Gold Circuit released its Q1 25 results on May 08, 2025, posting 33.1% y/y revenue growth to TWD12.1bn. Gross profit jumped 55% to TWD3.8bn, supported by decent rise of 444bp in margins to 31.3%. Net operating income therefore surged 47.3% to TWD2.5bn, with margin expansion of 204bp to 21.1%. Net profit rose 44% to TWD1.7bn.
Markets were encouraged by the positive results, and the stock rose by 4.4% to settle at the day’s high of TWD224 on the same day. Overall, the stock has been able to sustain its positive trajectory and jumped about 14% till date from the day of the approved results from the management.
Gold Circuit Electronics Ltd., establishedin 1981 and headquartered in Taoyuan City, Taiwan, primarily manufactures and distributes printed circuit boards (PCBs). The company’s products mainly include double side PCBs, multilayer PCBs and semi-finished products. The group’s products are mainly applied in the manufacture of personal computers, workstations, servers, base stations, industrial computers, medical equipment, Internet networking products and electronic books. The company has over 8,800 employees.
The company has been accredited by ISO-9001, ISO-14001, and ISO-45001, highlighting the group’s focus on compliance with international standard practices.
Consistent positive cash flow from operations
Gold Circuit reported a decent performance over FY 21-24, posting a revenue CAGR of 13.5% to reach TWD38.9bn. EBITDA surged 23.3% to TWD9.1bn in FY 24, with margins expanding from 18.2% to 23.3% in FY 24, driven by operational efficiencies. Net income grew at a CAGR of 24.3% to TWD5.6bn in FY 24, with margins expanding from 11% in FY 21 to 14.4% in FY 24.
The company generated consistent positive cash from operations over the same period, rising from TWD2.4bn in FY 21 to TWD5.6bn in FY 24. Cash and cash equivalent therefore grew from TWD3.8bn to TWD9.2bn in FY 24. However, total debt also increased from TWD4.5bn to TWD7.3bn in FY 24, but total debt-to-equity improved from 39.5% to 34.4% in FY 24. Moreover, ROE improved from 28.3% in FY 21 to 29.4% in FY 24.
In comparison, MediaTek Inc., a local peer, posted a lower revenue CAGR of 2.5% over FY 21-24, reaching TWD531bn in FY 24. EBITDA reported a modest CAGR of 1.1% to TWD122bn in FY 24. Net income decreased at a CAGR of 1.5% to TWD106bn in FY 24.
Encouraging FY 24 results
The company reported impressive performance in FY 24, with revenue expanding by 29.6% to TWD38.9bn. Operating income outpaced top-line growth, surging by 57.1% to TWD8.1bn, supported by efficiency gains with margins increasing by 361bp to 20.7%. As a result, profit attributable to owners of parent jumped by 59.1% to TWD5.6bn.
Compelling valuation levels
Over the past year, the company’s stock has delivered decent returns of approximately 22%, reflecting a positive fundamental trajectory. In comparison, MediaTek Inc. delivered lower returns of 11.8%. The management declared dividends of TWD6 per share in FY 24, reflecting a yield of 2.5%. Moreover, analysts forecast an average yield of 3% in FY 25 and an average yield of 3.6% over the next three years, signaling the company’s focus on rewarding its shareholders.
Gold Circuit is currently trading at a P/E of 15.6x, based on the FY 25 estimated EPS of TWD15.1, which is lower than its three-years historical average of 20.3x and MediaTek Inc. (18.1x). Likewise, the company is currently trading at an EV/EBITDA multiple of 9.2x, based on the FY 25 estimated EBITDA of TWD12.8bn, which is lower than its three-years historical average of 11.6x and MediaTek Inc.’s valuation of 13.7x.
Gold Circuit is generally liked by nine analysts, seven of whom have ‘Buy’ ratings and two have ‘Outperform’ ratings for an average target price of TWD296.9, implying about 22% upside potential from the current price.
Their views are further supported by an anticipated revenue CAGR of 21.1% over FY 24-27, reaching TWD69.1bn in FY 27. The analysts anticipate EBITDA CAGR of 26% over the same period, reaching TWD18.3bn with a margin of 23% in FY 27. In addition, analysts estimate net profit CAGR of 26.1%, reaching TWD11.3bn with a margin of 18.9%, with EPS expected to increase to TWD103.5 in FY 27 from TWD66.9 in FY 24. Likewise, analysts estimate an EBITDA CAGR of 15.9%, and a net profit CAGR of 14.1% for MediaTek Inc.
Gold Circuit appears to be set to post growth over the long term, aided by a positive fundamental trajectory, rise in operating efficiency and improvement in ROE performance. Q1 25 results further solidifies the company’s financial standing, with the same being reflected in increased traction in share prices. However, the group is prone to few risks including tariff risk, technology obsolescence risk, inflation, and supply chain management.
