18 November 2024

Equities
Micro Star (2377 TT) Computers & Peripherals

Hold: Margin missed; continued margin pressure in

the near term Taiwan

◆ 3Q24 margin missed due to an unfavourable FX rate and MAINTAIN HOLD

increased promotion fees
◆ TARGET PRICE (TWD) PREVIOUS TARGET (TWD)
Margin outlook remains weak in 4Q24e, given rising
expenses for product transition 143.00 143.00
◆ Maintain Hold rating and target price of TWD143, implying SHARE PRICE (TWD) UPSIDE/DOWNSIDE

c15% downside 167.50 -14.6%

(as of 18 Nov 2024)
First impressions – 3Q24 results: GM of 12.7% in 3Q24 missed our estimate of 13.9%
MARKET DATA
and consensus of 14.0% due to an unfavourable FX rate. Opex of 8.6% in 3Q24 was Market cap (TWDm) 141,513 Free float 72%
above our estimate, driven by higher R&D expenses and promotion fees. Overall, EPS of Market cap (USDm) 4,354 BBG 2377 TT
TWD2.05 in 3Q24 missed our estimate and consensus by 42% and 37%, respectively. 3m ADTV (USDm) 22 RIC 2377.TW

GM still under pressure: The margin pressure is likely to persist going into 4Q24e, FINANCIALS AND RATIOS (TWD)
Year to 12/2023a 12/2024e 12/2025e 12/2026e
primary due to elevated R&D expenses and incremental promotional fees, as the HSBC EPS 8.92 10.21 13.02 15.03
company is in a product transition period. We expect 4Q24 sales growth to come in at HSBC EPS (prev) 8.92 13.03 14.95 NA
Change (%) 0.0 -21.6 -12.9 NA
9.3% q-o-q, with a lower gross margin of 12.4%. Management mentioned that new
Consensus EPS 11.12 11.27 14.32 16.26
products, including gaming PCs and RTX 50-series graphics cards, are likely to launch PE (x) 18.8 16.4 12.9 11.1
in early 1Q25. Overall, given the PC refreshment cycle and new graphic cards to be Dividend yield (%) 3.2 3.7 4.7 5.4
EV/EBITDA (x) 11.3 10.9 7.8 6.4
launched next year, we expect 13% revenue growth in 2025e, while we also estimate ROE (%) 15.0 16.2 19.0 18.9
gross margin to improve from 12.7% in 2024e to 14.2% in 2025e, and while our
operating profit estimate for 2025e is still 14% below consensus. 52-WEEK PRICE (TWD)

220.00
Maintain Hold rating with an unchanged target price of aTWD143: We introduce
our 2026e EPS estimate. We lower our 2024e EPS estimate by 22% to reflect the 175.00

slower margin recovery and lower our 2025e EPS estimate by 13% to factor in delayed 130.00
11/23 05/24 11/24
product launches. Our 2024-25e EPS estimates is 17% and 11% below consensus, Target price: 143.00
High: 204.00 Low: 154.00 Current: 167.50
respectively. We apply a target PE multiple of 11x, given that the recovery in 2025e
could lead to a healthier CAGR in the next two years, as the company has passed the Source: LSEG IBES, HSBC estimates

trough, given the end of the inventory correction in 2023. Our unchanged target PE
multiple of 11x is one standard deviation above the trading average in the past five Carol Juan*
Analyst, Technology
years, as we estimate a faster EPS growth CARG of 2023-25e of 21% (versus down HSBC Securities (Taiwan) Corporation Limited
24% y-o-y in 2023). We apply this target PE multiple to our 2025e EPS estimate of [email protected]
+886 2 6631 2862
TWD13.02 (from TWD13.03; rolled over to 2025e from 2024e) and maintain our target
price of TWD143.00. Our target price implies c15% downside from the current share Al Wang*
Associate, Technology Research
price. We maintain our Hold rating, as we see a slower margin recovery in 2H24e. HSBC Securities (Taiwan) Corporation Limited
[email protected]
+886 26631 2865
Exhibit 1: MSI – 3Q24a results comparison
_____________ 3Q24a _________ Consensus HSBC ______ Difference ___ * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is
(TWDm) Actual q-o-q y-o-y estimates estimates vs Cons vs HSBCe not registered/ qualified pursuant to FINRA regulations
Sales 52,087 12% 6% 51,484 53,996 1% -4%
Gross profit 6,604 6% 14% 7,228 7,499 -9% -12%
GM (%) 12.7% -71bps 85bps 14.0% 13.9% -136bps -121bps Conditional love
Op profit 2,128 -4% -4% 3,194 3,396 -33% -37% th
OM (%) 4.1% -64bps -46bps 6.2% 6.3% -212bps -220bps The 17 edition of the EM Sentiment Survey
Net profit 1,732 -18% -26% 2,727 2,993 -36% -42%
EPS (TWD) 2.05 -18% -26% 3.24 3.54 -37% -42% Click to view
Source: Company data, Bloomberg consensus forecasts, HSBC estimates

