Guangyang Technology (1785) stock price breaks through 69.3 yuan and hits the daily limit, driven by the dual forces of rigid demand for AI data centers and the precious metals circular economy

Core Drivers of Strong Stock Price Performance

On the 23rd, Taiwan’s leading advanced materials and precious metals recycling company, Koyo Electronics (1785), saw its stock price break through a nearly six-month consolidation range, with a strong intraday limit-up. It ultimately closed at NT$69.3, reaching a new high not seen since July last year, over a year and a half ago. This rally is not a fleeting phenomenon; even at the close, there were tens of thousands of buy orders queued at the limit-up, reflecting the market’s shift from cautious observation to optimistic outlook on Koyo Electronics.

Dual Fundamental Engines Operating, Revenue and Profit Rise Together

Koyo Electronics recently announced that its consolidated revenue for November reached NT$3.816 billion, a 14% month-over-month increase and a 26.39% year-over-year growth, setting a new record for the month and pushing the total revenue for the first 11 months to a decade-high. Behind this impressive performance is the continuous optimization of the company’s VAS (Value-Added Services, excluding precious metal raw material costs) business. Compared to general precious metal trading, VAS offers much higher gross margins and better reflects Koyo’s core competitiveness.

In a recent investor briefing, the management highlighted a significant business opportunity: the rigid demand for high-capacity storage devices in AI data centers has entered a爆發 stage. Due to the massive data generated by AI model training and inference, demand for high-capacity HDDs over 30TB remains high. Koyo Electronics has benefited greatly from this wave, as the new generation HAMR (Heat-Assisted Magnetic Recording) technology requires大量精密靶材, extending the company’s order visibility in the HDD sector to over 12 months. As the proportion of high-margin products increases, third-quarter EPS reached NT$1.17, with profit margins significantly improving. The market expects the fourth quarter and the first half of next year to remain strong.

Breakthrough in Domestic Semiconductor Target Materials, Entering 3nm and 5nm Supply Chains

Regarding Koyo’s long-term growth potential, its layout in semiconductor front-end target materials is most closely watched by institutional investors. Historically, Taiwan’s sputtering target materials for semiconductors relied heavily on Japanese (JX Metals) and American (Honeywell) suppliers. However, with geopolitical shifts and the leading foundries promoting local supply chains, Koyo Electronics has successfully entered Taiwan’s most advanced 3nm and 5nm process nodes, with some copper, aluminum, titanium, and tantalum targets verified and now reliably supplied.

This “domestic substitution” achievement has a very high entry barrier. Once certified by wafer fabs, collaborations often last for many years. The semiconductor division’s split plan starting at the end of 2024 aims to give this unit greater flexibility for R&D and capital operations. Market estimates suggest that as AI chip capacity continues to be released, Koyo’s revenue from semiconductor front-end materials could double within the next two years, forming a solid foundation for its long-term stock price appreciation.

International Gold Prices Hit Record Highs, Precious Metal Assets and Recycling Profit Margins Expand Simultaneously

International spot gold prices today approached the historic high of US$4,500 per ounce, with an astonishing annual increase. This upward trend is driven by escalating geopolitical tensions and central banks’ gold-buying spree. As Taiwan’s largest and most advanced precious metals recycler among the “Golden Triumvirate,” Koyo Electronics’ stock price movement shows a high correlation with gold prices.

From a business perspective, rising gold prices bring dual benefits: first, “asset appreciation,” as Koyo maintains a certain inventory of precious metals in its operations, and the surge in gold prices directly enhances asset valuation on the balance sheet; second, “recycling profit margin expansion,” as high gold prices increase the willingness of individuals and enterprises to recycle precious metals. Leveraging its advanced refining and recycling technology, Koyo can extract higher processing and trading margins. In a market environment with rising risk-averse capital, Koyo, with its circular economy concept for precious metals and stable revenue structure, has become a preferred target for capital allocation, fueling today’s limit-up rally.

Technical and Chip-Flow Outlook: Bullish Pattern Formed, Institutional Funds Reflow

From a technical perspective, Koyo Electronics’ stock performance is outstanding. The stock broke through the large consolidation zone of NT$60-64 with a volume gap, forming an upward gap. This pattern typically indicates that short-term trapped positions have been digested, and the bulls’ attacking momentum is strong. Currently, the KD and MACD indicators are both trending upward in a bullish alignment, with trading volume exceeding 44,000 lots, indicating genuine capital inflow rather than false upward movement.

The chip-flow signals are also optimistic. Post-market data shows that foreign investors bought heavily today, which is particularly significant given their historically cautious stance toward Koyo. The dual stimuli of record-high revenue and soaring gold prices have clearly attracted institutional funds back. Meanwhile, the concentration of major institutional holdings has increased significantly. If margin debt remains low, it suggests stable chips and less susceptibility to short-term volatility.

Compared to Competitors, Why Is Koyo More Competitive?

Within Taiwan’s semiconductor materials sector, Koyo is often compared to Chung-Sha (1560). Chung-Sha’s strength lies in its “diamond disk” products used in CMP (Chemical Mechanical Planarization) processes, with gross margins over 30%, but its overall revenue scale is much smaller than Koyo’s. Koyo’s advantage is its comprehensive “metals science” application footprint, covering storage devices, displays, semiconductors, and precious metal recycling.

Compared to Chung-Sha and TSMC’s close integration with advanced process nodes, Koyo’s investment logic is more resilient. It benefits from the circular economy trend of electronic waste recycling and the rigid demand for AI server hardware. In the current global emphasis on green supply chains (ESG), Koyo’s “closed-loop supply chain” model—recycling and refining electronic waste into semiconductor-grade target materials—has established a unique technological barrier in international competition.

Future Outlook

Looking ahead, if Koyo can maintain the NT$65-66 key support level in the medium to long term, the bullish pattern is expected to continue. In the short term, attention should be paid to profit-taking pressure after the limit-up, as the stock price’s deviation from the 5-day moving average has become high, so chasing the peak requires caution.

Key indicators to watch are: first, the trend of international gold prices; second, whether foreign and institutional funds continue to buy consecutively. These factors will determine whether the rally can extend smoothly beyond NT$75. If the semiconductor division’s split plan proceeds smoothly and AI chip capacity continues to expand, Koyo could transform from a traditional precious metals recycler into a high-tech semiconductor materials and AI hardware supplier.