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   Apr.20, 2015

  •  Taiwan Property & Asset Plays Weekly Briefing
  •  Taiwan Financials Weekly Briefing
  •  Taiwan Airlines Weekly Briefing


  Taiwan Land Development Co. (台開 2841 TT, NR, NT$17.25)  Mar.24, 2015
Unlocking the potential of the company's extraordinary land bank
  • Company set a record profit last year with gains from land sales and investment property revaluation.
  • Development of investment properties remains a key growth catalyst as company boasts 225k–ping of land bank with fair value of NT$15bn.
  • Although it's still unprofitable, the Kinmen BOT project continues to gain traction.
  • As company launched Hualien development project in partnership with Starwood Group, TLDC’s ongoing transition into a tourism play offers intriguing long-term upside.

  EVERLIGHT (2393 )    Apr. 02, 2015

  • Everlight exceeded our 4Q14 earnings forecast by 19.4%. This was attributed to the 1.6 ppts better than-expected GM of 24.3% resulted from lower-than-expected deprecation expenses. The company also enjoyed an exchange gain of NT$163m due to the depreciation of the NT dollar. For 2015, the company posted an EPS of NT$5.12, exceeded our forecast by 4.1%.
  • ? Demand for TV/Mobile LEDs still remains soft in early 2Q15 as Chinese clients are still digesting inventories and lowering the scale of component restocking for the upcoming May 1st Holiday sales. Thus, we now expect Everlight's sales to drop by 7% q-q in 1Q15 and improve by 10 % q-q in 2Q15 vs. our previous forecast of 3% q-q drop in 1Q15 and a 17% q-q growth in 2Q15. Lighting component is the key factor behind the growth in 2Q15 because of rising OEM orders from tier-one brands such as Philips (NL).
  • We forecast Everlight to deliver moderate growth of 14.1% y-y growth on sales in 2015, vs. its guidance of 10%-20% y-y growth. The growth is driven by 1) higher demand for lighting components from lighting OEMs and brands, 2) gains of new TV clients for flip-chip packaged LEDs which the associated shipment started in 2Q15, 3) strong growth seen in the demand for indoor display LEDs in China. Everlight has over 50% market share there. Net, we forecast Everlight’s EPS to be NT$5.75.
  • Higher sales mix on lighting and rising Dep. expenses from aggressive expansion cap margin improvement in long-run. We forecast Everlight’s GM to drop by 0.5 ppts y-y to 24.3% in 2015. The lighting components’ GM is still the lowest among all product lines in 2015-16 due to the intensifying pricing war and small impact on cost reduction from the limited uses of raw chips from Chinese chipmaker. Quality and patents are two big concerns. In addition, the rising deprecation expenses in 2015-16 resulted from the accelerating capacity expansion will erode margin too.
  • ? We sustain our LT rating at Hold and raise our 12-month target price at NT$78.0 for upward earnings revision in 2015. We lower our target multiple to 13.6x PER in view of the company's margin pressure and limited profitability improvements next year. We therefore suggest long-term investors may stay on the sidelines and wait for a better entry point. In light of limited upside at 11.3% and weak 2Q15, we also downgrade our ST rating to Hold.
 



Stock Info



 TAIEX 9533.98 
 Electronics Index 372.92 
 Financials Index 1150.17 




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