Innolux's 370,000 sheets surge to limit up! Transforming from a panel manufacturer to a satellite supplier, driven by both capital and fundamentals, reshaping valuation

On the eve of closing today, Innolux (3481) shocked the Taiwan stock market with a fierce rally. After opening at NT$14.1 in the morning, the stock surged to the daily limit of NT$14.85 in less than an hour. The day’s trading volume exploded to 370,000 shares, making it not only the highest traded stock in Taiwan today but also driving the panel group including AU Optronics (2409) and Innolux (6116) to move in sync. Behind this limit-up, it’s not just hype around themes but a triple resonance of momentum, fundamentals, and technicals.

Major Capital Rotation: Foreign Investors Reversing Course with a Net Buy of Nearly 30,000 Shares, Short-term Funds Accelerate Inflow

Who triggered this limit-up? The answer is clear from the capital flow data. Previously cautious foreign investors in the panel industry suddenly reversed their stance today, net buying nearly 30,000 shares, becoming the main driver pushing the stock to hit the limit. Coupled with proprietary traders’ hedging buy orders and a significant increase in margin financing, it shows that funds from all sides are rushing in to grab shares.

Even more noteworthy is the abnormal surge in trading volume. What does 370,000 shares of massive volume represent? It indicates a large-scale transfer of chips at the high point. At the same time, a large number of buy orders still appeared at the closing limit price, reflecting strong bullish confidence before the year’s end. This structural movement of short-term capital is not just emotional hype.

SpaceX Supply Chain Enters, FOPLP Technology Receives Space-Grade Certification—A Key Turning Point in Valuation Logic

The core catalyst behind today’s limit-up is a major market news: Innolux successfully entered SpaceX’s supply chain with FOPLP technology. Specifically, the company has been entrusted with the RF chip packaging for Starlink ground satellite modules.

What does this mean? It signifies that Innolux is transforming from a traditional panel manufacturer into a tech supplier with advanced semiconductor packaging capabilities. This is not just diversification but an international validation of technical strength—being able to enter space applications supply chains means products have passed the industry’s most stringent quality tests.

This valuation restructuring cannot be ignored. Historically, the market’s perception of panel manufacturers has been confined within the “cyclical stocks” framework, with profitability limited by the cyclical fluctuations of panel prices. But if Innolux truly unlocks business opportunities in semiconductor packaging and satellite communications, the valuation logic will shift toward concepts like “growth + advanced manufacturing,” representing a qualitative leap.

Fundamentals Rebound from the Bottom, Revenue Hits Nearly 13-Month High

From financial data, Innolux’s December 2025 consolidated revenue reached NT$16.83 billion, up 3.8% month-on-month and 6.5% year-on-year. Achieving a near 13-month high during the traditional off-season is uncommon in the industry. The two main business segments—display and non-display—are both recovering, indicating a bottoming signal.

Chairman Hong Jin-Yang’s statement is even more straightforward: Q4 2025 will be the annual bottom of this industry cycle. In other words, starting from 2026, the industry is expected to see stabilized prices. Coupled with the trend toward larger sizes, demand is projected to grow by about 6%, and operations in the first quarter of next year may outperform market expectations.

Deeper improvements come from product mix optimization. The increasing shipment proportion of high-margin products such as automotive applications and advanced packaging has substantively improved the company’s overall gross profit structure, effectively diversifying the risks associated with TV panel price fluctuations. This product portfolio enhancement is opening new ceilings for the company’s profitability.

Technical Breakthrough, KD Golden Cross Forms with Volume-Driven Rise

From a technical perspective, Innolux today strongly broke above the monthly and quarterly moving averages with a gap-up, breaking through the downward resistance line formed since October. Short-term technical indicators show that the KD has completed a golden cross at low levels and continues to diverge upward, indicating strengthening short-term momentum.

The most symbolic is today’s volume-driven long red candlestick. It pierced all short-term moving averages in one go, forming a typical “volume-driven rally” bullish pattern. If buying momentum can continue, and the stock remains above today’s limit-up price for three consecutive trading days, the short-term upward target is expected to point toward the 2025 high of NT$16.45.

Risk Alerts and Key Follow-up Observations

However, investors should not be overly optimistic. With only two trading days left before the market closes, whether the volume can sustain above 200,000 shares is critical; if chips loosen excessively, a short-term correction is likely. In the medium term, close attention should be paid to whether the actual panel prices in Q1 2026 will rise as expected, and when the SpaceX orders will concretely contribute to EPS.

In terms of trading strategy, since today’s volume and limit-up have already exhausted short-term gains, blindly chasing the high carries higher risk. It is recommended to wait for a pullback to test the gap created today without breaking below it, then consider phased positioning to reduce risk.