JPMorgan: Jentech Precision Industrial - CPO, VR Cold Plates, and Increased Lid/Stiffener Content to Drive Accelerated Growth in 2026-2027
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JPMorgan raised its earnings forecasts and target price for Jentech Precision Industrial (3653.TW), driven by stronger co-packaged optics (CPO) switch ASIC contributions, qualification as a cold plate supplier for Nvidia's Vera Rubin systems, and a 3-4x increase in Rubin GPU thermal content. The December 2027 target price increases from NT$3,800 to NT$4,500, maintaining an Overweight rating. 4Q25 core earnings matched expectations, with gross margin recovering to 41%, supported by a solid 1Q26 outlook.
Cold plate revenue is projected to triple to approximately NT$3 billion in 2026. Meanwhile, CPO revenue is expected to reach over NT$2 billion in 2027 and over NT$4 billion in 2028. Consequently, the 2026 EPS estimate rises 2% to NT$63.0, while 2027 and 2028 EPS estimates increase 7% to NT$110.0 and NT$150.0, respectively.
Nvidia's next-generation Spectrum-x and Quantum-x CPO switches require significantly higher stiffener content due to severe warpage issues, positioning Jentech as a key beneficiary. Furthermore, Jentech is currently one of only four qualified microchannel cold plate suppliers for the VR200 system. This is expected to capture a substantial market share, significantly exceeding prior market expectations of near zero. Additionally, the 3-4x thermal content growth per Rubin GPU compared to B300 provides structural demand support. The new NT$4,500 target is based on 30x 2028E P/E, reflecting multiple new earnings catalysts. Potential upside risks include the adoption of microchannel lids by future Rubin generations, which remains unmodeled.