Asus (2357.TW): AI server racks in expansion along with PC product mix upgrade; Aug beat; Neutral

3-month revenues preview: We expect sequential revenue growth in Sep, leading 3Q26 revenues to grow at 8% QoQ, while we expect sequential revenues decline in 4Q26 at 7%, considering the PC consumption pull in under the high memory costs along with AI servers model transition. We remain positive on the company's expansion toward AI servers and expect the upcoming new models carrying higher ASP to further drive its growth in late 2026 / early 2027. We continue to expect double digit revenues YoY in 3Q26 / 4Q26E at 39% / 27% YoY driven by PC product mix upgrade and AI server racks ramp up. The company retains strong commitments on capacity expansion and diversification, with issuance of US$0.5bn of convertible bonds and US$1bn of exchangeable bonds, supporting the expansion. Maintain Neutral on fair valuation. Earnings revision: We factor in ASUS's Aug revenue and raise our 2026-28E net incomes by 4% / 7% / 4%, mainly on higher revenues. 2026-28E revenues are raised by 4% / 4% / 4%, mainl