Stock Under Scrutiny Hits Limit Up on Day One! 'New Stock King' Chuanhu Holds 3,600 Patents, Latest Target Price Revealed: 43% Upside Potential

Chuanhu Technology (2059), dubbed Taiwan's 'new stock king,' surged past 10,000 TWD before being placed under special trading surveillance. Despite market expectations of cooling momentum, the stock hit the daily limit of 12,220 TWD today (10th), marking another all-time high. However, the limit was broken within 10 minutes due to profit-taking, and volatility intensified at higher levels. With the stock price now at astronomical levels, is it still a good time to enter? Local brokerage reports still maintain a 'Buy' rating, and the latest target price has been revealed. What are they betting on—exploding AI server demand or the continuous value upgrade of high-end slide rails?

Hits Daily Limit on First Scrutiny Day—12,220 TWD Sets New Record High

Chuanhu officially entered special trading today, adopting the new rule of matching every two minutes. Yet, the change in trading mechanism did not dampen market enthusiasm. The stock opened directly at the daily limit of 12,220 TWD, marking its second consecutive day of limit-up trading and setting a new all-time high since listing.

With a peak intraday gain of 1,110 TWD, an investor holding one board lot (1,000 shares) could see a single-day paper profit increase of up to 1.11 million TWD. However, short-term profit-taking quickly emerged, and the limit was broken about 10 minutes after opening, with price volatility significantly widening.

Why Is Chuanhu's Stock Still Rising? AI Server Rails Are the Key Driver

Chuanhu's sustained stock price surge is primarily driven by rapidly increasing demand for AI servers. As NVIDIA's next-generation AI platforms, along with xAI and AWS, continue expanding AI data centers, server rack weight, power consumption, and structural complexity have all increased, fueling rapid growth in demand for high-end slide rails.

Compared to standard servers, AI servers demand higher load capacity, durability, and precision from rails, raising both technical barriers and per-unit value. Chuanhu, leveraging its long-standing patent portfolio and high market share, has become a key beneficiary in the AI server supply chain, attracting sustained investor interest.

Why Are Brokers Still Calling 'Buy'? High-End Rail Prices Exceed Expectations

Local brokers note that as next-gen AI server platforms like GB300, xAI, and AWS T3 ramp up production, technical requirements and product value for high-end rails continue to rise, with actual selling prices exceeding initial expectations.

Additionally, the benefits from new factory expansions and automated production are gradually materializing, further boosting profitability. As a result, local brokers maintain Chuanhu's 'Buy' rating and raise the target price to 17,500 TWD. Based on today's intraday high of 12,220 TWD, this implies approximately 43% upside potential.

Q2 Revenue Hits 10.83 Billion TWD, EPS 74.38 TWD—Profits Beat All Expectations

Chuanhu's Q2 revenue reached 10.83 billion TWD, up 98.7% quarter-on-quarter, driven by strong pull-in of GB300, xAI, and AWS T3 server rails. Gross margin further improved to 87.4%, up 9.7 percentage points QoQ, exceeding initial expectations.

In terms of profitability, Q2 operating profit hit 8.89 billion TWD, up 143% QoQ and 200% YoY. Pre-tax net profit reached 9.12 billion TWD, up 109% QoQ and 916% YoY. Earnings per share (EPS) reached 74.38 TWD, surpassing local broker and market expectations by 14% and 45% respectively, demonstrating strong profit growth momentum driven by AI server demand.

July Revenue Soars to 6.41 Billion TWD—Q3 EPS Forecast at 128.76 TWD

Entering Q3, Chuanhu's business momentum shows no signs of cooling. July revenue reached 6.41 billion TWD, up 44.2% MoM, significantly exceeding market expectations and indicating continued strong shipment demand for AI server-related products.

Local brokers currently estimate Chuanhu's Q3 revenue could reach 18.7 billion TWD, up 72.6% QoQ; gross margin is expected to remain around 87.2%. After-tax net profit is estimated at 12.27 billion TWD, up 73.1% QoQ and 283.8% YoY, with single-quarter EPS forecast at 128.76 TWD. If these estimates are realized, Chuanhu's quarterly profit scale could set another record high.

2026 and 2027 EPS Significantly Revised Upward—Growth Momentum Continues

Due to higher-than-expected price increases for next-gen AI platform rails, local brokers have further revised upward Chuanhu's 2026 and 2027 earnings forecasts, with EPS revised up by 54% and 73% respectively, reaching 369.2 TWD and 581.97 TWD.

In terms of valuation, brokers apply a 30x P/E ratio to 2027 EPS, deriving a target price of 17,500 TWD, and maintain the 'Buy' rating. The core rationale remains the rising unit prices of AI server rails, capacity expansion, and ongoing automation benefits.

Holds Over 3,600 Patents—AI Server Rail Market Share Aims for Over 90%

Chuanhu currently holds over 3,600 patents, establishing a high technical barrier in the high-end server rail sector. Brokers estimate its AI server rail market share will remain above 90%.

To meet growing AI server demand, Chuanhu is actively expanding capacity. The Houston, USA plant is expected to begin trial production in September, while Chuanyi Phase II is scheduled to commence operations in 2027. Phases III and V of Chuanyi have been accelerated by 1–2 years, with construction potentially starting by the end of 2026, further supporting growth demand from 2027 to 2029.

What Are AI Server Rails? Why Are They More Valuable Than Traditional Products?

Server rails primarily support chassis, allowing equipment to be pulled in and out of racks for easy installation, maintenance, and replacement. As AI servers integrate more GPUs, overall weight increases significantly. High-end rails must not only support higher loads but also ensure stability, durability, and long-term operation, resulting in significantly higher technical barriers than traditional server rails.

Due to these specification upgrades, the unit price and added value of high-end AI server rails have both increased. With global AI data centers continuing to expand, demand for high-end rails is expected to remain strong, making this a key reason why the market continues to favor Chuanhu's medium- to long-term outlook.

Chuanhu Key Highlights at a Glance

- Intraday high today: 12,220 TWD (new historical high) - Special trading mechanism: Matched every 2 minutes - Broker target price: 17,500 TWD - Q2 EPS: 74.38 TWD - Q3 EPS forecast: 128.76 TWD - 2026 EPS forecast: 369.2 TWD - 2027 EPS forecast: 581.97 TWD - AI server rail market share: Broker estimate >90% - Number of patents: Over 3,600

Stock Now Under Scrutiny—Short-Term Volatility Requires Caution

Although brokers remain bullish on Chuanhu's AI server upgrade trend and have revised up earnings forecasts for the next two years, the stock price has already risen rapidly and is now under special trading rules. Short-term position shifts and price volatility may further intensify.

Going forward, investors should monitor whether AI server pull-in momentum continues, new factory capacity ramps up smoothly, and high-end rail prices can be sustained. The market will also continue to scrutinize whether brokers' high growth forecasts for revenue and earnings can be gradually realized.