DDR4 contract price increase supermarket expected, and is expected to carry Nanya Science and Technology operation to give the target price of RMB 77

Recent memory market news has been booming, and the rapid growth of DDR4 contract price has exceeded the market's original expectations, and with the upward improvement of server demand, this trend is expected to continue to the second quarter of 2026. This trend brings significant profit growth dynamics to Nanya Technology, a large domestic memory manufacturer, with its revenue and earnings per share (EPS) valuation significantly upwards. Therefore, Kaike Securities maintains "buy" investment fees, etc., with the target price being raised to NT$77.

Kec Securities analysis pointed out that the increase in the DDR4 contract price in the fourth quarter of 2025 significantly exceeded previous expectations. Looking ahead, as the demand for server DDR4 bits in 2026 has been significantly revised to 900 million GB from the original estimate of 370 million GB, the main reason is that in 2026, about 40% of Microsoft's servers use the Ice Lake platform that only supports DDR4 modules, and it is expected that the DDR4 contract price will continue to rise to the second quarter of 2026. Although DDR4 supply will remain strong in the first half of 2026, with the supply and demand ratios of 70.4% and 71.5% in the first and second quarters, the overall quarterly growth rate of DDR4 8Gb contract price in the overall industry will close to 15% and 5% in the first and second quarters of 2026 respectively.

Benefiting from the strong performance of DDR4 price, Nanyako's revenue performance in the third quarter of 2025 was better than expected and is expected to be converted from the net. The company's cumulative projected revenue from July to August has reached 1.211 billion yuan, reaching 71% of the third quarter estimated by Kaike Securities. Its main driving capacity includes quarterly exchanges in July, and the contract prices of DDR4 8Gb particles and SODIMM in the third quarter are expected to increase by more than 100% in the quarter, driving a significant increase in overall average sales order (ASP). Secondly, customers actively prepare goods, resulting in the continuous increase in bit shipments. It is estimated that Nanyake's third quarter of 2025 will reach 19.75 billion yuan, a quarterly increase of 87.7%, and the gross profit margin is estimated to be 35.9%, and EPS will be revised up to 1.41 yuan.

Looking ahead to the fourth quarter of 2025, Keke Securities expects that Nanyako's profit performance will be further improved. While supply is still tight, the DDR4 8Gb particle contract price is expected to increase significantly by 50-70% in the quarter. Nanya Science currently concentrates its production capacity, including the use of 1b processes, and produces DDR4 8Gb products. It is expected that DDR4 8Gb will become the bulk for shipping in the fourth quarter. It is worth mentioning that since the 1b process has a larger bare crystal process than 20 nanometers and the yield continues to improve, the gross profit margin of DDR4 8Gb produced by 1b process is expected to reach more than 70% since the fourth quarter. Based on this basis, it is estimated that Nanyako's investment in the fourth quarter of 2025 will reach 30.8 billion yuan, a quarterly increase of 52.3%. Gross profit margin is expected to rise to 59.3%, and EPS is expected to reach 4.1 yuan, a quarterly increase of 192%.

Based on the long-term optimistic view of the DDR4 market and the competitive advantages of Nanya Science itself, analysts revised the Nanya Science valuation's 2026 revenue to an annual increase of 40%, reaching 94.55 billion yuan. Gross profit margin expectations can be maintained at a high level of 59%, while EPS is significantly revised to 12.6 yuan. Overall, the overall consideration is that by 2026, the profit growth of Nanya Science is significantly better than the original expectations, which has enabled Kaike Securities to maintain Nanya Science’s investment evaluation and raise the target price to 77 yuan. Inspired by the news that brokers were bullish, Nanyake once hit a new year-on-year high of 69.4 yuan per share on the 16th, with a slump of only one step away from the sprint.