Disclosures & Disclaimer Issuer of report: HSBC Securities (Taiwan)

Corporation Limited
This report must be read with the disclosures and the analyst certifications in
the Disclosure appendix, and with the Disclaimer, which forms part of it. View HSBC Global Research at:
https://www.research.hsbc.com
 Equities ● Computers & Peripherals
18 November 2024

Financials & valuation: Micro Star Hold

Financial statements Valuation data

Year to 12/2023a 12/2024e 12/2025e 12/2026e Year to 12/2023a 12/2024e 12/2025e 12/2026e
Profit & loss summary (TWDm) EV/sales 0.6 0.5 0.5 0.4
Revenue 182,966 203,318 229,747 220,032 EV/EBITDA 11.3 10.9 7.8 6.4
EBITDA 10,185 10,138 13,895 14,586 EV/IC 5.4 5.0 4.3 4.0
Depreciation & amortisation -1,375 -1,375 -1,375 0 PE* 18.8 16.4 12.9 11.1
Operating profit/EBIT 8,810 8,763 12,520 14,586 PB 2.8 2.6 2.3 1.9
Net interest 429 472 500 500 FCF yield (%) 7.5 12.3 13.4 29.8
PBT 9,177 10,678 13,419 15,486 Dividend yield (%) 3.2 3.7 4.7 5.4
HSBC PBT 0 0 0 0 * Based on HSBC EPS (diluted)
Taxation -1,644 -2,053 -2,415 -2,787
Net profit 7,533 8,625 11,004 12,698
HSBC net profit 7,533 8,625 11,004 12,698 ESG metrics
Cash flow summary (TWDm) Environmental Indicators 12/2022a Governance Indicators 12/2023a
Cash flow from operations 11,200 18,276 19,741 42,923 GHG emission intensity* 105.7 No. of board members 11
Capex -644 -800 -800 -800 Energy intensity* 18.4 Average board tenure (years) NA
Cash flow from investment -605 -802 -802 -802 CO2 reduction policy Yes Female board members (%) 0
Dividends -5,576 -4,562 -5,224 -6,664
Social Indicators 12/2022a Board members independence (%) 27.3
Change in net debt 1,867 -3,817 -3,199 -13,839
FCF equity 10,557 17,476 18,941 42,123 Employee costs as % of revenues 4.7
Balance sheet summary (TWDm) Employee turnover (%) 12.1
Diversity policy Yes
Intangible fixed assets 0 0 0 0
Tangible fixed assets 5,239 4,664 4,089 4,089 Source: Company data, HSBC
Current assets 82,174 93,657 102,017 113,739 * GHG intensity and energy intensity are measured in kg and kWh respectively against revenue in USD ‘000s
Cash & others 25,906 29,723 32,922 46,761
Total assets 90,524 101,432 109,217 120,939
Operating liabilities 40,344 46,311 48,316 47,339 Issuer information
Gross debt 0 0 0 0 Share price (TWD) 167.50 Free float 72%
Net debt -25,906 -29,723 -32,922 -46,761 Target price (TWD) 143.00 Sector Computers & Peripherals
Shareholders' funds 51,058 55,121 60,901 73,599 RIC (Equity) 2377.TW Country/Region Taiwan
Invested capital 21,163 22,286 24,867 23,727
Bloomberg (Equity) 2377 TT Analyst Carol Juan
Market cap (USDm) 4,354 Contact +886 2 6631 2862

