Asus (2357)

Equity Research 20 August 2026 | 12:35AM HKT

Asus (2357.TW): PC enjoying product mix upgrade; AI server client base expansion; July & 2Q26 beat; Neutral

ASUS’s Jul revenue was up 53% YoY / down 21% QoQ to NT$84bn, or 16% higher Allen Chang | than our estimate, reflecting strong AI servers demand, along with PC product mix Goldman Sachs (Asia) L.L.C. upgrade. Looking forward, we expect sequential revenue growth in Aug-Sep, Verena Jeng considering the low base in Jul, followed by sequential revenue declines in Oct-Nov, | Goldman Sachs (Asia) L.L.C. as the rising memory cost would weigh PC end demand and AI servers model transition. Overall, our estimate shows double-digit YoY revenue growth for 3Q / Yifan Hu | Goldman Sachs (Asia) L.L.C. 4Q26E, supported by PC product mix upgrade and rack-level AI server ramp up. Management is positive on ASUS’s AI server business growth ahead and expects client base expansion in 2027, and the company is expanding its global capacity to better capture the growing demand. ASUS aims a stronger 2026E AI server revenue growth and announced the plan of raising US$2.5bn by issuing bonds, supporting the company’s AI server capacity expansion. For PC business, ASUS will continue to launch new models, including AI, gaming, and commercial PC to support the product mix upgrade, offsetting the impact of memory price hike, per management. We remain positive on ASUS’s expansion toward AI, while the rising memory cost could weigh on PC end demand. Maintain Neutral.

Exhibit 1: We expect ASUS Aug revenue to grow +41% YoY/+5% MoM to NT$88bn Jul-26 Aug-26E Sep-26E Oct-26E Nov-26E Dec-26E 3Q26E 3426E Rev (NT$m) 84,131 88,338 96,272 81,831 72,011 75,459 268,741 229,302 Rev YoY 53% 41% 17% 23% 8% 8% 34% 13% Rev MoM / QoQ -21% 5% 9% -15% -12% 5% 4% -15% GS estimates (NT$m) 72,325 Act vs. GS 16%

Source: Company data, Goldman Sachs Global Investment Research

2Q26 beat: ASUS’s 2Q26 revenue was up 37% YoY / 24% QoQ, or 9% / 7% higher than our estimate / Bloomberg consensus, which we attribute to the PC pull-in and AI server shipments growth. GM improved QoQ, higher than our estimate and Bloomberg consensus, which management attribute to ASUS’s strong supply chain management and AI server shipments ramp up driving manufacturing efficiency. 2Q26 opex ratio is better than our estimate, reflecting the operational efficiency improvement as revenue scales up and leading 2Q26 net income 88% / 75% higher than our estimate.

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Exhibit 2: 2Q26 result snapshot NT m 2Q25 1Q26 2Q26 QoQ YoY GS Act / GS Cons. Act/Cons. Revenue 188,006 208,370 257,732 24% 37% 236,098 9% 240,393 7% GP 25,963 30,969 44,243 43% 70% 33,886 31% 32,787 35% OP 7,835 11,896 20,974 76% 168% 10,748 95% 11,246 87% Net income 9,806 9,797 19,048 94% 94% 10,120 88% 10,854 75% Margins GM 13.8% 14.9% 17.2% 2.3ppts 3.4ppts 14.4% 2.8ppts 13.6% 3.5ppts OPM 4.2% 5.7% 8.1% 2.4ppts 4ppts 4.6% 3.6ppts 4.7% 3.5ppts NM 5.2% 4.7% 7.4% 2.7ppts 2.2ppts 4.3% 3.1ppts 4.5% 2.9ppts

Source: Company data, Goldman Sachs Global Investment Research

Earnings revision: We factor in ASUS’s 2Q26 result and raise our 2026-28E net incomes by 30% / 2% / 4%, mainly on higher revenues and lower opex ratios. 2026-28E revenues are raised by 12% / 8% / 8%, mainly on higher contribution from rack-level AI server business as global capacity ramps up. We revise up 2026E GM to reflect the 2Q26 GM beat, while revise down 2027-28E GM, as the rising rack-level AI server shipments would weigh on the GM. 2026-28E opex ratios are revised down to reflect the operational efficiency improvement as revenue scales up.

Exhibit 3: Earnings revision 2026E 2027E 2028E NT m Old New Chg Old New Chg Old New…