SZS (3376.TW): Foldable iPhone to drive growth ahead; Reiterate Buy with TP raised to NT$300

With roll-out of foldable iPhone (iPhone DUO) with new form factor and affordable price starting from US$1,999, we remain constructive on SZS and view the company as one of the key beneficiaries as the global leading hinge supplier. We expect global foldable phones penetration rate to reach 3.6%/5.9% in 2026E/27E (vs. 1.6% in 2025), with consumer preference of the latest technology and premium smartphone models. The foldable iPhone's hinge has more than 100 tiny precision components with high dollar content, and we see SZS has accumulated know-how and R&D capabilities on hinge products, capacity expansion, and in-house MIM (Metal Injection Molding). Reiterate Buy. SZS Aug revenues were down 10% YoY, or up 1% MoM to NT$820m, while 38% below our estimates, which we attribute to the muted growth of wearable hinges and Notebook hinges;