Ratio, growth and per share analysis

Year to 12/2023a 12/2024e 12/2025e 12/2026e
Price relative
y-o-y % change
Revenue 1.4 11.1 13.0 -4.2
EBITDA -15.8 -0.5 37.1 5.0 224.00 224.00
Operating profit -17.6 -0.5 42.9 16.5 204.00 204.00
PBT -25.3 16.4 25.7 15.4 184.00 184.00
HSBC EPS -24.4 14.5 27.6 15.4 164.00 164.00
Ratios (%) 144.00 144.00
Revenue/IC (x) 9.4 9.4 9.7 9.1 124.00 124.00
ROIC 37.0 32.6 43.5 49.2 104.00 104.00
ROE 15.0 16.2 19.0 18.9 84.00 84.00
ROA 8.5 9.0 10.5 11.1 2022 2023 2024
EBITDA margin 5.6 5.0 6.0 6.6 Micro Star Rel to TAIWAN WEIGHTED INDEX
Operating profit margin 4.8 4.3 5.4 6.6
EBITDA/net interest (x) - - - - Source: HSBC
Net debt/equity -50.7 -53.9 -54.1 -63.5 Note: Priced at close of 18 Nov 2024
Net debt/EBITDA (x) -2.5 -2.9 -2.4 -3.2
CF from operations/net debt - - - -
Per share data (TWD)
EPS Rep (diluted) 8.92 10.21 13.02 15.03
HSBC EPS (diluted) 8.92 10.21 13.02 15.03
DPS 5.40 6.18 7.89 9.10
Book value 60.43 65.24 72.08 87.11

2
 Equities ● Computers & Peripherals
18 November 2024

Financials

Exhibit 2: HSBC estimate changes and consensus comparison

__________ New __________ __________ Old _________ _______ Change _______ _ Bloomberg consensus __ _ HSBCe vs consensus__
(TWDm) 2024e 2025e 2026e 2024e 2025e 2026e 2024e 2025e 2026e 2024e 2025e 2026e 2024e 2025e 2026e
Sales 203,318 229,747 220,032 210,332 217,820 -3.3% 5.5% 201,134 223,326 240,893 1.1% 2.9% -8.7%
- y-o-y change 11.1% 13.0% -4.2% 15.0% 3.6% 11.5% 11.0% 7.9%
Gross profits 25,920 30,146 31,678 28,632 31,508 -9.5% -4.3% 27,304 31,286 34,055 -5.1% -3.6% -7.0%
- GM 12.7% 13.1% 14.4% 13.6% 14.5% 14.0% 14.1%
Operating profits 8,763 12,520 14,586 12,405 14,590 -29.4% -14.2% 11,203 14,535 16,085 -21.8% -13.9% -9.3%
- OPM 4.3% 5.4% 6.6% 5.9% 6.7% 5.6% 6.5% 6.7%
Net income 8,625 11,004 12,698 11,006 12,633 -21.6% -12.9% 10,292 12,404 13,154 -16.2% -11.3% -3.5%
EPS (TWD) 10.21 13.02 15.03 13.03 14.95 -21.6% -12.9% 12.34 14.68 15.57 -17.3% -11.3% -3.5%
- y-o-y change 14.5% 27.6% 15.4% 46.1% 14.8% 31.0% 19.0% 6.0%
Source: Bloomberg, HSC estimates

