Twin power engines speed up
​We initiate coverage on SZS with a BUY rating and a TP of NT$135. SZS is the world’s No.1 NB hinge maker and has diversified into the high-margin MIM business in recent years. Impacted by MacBook weakness, SZS’s share price has underperformed the TAIEX by 20% YTD. However, with sales/earnings YoY turning positive and a strong 2H16/2017, we expect the trend to reverse. Our TP of NT$135 is based on 13x 2017F EPS, which is in line with its historical P/E average given our expectation of EPS growing 21% YoY in 2017F, vs. 18% CAGR in 2012-15.
Shin Zu Shing is engaged the research, development, design, manufacture, assembly, testing and sale precision springs, stamping products, hinge assemblies for computers, communication, digital and electronics products. Co. also engaged in the manufacture and sale of metal injection moldings, lathe and plastics products.
Yuanta is a Taiwan-headquartered brokerage with a growing presence in Asia, especially across Greater China. Our team of 140+ provides cutting-edge analysis on key sectors, spread across offices in Taiwan, Hong Kong, Shanghai (A-Share), Seoul and Jakarta. With an ever-expanding coverage universe of 400+ companies, we provide in depth analysis with unique local color to investors. Consistently being voted the Best Investment Consulting Firm in Taiwan in the AsiaMoney broker poll is evidence of our strength. We target providing an extensive range of research, from small, to mid-sized, to large cap. We bring you the big, well-covered names, as well as going off the beaten track to research the less-familiar companies.
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