Accton Technology Corporation (2345.TW): GM headwind should be lifted from Q426E

We met with Accton earlier this week. Management remains confident that both Sept. and Q426E sales will increase sequentially, supported by strong demand for 800G switches and the ramp-up of AI cards (i.e. Trainium 3), despite the transition of certain components (memory and PCB) to a consignment model. We estimate the consignment shift reduced Aug. sales by ~5% and now forecast Q326E sales of NT$122.5bn, up 28% QoQ (vs prior +30% QoQ). Given the timing mismatch, its conservative accounting approach, and a higher sales mix from AI card, we expect Q326E GM to decline 1.4ppt QoQ to 18.3%, while OPM should remain relatively resilient on operating leverage. We forecast Q326E EPS of NT$25.39, up 29% QoQ. We forecast Q426E sales growth of 3% QoQ, supported by continued strength in 800G switches and the ongoing ramp of Trainium 3. We expect one of the Trainium 3 models will migrate from air cooled to liquid-cooled design, which carries ~20% higher ASP and better GM. Accton is expanding in-hou