Exhibit 3: MSI – quarterly earnings estimates

(TWDm) 2023a 1Q24a 2Q24a 3Q24a 4Q24e 2024e 1Q25e 2Q25e 3Q25e 4Q25e 2025e 2026e
Sales 182,966 47,627 46,672 52,087 56,932 203,318 56,408 54,915 57,642 60,783 229,747 220,032
- q-o-q -3.1% -2.0% 11.6% 9.3% -0.9% -2.6% 5.0% 5.4%
- y-o-y 1.4% 9.2% 13.0% 6.5% 15.8% 11.1% 18.4% 17.7% 10.7% 6.8% 13.0% -4.2%
Gross profits 22,846 6,040 6,248 6,604 7,029 25,920 7,463 7,259 7,474 7,950 30,146 31,678
Gross margin 12.5% 12.7% 13.4% 12.7% 12.3% 12.7% 13.2% 13.2% 13.0% 13.1% 13.1% 14.4%
- q-o-q 14.1% 3.4% 5.7% 6.4% 6.2% -2.7% 3.0% 6.4%
- y-o-y -11.2% -0.7% 9.9% 14.1% 32.8% 13.5% 23.6% 16.2% 13.2% 13.1% 16.3% 5.1%
Operating profits 8,810 2,229 2,206 2,128 2,201 8,763 2,950 3,030 3,208 3,331 12,520 14,586
OP margin 4.8% 4.7% 4.7% 4.1% 3.9% 4.3% 5.2% 5.5% 5.6% 5.5% 5.4% 6.6%
- q-o-q 62.6% -1.1% -3.5% 3.4% 34.1% 2.7% 5.9% 3.8%
- y-o-y -17.6% -19.8% -9.5% -4.2% 60.5% -0.5% 32.3% 37.4% 50.8% 51.4% 42.9% 16.5%
Non-op income 367 762 511 46 597 1,915 225 225 225 225 900 900
Pre-tax income 9,177 2,991 2,716 2,174 2,797 10,678 3,175 3,255 3,433 3,556 13,419 15,486
Tax expense 1,644 499 609 442 504 2,053 572 586 618 640 2,415 2,787
Net income 7,533 2,492 2,107 1,732 2,294 8,625 2,604 2,669 2,815 2,916 11,004 12,698
- q-o-q 237.0% -15.4% -17.8% 32.4% 13.5% 2.5% 5.5% 3.6%
- y-o-y -24.4% 1.1% 6.5% -26.3% 210.2% 14.5% 4.5% 26.7% 62.5% 27.1% 27.6% 15.4%
Net margin 4.1% 5.2% 4.5% 3.3% 4.0% 4.2% 4.6% 4.9% 4.9% 4.8% 4.8% 5.8%
EPS (TWD) 8.92 2.95 2.49 2.05 2.72 10.21 3.08 3.16 3.33 3.45 13.02 15.03
- q-o-q 237.0% -15.4% -17.8% 32.4% 13.5% 2.5% 5.5% 3.6%
- y-o-y -24.4% 1.1% 6.5% -26.3% 210.2% 14.5% 4.5% 26.7% 62.5% 27.1% 27.6% 15.4%
Source: Company data, HSBC estimates

Exhibit 4: MSI: Forward PE band Exhibit 5: MSI: Forward PB band

300 250
Unit: TWD Unit: TWD
250 200
200
150
150
100
100

50 50

0 0
Jan-17 Jan-19 Jan-21 Jan-23 Jan-17 Jan-19 Jan-21 Jan-23
MSI 5.0x 7.0x MSI 1.00x 1.50x
9.0x 11.0x 13.0x 2.00x 2.50x 3.00x
Source: TEJ, HSBC estimates Source: TEJ, HSBC estimates

3
 Equities ● Computers & Peripherals
18 November 2024

Valuation and risks

Valuation Risks
Current price: We introduce our 2026e EPS estimate. We lower our 2024e Key upside risks: 1) better-than-expected gaming
MSI
TWD167.50 EPS estimate by 22% to reflect the slower margin recovery and notebook demand in 2024e to provide better revenue
2377 TT lower our 2025e EPS estimate by 13% to factor in delayed growth; 2) stronger GM recovery due to better graphic
Target price:
product launches. Our 2024-25e EPS estimates is 17% and 11% card pricing; and 3) better-than-expected graphic cards
TWD143.00 below consensus, respectively. We apply a target PE multiple of and motherboard demand
Hold Up/downside: 11x, given that the recovery in 2025e could lead to a healthier Key downside risks: 1) weaker-than-expected NB
-14.6% CAGR in the next two years, as the company has passed the demand; 2) slower-than-expected graphic cards and
trough, given the end of the inventory correction in 2023. Our motherboards recovery; and 3) weaker GM due to
unchanged target PE multiple of 11x is one standard deviation graphic card pricing weakness
above the trading average in the past five years, as we estimate
a faster EPS growth CARG of 2023-25e of 21% (versus down
24% y-o-y in 2023). We apply this target PE multiple to our
2025e EPS estimate of TWD13.02 (from TWD13.03; rolled over
to 2025e from 2024e) and maintain our target price of
TWD143.00. Our target price implies c15% downside from the
current share price. We maintain our Hold rating, as we see a
slower margin recovery in 2H24e.

Priced at 18 November 2024

Source: Bloomberg, HSBC estimates

4
 Equities ● Computers & Peripherals
18 November 2024

Disclosure appendix
Analyst Certification
The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s)
whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the covering
analyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) or
issuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), and any other
views or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflect
their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific
recommendation(s) or views contained in this research report: Carol Juan and Al Wang

Important disclosures
Equities: Stock ratings and basis for financial analysis
HSBC and its affiliates, including the issuer of this report (“HSBC”) believes an investor's decision to buy or sell a stock should
depend on individual circumstances such as the investor's existing holdings, risk tolerance and other considerations and that
investors utilise various disciplines and investment horizons when making investment decisions. Ratings should not be used or
relied on in isolation as investment advice. Different securities firms use a variety of ratings terms as well as different rating
systems to describe their recommendations and therefore investors should carefully read the definitions of the ratings used in
each research report. Further, investors should carefully read the entire research report and not infer its contents from the rating
because research reports contain more complete information concerning the analysts' views and the basis for the rating.

