Gold prices hit a new high, and demand for AI hardware is strong. Koyo Electronics (1785) hit the daily limit and closed at 69.3 yuan. Is there still room for BBU concept stocks?

Koyo Tech (1785) today (23rd), amid multiple positive catalysts resonating, quickly increased volume after opening and pushed higher, hitting the daily limit-up at 69.3 yuan, reaching a new high not seen since July last year, over a year and a half ago. There are still over ten thousand buy orders queued at the limit-up, fully reflecting that market sentiment has shifted from wait-and-see to high optimism. What substantial supports are hidden behind this rally? As Taiwan’s leading advanced materials and precious metals recycling company, can Koyo Tech’s strong performance continue?

Why Did Koyo Tech Become Today’s Highlight with Triple Driving Forces?

Gold Price Soars to Historic Highs, Safe-Haven Funds Actively Allocate

Influenced by escalating global geopolitical tensions and continuous central bank gold purchases worldwide, international spot gold prices today approached the historic level of $4,500 per ounce, with significant year-to-date gains. As the largest revenue scale and most advanced recycling technology among Taiwan’s “Golden Triumvirate,” Koyo Tech directly benefits from rising gold prices.

From a business logic perspective, rising gold prices bring dual benefits: First, the valuation of precious metal inventory in Koyo Tech’s processes appreciates, directly improving the balance sheet; second, with high gold prices, the willingness of private and corporate sectors to recycle increases. Leveraging its leading refining and recycling technology, the company expands processing and trading margins. Under heightened risk aversion, market funds prioritize allocations to stable revenue structures with circular economic value, making Koyo Tech the top choice.

Revenue and Orders Hit New Highs, AI Server Hardware Demand Explodes

Koyo Tech’s latest consolidated revenue for November reached 3.816 billion yuan, up 14% month-on-month and 26.39% year-on-year, setting a monthly record. Cumulative revenue for the first 11 months also continued to hit a nearly 10-year high. Behind this impressive performance is the successful transformation of the company’s business, especially the core “VAS” (Value-Added Services) segment.

VAS refers to the actual technical service income provided by the company after deducting the raw material costs of precious metals. This segment’s gross margin far exceeds that of general precious metal trading, highlighting the company’s core technical capabilities. In recent investor meetings, management disclosed that the rigid demand for high-capacity storage in AI data centers has entered an acceleration phase. As AI model training and inference generate massive data, demand for high-capacity HDDs (over 30TB) remains strong.

The application of new HAMR (Heat-Assisted Magnetic Recording) technology requires large amounts of precision target materials. Orders in the hard disk drive sector for Koyo Tech have visibility extended beyond 12 months. As the proportion of high-margin products increases, the third quarter’s EPS reached 1.17 yuan, indicating a clear profit recovery. The market generally expects profits to continue rising through Q4 and into early next year.

Domestic Production of Semiconductor Target Materials Advances, Entering 3nm and 5nm Advanced Processes

Koyo Tech’s most promising long-term growth driver, favored by institutional investors, is its strategic layout in semiconductor front-end target materials. Historically, Taiwan’s sputtering target materials for semiconductors relied heavily on Japanese (e.g., JX Metals) and American (e.g., Honeywell) suppliers. As geopolitical risks rise and leading foundries push for localized supply chains, Koyo Tech has successfully penetrated key customer groups.

Currently, in Taiwan’s most advanced 3nm and 5nm processes, some copper, aluminum, titanium, tantalum target materials have been verified and supplied stably. Such “domestic substitution” has high entry barriers; once certified by wafer fabs, supply contracts often last several years, establishing a stable revenue base. The semiconductor division split plan starting at the end of 2024 aims to enable more flexible R&D and capital operations, preparing for future independent development.

Circular Economy and BBU Concept Intertwined, Koyo Tech’s Unique Investment Logic

In Taiwan’s semiconductor consumables sector, Koyo Tech is often compared with Chung Sian (1560). Chung Sian’s strength lies in its “diamond disc” products for CMP processes, with gross margins over 30%, but its revenue scale is relatively small. Koyo Tech’s advantage is its comprehensive “metals science” application layout, covering storage devices, displays, semiconductors, and precious metal recycling.

Particularly noteworthy is that Koyo Tech’s business model gradually embodies the core value of the BBU concept—recycling and re-refining electronic waste into semiconductor-grade target materials, forming a “closed-loop supply chain.” Compared to Chung Sian and TSMC’s highly integrated advanced process supply chains, Koyo Tech’s investment logic has greater “resilience.” It benefits from the global ESG trend emphasizing green supply chains, as well as from the dual drivers of rigid demand in AI server hardware and circular economy through precious metal recycling. This diversified revenue structure and technological barriers build a unique moat in international competition.

Technical and Capital Signals

In terms of stock price performance, Koyo Tech today broke out of a large consolidation zone between 60-64 yuan with a volume gap, forming an upward breakout. This pattern typically indicates that short-term trapped shareholders have been fully absorbed, and the bulls’ attack strength is strong. The KD and MACD indicators are both aligned in bullish uptrends, with volume expanding to over 44,000 lots, showing genuine capital inflow rather than false rally.

On the chip side, foreign institutional investors’ movements provide the most bullish signals. According to post-market data, foreign investors bought heavily today, reversing their previously cautious stance toward Koyo Tech. Driven by record-high revenue and soaring gold prices, foreign capital has clearly flowed back. Meanwhile, major institutional holdings have increased significantly, and if margin debt remains low, it indicates strong chip stability and resilience.

Market Outlook and Risk Tips

Medium- to Long-term Strategy

If the stock price can hold above 65-66 yuan, the bullish trend may continue. Looking ahead to 2026, with the full performance of the semiconductor division split, Koyo Tech could evolve from a traditional precious metals recycler into a high-tech semiconductor consumables and AI hardware materials supplier. The integration of BBU concept and circular economy will further enhance the company’s long-term growth potential.

Short-term Precautions

Since today’s rally hit the daily limit-up and the deviation from the 5-day moving average is large, short-term profit-taking pressure should be watched. Caution is advised when chasing the high, and investors should assess their risk tolerance carefully.

Indicators to Monitor

Track international gold price trends and whether foreign and institutional investors continue to buy consecutively. These two indicators will be key to judging whether the rally can extend beyond the 75 yuan resistance zone.