Winbond Electronics: revenue up 3.8-fold, yet the discount to its own history is still wide

Winbond Electronics reported third-quarter 2026 revenue of TWD 82,330.8m, up 278.2% year on year, with EBITDA of TWD 51,781.1m and net profit of TWD 35,421.9m. Growth accelerated from the 184.7% seen in the second quarter, and the EBITDA margin reached 62.9% against 32.4% a year earlier. Net debt turned into a net cash position of TWD 31,354.1m, while the EV/EBITDA multiple of 5.4x sits 74% below its own three-year average. Our verdict: rather attractive – the portal model puts the upside to fair value at +17%. Our view: the share is rather attractive at the current price; upside on the portal model +17%.

Our view: is there upside

Our view in numbers

Key takeaways

— Revenue rose 3.8-fold, and the acceleration has now run for three quarters

— EBITDA margin climbed to 62.9%, and operating leverage supplied almost all of it

— Net profit rose 12-fold, with no one-off items disclosed in the report

— Free cash flow covered capex, and net debt turned into a net cash position

— A dividend yield of 0.37% is too small to sway the verdict

— EV/EBITDA of 5.4x is a 74% discount to its own three-year average

Key figures, TWD bn

Revenue rose 3.8-fold, and the acceleration has now run for three quarters

Third-quarter 2026 revenue came to TWD 82,330.8m, up 278.2% year on year. Growth accelerated: it was 184.7% in the second quarter and 91.3% in the first. This is the third consecutive acceleration in year-on-year terms, and each step is markedly larger than the last.

In absolute terms, quarterly revenue rose from TWD 21,770.5m in the third quarter of 2025 to TWD 82,330.8m, nearly a fourfold increase. The sequential move is just as striking: revenue was TWD 59,843.3m in the second quarter of 2026, so it added more than TWD 22bn in a single quarter.

Trailing-twelve-month revenue reached TWD 207,100.0m. That is the base for the multiples, and it is 2.5 times the full-year 2025 revenue obtained by summing the four quarters of last year. Accelerating revenue growth is the central fact of the report, and all three recent quarters confirm it.

EBITDA margin climbed to 62.9%, and operating leverage supplied almost all of it

Third-quarter 2026 EBITDA was TWD 51,781.1m, a margin of 62.9% against 32.4% a year earlier. That is a gain of 30.5 percentage points, and operating leverage explains almost all of it: revenue rose 3.8-fold while operating profit went from TWD 3,729.1m to TWD 44,019.4m, an 11.8-fold increase.

Operating profit grew faster than revenue because fixed costs were spread over a much larger sales volume. An EBITDA margin of 62.9% means each additional billion of revenue brings about TWD 629m of EBITDA, provided the cost structure holds.

Trailing-twelve-month EBITDA reached TWD 119,721.2m. With a market capitalisation of TWD 607,500.0m and net cash of TWD 31,354.1m, EV/EBITDA LTM is 5.4x. The LTM margin is not disclosed as a separate line, but the quarterly trend shows that 62.9% is not a one-off spike but the result of three consecutive quarters of rising utilisation.

Net profit rose 12-fold, with no one-off items disclosed in the report

Third-quarter 2026 net profit was TWD 35,421.9m against TWD 2,943.2m a year earlier, a rise of 1,103.5%. The net margin climbed to 43.0% from 13.5%. Profit grew faster than revenue because the operating margin widened more than other lines contracted.

No one-off items appear in the disclosed data. That means the profit came from operations rather than from asset sales or revaluations. Trailing-twelve-month net profit was TWD 73,275.6m, and with a market capitalisation of TWD 607,500.0m the P/E LTM is 8.3x.

Return on equity over the last twelve months was 24.7%. That is a high figure for a memory manufacturer, reflecting a combination of strong margins and moderate capital. The question is how durable the profit level is: at a 62.9% EBITDA margin, any fall in utilisation or prices would hit profit disproportionately hard.

Free cash flow covered capex, and net debt turned into a net cash position

Third-quarter 2026 operating cash flow was TWD 45,868.2m. Capital expenditure in the same quarter was TWD 16,071.1m, so free cash flow after investment stayed firmly positive. Over the last twelve months operating cash flow reached TWD 87,056.6m.

Net debt at 30 September 2026 was minus TWD 31,354.1m, i.e. a net cash position of TWD 31,354.1m. A year earlier, at 30 June 2025, net debt stood at TWD 40,980.2m, and at 30 June 2026 it was TWD 25,625.6m. Over the twelve months to the end of September 2026 net debt moved from TWD 40,980.2m to minus TWD 31,354.1m, a change of TWD 72,334.3m for the better.

The ratio of net debt to LTM EBITDA is minus 0.26, reflecting the net cash position. The company carries no net debt burden, which removes interest-rate risk. Cash flow and the balance sheet are the second pillar of the report after revenue.

A dividend yield of 0.37% is too small to sway the verdict

The trailing-twelve-month dividend yield is 0.37% on the current price. At a market capitalisation of TWD 607,500.0m that corresponds to payouts of about TWD 2,225m, which is small against LTM net profit of TWD 73,275.6m. The company pays out only a small share of profit.

Our estimate: if the current payout policy holds, the 2026 dividend will stay within a few tenths of a percent in yield terms. Everything hinges on the payout ratio, which is not given in the disclosed data, and on the profit base – with LTM net profit of TWD 73,275.6m, even a generous payout ratio would produce a yield below 1%.

For a holder the dividend is not an argument: a 0.37% yield loses even to the risk-free rate. The main return on the share has to come from growth in business value rather than from payouts. That lowers the appeal for a conservative investor but does not change the assessment for a growth investor.

EV/EBITDA of 5.4x is a 74% discount to its own three-year average

EV/EBITDA LTM is 5.4x against its own three-year average of 20.7. The discount is 74%, and it is the strongest argument for the share. P/E LTM is 8.3x, which looks modest against a 24.7% ROE for a company with such a margin.

The multiple is low not because of debt: net cash of TWD 31,354.1m reduces EV rather than increasing it. The market values the business at 5.4 times annual EBITDA, whereas over the past three years it averaged 20.7. Such a de-rating reflects expectations that the current profit level is not sustainable.

On the portal's model the upside to fair value is +17%. The model sets EBITDA growth against the target multiple and market capitalisation. This is our own estimate, not a market consensus. At a 74% discount to history, even a cautious model produces a double-digit upside.

Valuation on the latest reported figures

Bottom line

The strong side of the report is revenue up 3.8-fold and a 62.9% EBITDA margin, which together produced net profit of TWD 35,421.9m. Cash flow and the balance sheet confirm the quality of that profit: operating cash flow of TWD 45,868.2m covered capital expenditure of TWD 16,071.1m, and net debt turned into a net cash position of TWD 31,354.1m. The weak spot is the 0.37% dividend yield, which gives the holder no cash return. The key question for a holder is whether the 62.9% margin holds: that decides whether EV/EBITDA of 5.4x remains a 74% discount to history or turns out to be fair value. Our verdict: rather attractive – the portal model puts the upside to fair value at +17%. Our view: the share is rather attractive at the current price; upside on the portal model +17%.