From 23rd March 2015 HSBC has assigned ratings on the following basis:
The target price is based on the analyst’s assessment of the stock’s actual current value, although we expect it to take six to 12
months for the market price to reflect this. When the target price is more than 20% above the current share price, the stock will
be classified as a Buy; when it is between 5% and 20% above the current share price, the stock may be classified as a Buy or a
Hold; when it is between 5% below and 5% above the current share price, the stock will be classified as a Hold; when it is between
5% and 20% below the current share price, the stock may be classified as a Hold or a Reduce; and when it is more than 20%
below the current share price, the stock will be classified as a Reduce.

Our ratings are re-calibrated against these bands at the time of any 'material change' (initiation or resumption of coverage, change
in target price or estimates).

Upside/Downside is the percentage difference between the target price and the share price.

Prior to this date, HSBC’s rating structure was applied on the following basis:
For each stock we set a required rate of return calculated from the cost of equity for that stock’s domestic or, as appropriate,
regional market established by our strategy team. The target price for a stock represented the value the analyst expected the
stock to reach over our performance horizon. The performance horizon was 12 months. For a stock to be classified as Overweight,
the potential return, which equals the percentage difference between the current share price and the target price, including the
forecast dividend yield when indicated, had to exceed the required return by at least 5 percentage points over the succeeding 12
months (or 10 percentage points for a stock classified as Volatile*). For a stock to be classified as Underweight, the stock was
expected to underperform its required return by at least 5 percentage points over the succeeding 12 months (or 10 percentage
points for a stock classified as Volatile*). Stocks between these bands were classified as Neutral.

*A stock was classified as volatile if its historical volatility had exceeded 40%, if the stock had been listed for less than 12 months
(unless it was in an industry or sector where volatility is low) or if the analyst expected significant volatility. However, stocks which
we did not consider volatile may in fact also have behaved in such a way. Historical volatility was defined as the past month's
average of the daily 365-day moving average volatilities. In order to avoid misleadingly frequent changes in rating, however,
volatility had to move 2.5 percentage points past the 40% benchmark in either direction for a stock's status to change.

5
 Equities ● Computers & Peripherals
18 November 2024

Rating distribution for long-term investment opportunities

As of 30 September 2024, the distribution of all independent ratings published by HSBC is as follows:
Buy 55% (15% of these provided with Investment Banking Services in the past 12 months)
Hold 39% (14% of these provided with Investment Banking Services in the past 12 months)
Sell 6% (11% of these provided with Investment Banking Services in the past 12 months)
For the purposes of the distribution above the following mapping structure is used during the transition from the previous to current rating
models: under our previous model, Overweight = Buy, Neutral = Hold and Underweight = Sell; under our current model Buy = Buy, Hold
= Hold and Reduce = Sell. For rating definitions under both models, please see “Stock ratings and basis for financial analysis” above.

For the distribution of non-independent ratings published by HSBC, please see the disclosure page available at
http://www.hsbcnet.com/gbm/financial-regulation/investment-recommendations-disclosures.

Share price and rating changes for long-term investment opportunities

Micro Star (2377.TW) share price performance TWD Vs Rating & target price history
HSBC rating history
From To Date Analyst
Buy Hold 11 Nov 2021 Carol Juan
Target price Value Date Analyst
192 Price 1 145.00 22 Mar 2022 Carol Juan
Price 2 136.00 06 May 2022 Carol Juan
172 Price 3 120.00 11 Aug 2022 Carol Juan
152 Price 4 105.00 14 Nov 2022 Carol Juan
Price 5 135.00 15 Mar 2023 Carol Juan
132 Price 6 140.00 12 May 2023 Carol Juan
112 Price 7 143.00 18 Mar 2024 Carol Juan
Source: HSBC
92
72
Nov-21

Nov-22

Nov-23

Nov-24
Nov-19

Nov-20

Source: HSBC

To view a list of all the independent fundamental ratings/recommendations disseminated by HSBC during the preceding 12-month
period, and the location where we publish our quarterly distribution of non-fundamental recommendations (applicable to Fixed
Income and Currencies research only), please use the following links to access the disclosure page:

