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Valuation & Risks ( 3661.TW ) Disclosure / Price Chart(s) / Valuation & Risk
Fundamental Equity Research
Our target price for Alchip of NT$4,800 is based on 40x 2026-27E average EPS. 40x target PER is at the high end of its historical 3-year PER as we see strong growth potentials from its AI ASIC projects with its key CSP client with better project cycle and resuming strong growth momentum starting from next year. Our target price equates to 2026/27E PE of 53x/32x and 2026/27E P/B of 7x/6x. Our target price is also supported by our DCF method with a WACC of 9.0% (a long-term growth rate of 15%, a mid-term growth rate of 10%, a 4.0% risk-free rate, and a 3% risk premium).

Key downside risks to our target price include: 1) slower-than-expected NRE projects and revenue contributions; 2) capacity constraints at advanced packaging; and 3) more competition and/or insourcing by customers.

 

 

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