Hermes Testing Solutions (7856), a semiconductor testing equipment maker, officially debuted on Taiwan’s OTC market on Sept. 22 after pricing its shares at NT$2,250, a level ABMedia said broke the record for the highest underwriting price in a Taiwan IPO. The stock opened at NT$4,400, putting the spotlight on its post-listing performance, share distribution and the valuation read-through for semiconductor testing names.
According to ABMedia, Hermes had already climbed to a record high above NT$5,445 on Taiwan’s emerging stock market before the listing, helped by demand tied to advanced packaging technologies such as CoWoS and silicon photonics, including CPO. During the public subscription stage, frozen capital reached NT$865.6 billion, while the winning rate was only about 0.29%, setting another market record.
Institutional bidding and retail subscription both drew heavy demand
The company’s IPO process drew unusually large amounts of capital from both institutions and retail investors. Qualified institutional bids totaled 18,232 lots, locking in more than NT$41 billion ahead of the listing.
The final auction results showed a lowest winning bid of NT$4,138, while the weighted average winning price for institutions reached NT$4,272.70. ABMedia said CTBC Bank also bid NT$4,174.13 and secured 23 lots as a strategic financial investment.
Under current rules, the public subscription price generally cannot exceed 1.15 times the auction floor price of NT$1,800, which capped the retail subscription price at NT$2,250. Based on the opening price of NT$4,400, the paper gain on one lot was more than NT$2 million.
Why the market assigned Hermes a premium valuation
ABMedia said the company’s high valuation is tied to the technology shift toward semiconductor miniaturization and heterogeneous integration.
- In co-packaged optics, Hermes is focused on testing equipment for photonic integrated circuits, or PICs, and has entered supply chains tied to advanced process nodes and silicon photonics testing.
- The report said semiconductor testing is directly linked to yield control, and once a tool passes customer certification, chipmakers tend to show strong stickiness. That creates high technical barriers and clearer order visibility.
- On operations, Hermes posted NT$2.668 billion in cumulative revenue for the first seven months of this year, up 128.18% year over year. First-half EPS came in at NT$21.5.
Valuation comparisons across Taiwan’s AI testing names
With Hermes listing at a price level above NT$2,000, the market has also raised its tolerance for higher price-to-earnings multiples among equipment suppliers with strong technical barriers. Veteran analyst Tsai Ming-han said Taiwan’s AI testing segment is currently led by four key companies, each with a different strategic position and valuation logic.
| Company | Core positioning | Estimated EPS / P/E this year | Estimated 2027 EPS / P/E | Investment profile |
|---|---|---|---|---|
| Hermes Testing (7856) | PIC/CPO testing equipment, advanced packaging validation standards | NT$26.6 / 180x | NT$101.5 / 47.4x | Growth valuation has been priced in early; focus is on earnings delivery |
| WinWay (6515) | High-end test sockets, benefiting from AI chip demand | NT$96.1 / 75.5x | NT$198.1 / 36.6x | Strongest operating growth momentum, suited to aggressive investors |
| MPI (6223) | Probe card leader; its silicon photonics testing equipment has been adopted by Samsung | NT$65.2 / 86.8x | NT$129.7 / 43.6x | Technically representative, with both TSMC and Samsung recognition |
| CHPT (6510) | Probe cards, load boards and broader testing engineering services | NT$63.6 / 56.7x | NT$113.9 / 31.7x | Near-term momentum is milder, with a lower P/E and a more defensive profile |
Tsai said the long-term trend for AI testing stocks remains constructive, but he also warned that Taiwan equities have already posted sizable gains and valuations are elevated. His advice was to avoid chasing names making fresh highs and instead build positions selectively on pullbacks.
Three variables the market is watching after the debut
The report also pointed to three risks or variables that investors should keep in mind even as the industry outlook remains clear over the longer run.
- First is profit-taking pressure on the first trading day. Hermes released 4,192 lots through the auction, with an average winning price of about NT$4,272, while retail winners held shares at NT$2,250. If intraday buying weakens, short-term volatility could intensify.
- Second is the shift in trading mechanics from the emerging market to the OTC market. The emerging market has no daily price limit, while the OTC market is subject to a 10% daily limit, meaning investors will scrutinize quarterly earnings delivery more closely.
- Third is valuation. Tsai said the sector’s P/E ratios have already moved into historically elevated territory, and he suggested using revenue momentum and 2027 earnings visibility as the main checkpoints.
ABMedia framed the Hermes listing as more than a single IPO event, saying it has also reignited valuation comparisons across semiconductor testing and AI testing-related stocks in Taiwan.