Clients of HSBC Private Banking: www.research.privatebank.hsbc.com/Disclosures

All other clients: www.research.hsbc.com/A/Disclosures

HSBC & Analyst disclosures

Disclosure checklist

Company Ticker Recent price Price date Disclosure

MICRO STAR 2377.TW 167.50 18 Nov 2024 –
Source: HSBC

1 HSBC has managed or co-managed a public offering of securities for this company within the past 12 months.
2 HSBC expects to receive or intends to seek compensation for investment banking services from this company in the next
3 months.
3 At the time of publication of this report, HSBC Securities (USA) Inc. is a Market Maker in securities issued by this company.
4 As of 31 October 2024, HSBC beneficially owned 1% or more of a class of common equity securities of this company.
5 This company was a client of HSBC or had during the preceding 12 month period been a client of and/or paid
compensation to HSBC in respect of investment banking services.
6 As of 30 September 2024, this company was a client of HSBC or had during the preceding 12 month period been a client
of and/or paid compensation to HSBC in respect of non-investment banking securities-related services.
7 As of 30 September 2024, this company was a client of HSBC or had during the preceding 12 month period been a client
of and/or paid compensation to HSBC in respect of non-securities services.

6
 Equities ● Computers & Peripherals
18 November 2024

8 A covering analyst/s has received compensation from this company in the past 12 months.
9 A covering analyst/s or a member of his/her household has a financial interest in the securities of this company, as
detailed below.
10 A covering analyst/s or a member of his/her household is an officer, director or supervisory board member of this
company, as detailed below.
11 At the time of publication of this report, HSBC is a non-US Market Maker in securities issued by this company and/or in
securities in respect of this company.
12 As of 08 November 2024, HSBC beneficially held a net long position of more than 0.5% of this company’s total issued
share capital, calculated according to the SSR methodology.
13 As of 08 November 2024, HSBC beneficially held a net short position of more than 0.5% of this company’s total issued
share capital, calculated according to the SSR methodology.
14 HSBC Qianhai Securities Limited holds 1% or more of a class of common equity securities of this company.
HSBC and its affiliates will from time to time sell to and buy from customers the securities/instruments, both equity and debt
(including derivatives) of companies covered in HSBC Research on a principal or agency basis or act as a market maker or
liquidity provider in the securities/instruments mentioned in this report.

Analysts, economists, and strategists are paid in part by reference to the profitability of HSBC which includes investment banking,
sales & trading, and principal trading revenues.

Whether, or in what time frame, an update of this analysis will be published is not determined in advance.

Non-U.S. analysts may not be associated persons of HSBC Securities (USA) Inc, and therefore may not be subject to FINRA
Rule 2241 or FINRA Rule 2242 restrictions on communications with the subject company, public appearances and trading
securities held by the analysts.

Economic sanctions laws imposed by certain jurisdictions such as the US, the EU, the UK, and others, may prohibit persons
subject to those laws from making certain types of investments, including by transacting or dealing in securities of particular
issuers, sectors, or regions. This report does not constitute advice in relation to any such laws and should not be construed as an
inducement to transact in securities in breach of such laws.

For disclosures in respect of any company mentioned in this report, please see the most recently published report on that company
available at www.hsbcnet.com/research. HSBC Private Banking clients should contact their Relationship Manager for queries
regarding other research reports. In order to find out more about the proprietary models used to produce this report, please contact
the authoring analyst.

Additional disclosures
1 This report is dated as at 18 November 2024.
2 All market data included in this report are dated as at close 18 November 2024, unless a different date and/or a specific
time of day is indicated in the report.
3 HSBC has procedures in place to identify and manage any potential conflicts of interest that arise in connection with its
Research business. HSBC's analysts and its other staff who are involved in the preparation and dissemination of
Research operate and have a management reporting line independent of HSBC's Investment Banking business.
Information Barrier procedures are in place between the Investment Banking, Principal Trading, and Research businesses
to ensure that any confidential and/or price sensitive information is handled in an appropriate manner.
4 You are not permitted to use, for reference, any data in this document for the purpose of (i) determining the interest
payable, or other sums due, under loan agreements or under other financial contracts or instruments, (ii) determining the
price at which a financial instrument may be bought or sold or traded or redeemed, or the value of a financial instrument,
and/or (iii) measuring the performance of a financial instrument or of an investment fund.

