its revised earnings forecasts.

• Corporate fundamentals and financial frameworkEarnings quality analysis

  Analysis of margin drivers

  The report explains changes in gross and operating margins through product mix, platform transitions, capacity utilization, sales scale, and production efficiency, rather than merely observing growth in total profit.

Asset mapping & comparison

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

• BizLink (3665.TW)

  The report maintains its Buy rating and raises its earnings forecasts and target price due to improving HPC demand, higher product content value, and market-share gains.

  Strengths

  High-speed cables and connectors benefit from increasing power density in AI infrastructure and data centers; product mix, capacity utilization, and production efficiency have improved following the completion of the platform transition; Industrial and other non-AI businesses also achieved growth.

  Weaknesses

  The lower-margin structure of the Automotive and FA businesses may dilute the overall gross margin to some extent.

  Comparison

  The stock trades at 19.5x/15.3x 2027F/28F EPS, versus a historical average of 17x since 2014; the 28x target valuation is above the midpoint of the 9.9-29.7x range over the past five years.

  Risks

  Key risks include a slower-than-expected demand recovery among EV, other automotive OEM, and automation customers; weaker-than-expected growth in AI server and SPE demand or supply-chain pricing pressure; and disruptions caused by materials, energy, tariffs, and supply-chain issues.

Key data

• 2Q26 EPSTWD 14.94Up 31% q-q and 44% y-y, in line with Nomura's expectations
• 2Q26 salesTWD 23,281mnUp 12% q-q and 37% y-y
• HPC sales contribution and growth43%; +1% q-qNomura's estimate for 2Q26
• Industrial sales contribution and growth35%; +13% q-qNomura's estimate for 2Q26
• Automotive revenue growth+7% q-q2Q26 q-q change
• 2Q26 gross margin30.7%Up 2.0ppt q-q and down 0.4ppt y-y
• 2Q26 operating margin17.2%Up 2.3ppt q-q and 0.3ppt y-y
• 2026F EPS forecastTWD 65.45Raised from TWD 63.34, an increase of 3%
• 2027F EPS forecastTWD 116.73Raised from TWD 114.26, an increase of 2%
• Shares outstanding used in forecasts119.6mn sharesUsed for the 2026F/27F EPS estimates
• Potential earnings benefit from the Interplex acquisition8%-13%Nomura's estimate of potential additional upside to 2027F earnings, not yet incorporated into forecasts
• Target priceTWD 3,270Previously TWD 3,200, based on 28x 2027F EPS
• Current share priceTWD 2,275.00As of August 21, 2026
• Implied upside+43.7%Upside from the current share price to the target price as stated in the report
• Forward P/E19.5x/15.3xCorresponding to 2027F/28F EPS, respectively; the historical average since 2014 is 17x
• Five-year P/E range9.9-29.7xThe 28x multiple used for the target price is above the midpoint of this range
• Market capitalizationUSD 14,252.4mnKey market data stated in the report
• Three-month average daily trading valueUSD 209.0mn3-mth ADT stated in the report
• Free-float ratio80.0%Market data stated in the report
• Absolute share-price performance (TWD)1M +13.8%; 3M +5.6%; 12M +132.9%Performance over the periods stated in the report
• Performance relative to the TAIEX1M +12.2%; 3M -3.1%; 12M +45.3%Relative returns stated in the report

Impact & implications

The report believes that the fading negative impact of the HPC platform transition, the recovery in AEC orders, and rising data-center power demand make BizLink's revenue growth and margin improvement more sustainable, supporting upgrades to its 2026F/27F earnings forecasts and target price. The Interplex transaction has not yet been incorporated into forecasts and, if completed as planned, could provide additional earnings upside. However, the 28x target P/E is above the midpoint of the five-year valuation range, so achieving the target still depends on demand, margins, and supply-chain conditions meeting expectations.

Risks

• Demand recovery among major EV customers, other automotive OEM customers, and automation customers may be slower than expected.
• Growth in AI server and SPE demand may be slower than expected, while the supply chain may also face pricing pressure.
• Rising materials and energy costs, as well as global tariffs, may disrupt supply chains and weaken consumer demand.

What to watch

• Monitor whether 2H26 revenue growth and a favorable product mix can keep margins at the reasonable levels indicated by management.
• Monitor the sustainability of the AEC demand recovery and stronger order momentum from certain hyperscale customers in 2H26F.
• Monitor whether the Interplex Datacom acquisition can be completed in 2H26E and the earnings benefits not yet incorporated into forecasts.
• Monitor actual progress in high-speed cables, power cables, the upgrade from 800G to 1.6T, and demand for AI servers and SPE.