For a rough year with low expectations, not bad at all
​While we continue to base our thesis on the successful consolidation of ASE & SPIL in 1Q17, near-term sales & margin outlooks for both ATM & EMS are all better than feared. Our TP is still based on 2.2x 2017F BVPS (15% ROE) vs. its mid-cycle average of 1.8x P/B. For reference, SPIL (2325 TT; H-UPF) is already trading at 2.1x 2017F BVPS (16% ROE). Despite market concerns over ASE’s heavy sales exposure to Apple (we estimate it to be around 30-35% of its 2015 sales), ASE’s 2Q16 results were actually not bad. Within Taiwan’s Apple supply chain, ASE’s delivery surprises on the upside.
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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