U/G Positive 2017F outlook supported by growth of new markets & client orders
​Upgrade to BUY & lift TP to NT$80: Given stronger microwave component segment growth, we turn positive on UMT’s 2017F outlook and raise our 2017F sales/earnings estimates notably by 11%/36% (or up 14%/29% YoY), with EPS of NT$5.7. In the short term, we believe December sales will hit a new high, with 4Q16 sales/earnings likely to reach record highs and EPS up to NT$1.7. We expect the company to regain sales/earnings growth momentum in 2017F, which will help boost investors’ interest in the stock, with its share price likely to reach its previous high. Our TP of NT$80 is derived from 14x (unchanged, based on domestic/overseas peers’ P/Es) 2017F EPS of NT$5.7.
Universal Microwave Technology, Inc. is a Taiwan-based company principally engaged in the design, research and development, manufacture and distribution of microwave components, antennas and radio frequency (RF) components. The Company's microwave components include diplexers, coupler components and transmission components. The microwave components are applied in point-to-point communication equipment, mobile communication base stations and broadband wireless transmission. The antennas are applied in radios, televisions, mobile communications, wireless Internet, location, navigation and tracking. The RF components are applied in communication base stations and connect within and between communication equipment. The Company distributes its products in Taiwan, Mainland China, Asia, Europe and Americas.
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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