Production & distribution disclosures

1. This report was produced and signed off by the author on 18 Nov 2024 08:59 GMT.

2. In order to see when this report was first disseminated please see the disclosure page available at
https://www.research.hsbc.com/R/34/tshJXqr

7
 Equities ● Computers & Peripherals
18 November 2024

Disclaimer
Legal entities as at 29 March 2024: Issuer of report
HSBC Bank plc; HSBC Continental Europe; HSBC Continental Europe SA, Germany; HSBC Bank Middle East Limited, DIFC HSBC Securities (Taiwan) Corporation Limited
; HSBC Bank Middle East Limited, UAE branch; HSBC Yatirim Menkul Degerler AS, Istanbul; HSBC Securities (South Africa) 54th Floor, 7 Xinyi Road, Sec. 5,
(Pty) Ltd, Johannesburg; The Hongkong and Shanghai Banking Corporation Limited, Hong Kong; The Hongkong and Xinyi District,
Shanghai Banking Corporation Limited, Singapore Branch; The Hongkong and Shanghai Banking Corporation Limited, Taipei, Taiwan
Seoul Securities Branch; The Hongkong and Shanghai Banking Corporation Limited, Seoul Branch; HSBC Qianhai Telephone: + 886 2 2722 8458
Securities Limited; HSBC Securities (Taiwan) Corporation Limited; HSBC Securities and Capital Markets (India) Private Fax: + 886 2 2722 2056
Limited, Mumbai; HSBC Bank Australia Limited; HSBC Securities (USA) Inc., New York; HSBC México, SA, Institución de Website: www.research.hsbc.com
Banca Múltiple, Grupo Financiero HSBC; Banco HSBC SA; HSBC Bank Argentina SA
This document has been issued by HSBC Securities (Taiwan) Corporation Limited in the conduct of its Taiwan regulated business for the information of its institutional and professional customers.
It is not intended for and should not be distributed to retail customers in Taiwan. This recommendation material is for reference only. Investors should carefully consider their own investment
risk. Investment results are the responsibility of the individual investor. HSBC Securities (Taiwan) Corporation Limited is regulated by the Securities and Futures Bureau. All enquires by recipients
in Taiwan must be directed to your HSBC contact in Taiwan. If this report is received by a customer of an affiliate of HSBC, it's provision to the recipient is subject to the terms of business in
place between the recipient and such affiliate. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.
HSBC has based this document on information obtained from sources it believes to be reliable but which it has not independently verified; HSBC makes no guarantee, representation or warranty
and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the Research Division of HSBC only and are subject to change without notice.
From time to time research analysts conduct site visits of covered issuers. HSBC policies prohibit research analysts from accepting payment or reimbursement for travel expenses from the
issuer for such visits. HSBC and its affiliates and/or their officers, directors and employees may have positions in any securities mentioned in this document (or in any related investment) and
may from time to time add to or dispose of any such securities (or investment). HSBC and its affiliates may act as market maker or have assumed an underwriting commitment in the securities
of companies discussed in this document (or in related investments), may sell them to or buy them from customers on a principal basis and may also perform or seek to perform investment
banking or underwriting services for or relating to those companies. HSBC Research may not be distributed to the public media or quoted or used by the public media without the express written
consent of HSBC Securities (Taiwan) Corporation Limited. Reports written by Taiwan-based analysts on non-Taiwan listed companies are not considered recommendations to buy or sell
securities under Taiwan Stock Exchange Operational Regulations governing securities firms recommending trades in securities to customers and as such HSBC Securities (Taiwan) Corporation
Limited may not execute transactions for clients in these securities/instruments.
In the UK, this publication is distributed by HSBC Bank plc for the information of its Clients (as defined in the Rules of FCA) and those of its affiliates only. Nothing herein excludes or restricts
any duty or liability to a customer which HSBC Bank plc has under the Financial Services and Markets Act 2000 or under the Rules of FCA and PRA. A recipient who chooses to deal with any
person who is not a representative of HSBC Bank plc in the UK will not enjoy the protections afforded by the UK regulatory regime. HSBC Bank plc is regulated by the Financial Conduct Authority
and the Prudential Regulation Authority.
In the European Economic Area, this publication has been distributed by HSBC Continental Europe or by such other HSBC affiliate from which the recipient receives relevant services.
In Japan, this publication has been distributed by HSBC Securities (Japan) Limited. It may not be further distributed in whole or in part for any purpose. In Korea, this publication is distributed by
either The Hongkong and Shanghai Banking Corporation Limited, Seoul Securities Branch ("HBAP SLS") or The Hongkong and Shanghai Banking Corporation Limited, Seoul Branch ("HBAP SEL")
