Nan Ya Plastics Corp (1303.TW): Electronic materials beat extends into 4Q; guiding rising ASIC project exposure. Re-iterate OW

We see the recent AI-related sell-off as a buying opportunity in NPC, with fundamentals very strong and Oct electronic materials revenue reaching a record NT$21.5bn (+8% m/m, +105% y/y), implying a 4Q run rate of +16% q/q sales growth (assuming zero growth in Nov/Dec), already above JPMe at +10% q/q. We highlight that 93% of the m/m growth came from ASP/mix improvement, while NPC highlighted significantly rising participation in the ASIC supply chain alongside good progress in next-generation material development/certification. While some investors have been concerned about flattish or even falling FR4 prices, our channel checks indicate continued demand strength and we think the price stagnation for some peers might be company-specific, and mostly relates to low-end products using thick E-glass. NPC discontinued thick E-glass production a while ago, and we see continued price and demand tightness for the company into November. The recent Panasonic Hsinchu disruption might exacerbate s