Asia Vital Components (3017) investor relations material

Executive summary

• Q2 2026 revenue reached TWD 49.1 billion, up 66% year-over-year and stable sequentially, with gross margin improving to 32.57% due to favorable product mix and higher server application revenue.

• Net income for Q2 2026 was TWD 9,567 million, a 139% increase year-over-year and 21% higher than Q1 2026; EPS rose to TWD 24.37, up 137% year-over-year and 21% sequentially.

• H1 2026 revenue totaled TWD 98.16 billion, up 85% year-over-year, with net income at TWD 18.95 billion, more than doubling from the prior year.

• Core thermal and chassis business drove growth, with combined first-half revenue of TWD 81.9 billion, up 104% year-over-year, and server/network revenue up 153% year-over-year.

• Segment profit for the general management segment was TWD 18.10 billion, and overseas segment profit was TWD 7.84 billion for the six-month period.

Financial highlights

• Gross margin improved to 32.57% in Q2 2026, up from 29.77% in Q1 and 24.41% in Q2 2025; H1 2026 gross margin was 31%.

• Operating margin was 27.44% in Q2 2026, with operating income for H1 2026 at TWD 25.50 billion, up from TWD 10.28 billion year-over-year.

• Cash and cash equivalents at end of June 2026 were TWD 77.7 billion, up TWD 9.8 billion from Q1 and 136% year-over-year.

• First half operating cash flow reached TWD 26.3 billion, up 176% year-over-year; free cash flow was TWD 19.2 billion, about three times prior year.

• Total assets grew to TWD 194.58 billion, with equity attributable to the parent at TWD 55.20 billion as of June 30, 2026.

Outlook and guidance

• Liquid cooling adoption in data centers is expected to surpass 50% penetration next year, driving further server-related revenue growth.

• Second half 2026 revenue is expected to be better than the first half, with all product lines entering mass production and automation supporting margin trends.

• CapEx for 2026 is around TWD 15 billion, with 2027 expected to be higher, funded by operating cash flow and existing bank facilities.

• Management notes continued margin expansion and strong year-over-year growth in revenue and profitability.

• The company adopted new IFRS standards effective January 2026, with no material impact expected.