Preface

The announcement of Sunplus's issuance of 4,000 new shares at NT$185 each has caught investors' attention. Scheduled for trading on the market shortly, these shares aim to raise NT$740 million. However, Sunplus's stock price encountered significant pressure, dipping by over 7% mid-day to a low of NT$178, falling below its set issuance price.

Lazy bag

Despite expectations of strong orders due to cooperation with advanced packaging plants, Sunplus faces immediate market pressures as it prepares for new stock trading.

Main Body

Sunplus, intricately tied with TSMC's (2330-TW) supply chain, aims to bolster its financial standing through a strategic issuance of 4,000 shares at a price of NT$185 to raise NT$740 million. This strategic financial maneuver aligns with forecasts of strengthened revenue as 2025 unfolds, specifically benefiting from alliances with TSMC plants such as the advanced packaging plant AP8, which is projected to sustain strong demand into the third quarter of 2026.

According to analyst Ming-Chi Kuo, orders for Sunplus will likely surpass initial market forecasts, projecting revenue between NT$110 to NT$120 billion by 2026—potentially doubling 2024's figures. Despite such optimistic projections, the market has reacted cautiously due to the potential selling pressure from newly available shares, as observed in today's trading patterns where Sunplus's stock temporarily declined over 7%, reaching lows of NT$178—a figure that, notably, falls beneath its new issuance price.

Looking at Sunplus's 2024 performance, revenues stood at NT$5.121 billion with a gross margin of 26.64%, reflecting a 1.93 percentage point decrease from the previous year. Net profits after tax amounted to NT$574 million, a decrease of 11.37%, which translated to a per-share net income of NT$7.63.

Despite recent dips, Kuo remains positive that Sunplus will exceed revenue and profit expectations this year. This aligns with Sunplus's revenue performance for February 2025, where they posted NT$469 million, marking a 26.16% year-over-year increase despite a month-over-month dip of 7.08%. Cumulatively, Sunplus achieved NT$978 million in revenue over the first two months of 2025, a 22.43% rise from the previous year. The internal forecasts resonate with expectations of exceeding NT$1.62 billion in revenue for the first quarter, a new peak for the company.

In terms of capacity planning, Sunplus's portfolio includes factories in Yangmei, an ongoing project in Zhongli, and the recently completed and expansive Zhongli Xinsheng plant, spanning over 12,000 ping. Anticipated to finalize setup by the second quarter of 2025, the Zhongli Xinsheng plant is noted for its enhanced facilities and greater scale compared to existing sites.

Key Insights Table