Ta Tun Electric (1623 TT): EHV Mix Drives Earnings; North America and AI DCs Unlock Re-rating Potential
Company Overview
Established in 1962, Ta Tun Electric Wire & Cable (TEWC) has over 60 years of industry experience. The company provides services covering cable supply, installation, testing and maintenance. Its portfolio includes 345kV, 161kV and 69kV power cables, and is one of five Taipower-qualified suppliers of 345kV extra-high-voltage cables. Taipower-related projects account for around half of revenue and form its core business. TEWC is also expanding into high-tech facilities, energy storage and renewable energy projects. The company completed its second 345kV production line in 2025 and is advancing North American product certifications and cable solutions for AI data centers.
Key Points
Rising EHV product mix drove earnings growth well ahead of revenue: TEWC reported 1Q26 revenue of NT$1.86bn, up 12.4% YoY. Supported by a higher shipment mix of 345kV and other extra-high-voltage (EHV) cables, gross margin increased from 17.71% a year earlier to 21.93%, while operating margin reached 19.75%. EHV products accounted for 54.9% of revenue, rising to 67.8% when medium- and high-voltage products were included, supporting better pricing and a more profitable sales mix. Net profit increased 52.2% YoY to NT$280mn, indicating that growth is shifting from revenue expansion toward earnings quality driven by higher-specification products. A sustained EHV mix would support a structurally higher earnings base.
NT$10bn Backlog Supports Medium-Term Visibility; 2H26 Deliveries Key: TEWC’s backlog remains above NT$10bn, with over half comprising 69kV, 161kV and 345kV products. From 2023 to February 2026, it secured 16 Taipower cable contracts worth NT$15.85bn, including five 345kV contracts totaling NT$5.91bn, providing two to three years of revenue visibility. However, project timing remains a source of quarterly volatility. Its self-reported 2Q26 revenue fell 22.9% QoQ, making deferred deliveries and the 161kV/345kV product mix key to full-year revenue and margins.
Second 345kV Line Strengthens Execution: The 345kV cable market has high entry barriers due to lengthy certification, demanding manufacturing standards and substantial capital requirements. Only five suppliers in Taiwan are qualified by Taipower. TEWC’s advantage lies in its established production, installation and contract execution record. The company completed its second 345kV line in 2025, with core CDCC equipment costing approximately NT$300mn. As equipment installation and certification take around three years, new supply cannot enter quickly. Management expects the two lines to support demand for the next five years, with future growth dependent on utilization, production efficiency and backlog conversion.
North America and AI DCs offer long-term upside; CB adds flexibility: TEWC has established an Arizona presence for business development, technical services and warehousing. Initial efforts will target medium- and low-voltage products and Taiwanese customers expanding in the US, with certifications and first shipments targeted by year-end. Longer term, the company plans to develop cables for AI data centers, energy storage and HVDC transmission. As these initiatives remain at an early stage, they are excluded from near-term base case. Commercial success could reposition TEWC as a higher-specification power infrastructure and AI energy supplier, supporting a potential re-rating. Full conversion of its NT$2.0bn convertible bond (CB) would result in estimated static EPS dilution of 11.6%.