for the general information of professional investors specified in Article 9 of the Financial Investment Services and Capital Markets Act ("FSCMA"). This publication is not a prospectus as defined in
the FSCMA. It may not be further distributed in whole or in part for any purpose. Both HBAP SLS and HBAP SEL are regulated by the Financial Services Commission and the Financial Supervisory
Service of Korea. In Singapore, this publication is distributed by The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch for the general information of institutional investors or
other persons specified in Sections 274 and 304 of the Securities and Futures Act (Chapter 289) ("SFA") and accredited investors and other persons in accordance with the conditions specified in
Sections 275 and 305 of the SFA. Only Economics or Currencies reports are intended for distribution to a person who is not an Accredited Investor, Expert Investor or Institutional Investor as defined
in SFA. The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch accepts legal responsibility for the contents of reports. This publication is not a prospectus as defined in the
SFA. It may not be further distributed in whole or in part for any purpose. The Hongkong and Shanghai Banking Corporation Limited Singapore Branch is regulated by the Monetary Authority of
Singapore. Recipients in Singapore should contact a "Hongkong and Shanghai Banking Corporation Limited, Singapore Branch" representative in respect of any matters arising from, or in connection
with this report. Please refer to The Hongkong and Shanghai Banking Corporation Limited Singapore Branch's website at www.business.hsbc.com.sg for contact details. In Australia, this publication
has been distributed by The Hongkong and Shanghai Banking Corporation Limited (ABN 65 117 925 970, AFSL 301737) for the general information of its "wholesale" customers (as defined in the
Corporations Act 2001). Where distributed to retail customers, this research is distributed by HSBC Bank Australia Limited (ABN 48 006 434 162, AFSL No. 232595). These respective entities make
no representations that the products or services mentioned in this document are available to persons in Australia or are necessarily suitable for any particular person or appropriate in accordance
with local law. No consideration has been given to the particular investment objectives, financial situation or particular needs of any recipient.
HSBC Securities (USA) Inc. accepts responsibility for the content of this research report prepared by its non-US foreign affiliate. The information contained herein is under no circumstances to
be construed as investment advice and is not tailored to the needs of the recipient. All US persons receiving and/or accessing this report and intending to effect transactions in any security
discussed herein should do so with HSBC Securities (USA) Inc. in the United States and not with its non-US foreign affiliate, the issuer of this report. HSBC México, S.A., Institución de Banca
Múltiple, Grupo Financiero HSBC is authorized and regulated by Secretaría de Hacienda y Crédito Público and Comisión Nacional Bancaria y de Valores (CNBV). In Brazil, this document has
been distributed by Banco HSBC SA ("HSBC Brazil"), and/or its affiliates. As required by Resolution No. 20/2021 of the Securities and Exchange Commission of Brazil (Comissão de Valores
Mobiliários), potential conflicts of interest concerning (i) HSBC Brazil and/or its affiliates; and (ii) the analyst(s) responsible for authoring this report are stated on the chart above labelled "HSBC
& Analyst Disclosures".
If you are a customer of HSBC Wealth & Personal Banking ("WPB"), including Global Private Banking, you are eligible to receive this publication only if: (i) you have been approved to receive
relevant research publications by an applicable HSBC legal entity; (ii) you have agreed to the applicable HSBC entity's terms and conditions and/or customer declaration for accessing research;
and (iii) you have agreed to the terms and conditions of any other internet banking, online banking, mobile banking and/or investment services offered by that HSBC entity, through which you
will access research publications (collectively with (ii), the "Terms"). If you do not meet the above eligibility requirements, please disregard this publication and, if you are a WPB customer, please
notify your Relationship Manager or call the relevant customer hotline. Distribution of this publication is the sole responsibility of the HSBC entity with whom you have agreed the Terms. Receipt
of research publications is strictly subject to the Terms and any other conditions or disclaimers applicable to the provision of the publications that may be advised by WPB.
© Copyright 2024, HSBC Securities (Taiwan) Corporation Limited, ALL RIGHTS RESERVED. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, on any
form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of HSBC Securities (Taiwan) Corporation Limited. MCI (P) 008/01/2024,
MDDI (P) 006/09/2024, MDDI (P) 004/10/2024, MDDI (P) 020/10/2024

[1248113]