Focus stock: Shihlin Paper expects AI applications to drive growth, briefly hits limit-up

Shihlin Paper is moving beyond traditional synthetic-fiber products and into materials for the artificial-intelligence hardware market. The company is targeting AI racks, GPUs and CPUs, with some products already in delivery and talks under way on new material development.

Investor interest pushed the company’s shares sharply higher in morning trading. The stock briefly touched the limit-up price of NT$27.05 and was trading at NT$25.60, up 4.07%, at 9:36 a.m., with 36,288 lots changing hands.

AI-related applications still make up less than 10% of Shihlin Paper’s revenue, according to the company’s estimate. It said the proportion could exceed 10% by the end of the year when combined with the business of its subsidiary Shinsor, as production capacity and utilization gradually increase. The company hopes AI-related revenue will eventually account for 20% to 30%.

The traditional synthetic-fiber business is entering its seasonal peak in the second half of the year, and the company expects performance not to be worse than in the first half. It is also developing differentiated products in response to brand customers’ efforts to reduce reliance on China and to ESG-related trends, including a recyclable single-material stretch product being developed with a partner.