We value Aspeed at NT$6,750 based on a historical mid-cycle multiple (since 2020) of 45x 2H26E-1H27E EPS, as we believe the company’s earnings performance and industry dynamics would be the key focuses of the market. Our target multiple is justified, in our view, by the secular growth trends of the industry, and Aspeed’s strong supply chain position, as well as robust earnings growth amid margin expansions.  

Our quant rating system rates the Aspeed stock High Risk based on its volatility over the past year, which we think is unwarranted given the company's dominance and outlook in the BMC sector. Key downside risks to our earnings forecasts and target price include: 1) weaker-than-expected growth in servers; 2) slower-than-expected CPU platform migration; 3) peer competition; and 4) limited progress in product diversification.