Report
EUR 56.04 For Business Accounts Only

Valuation difference starting to matter on cyclical downturn

​ASE’s 2Q16F IC backend sales guidance of +9% QoQ is in line with SPIL’s. But its Apple-heavy EMS guidance (likely -5% QoQ) will be a drag on its consolidated 2Q16F sales. Compared to SPIL, ASE’s P/B is much cheaper and we suggest to buy on a dip. Despite a surprising beat on 1Q16 EPS, overall growth outlook related to Apple (30-35% of its 2015 sales based on our estimate) continues to deteriorate, thus leading to our EPS forecast cuts. Our new TP is now based on the avg. of 2.0x (previously 2.5x) 2016F BVPS (12% ROE) and 6.0x (previously 7.5x) 2016F EV/EBITDA (see Valuation for details).

Underlying
Advanced Semiconductor Engineering

Provider
Yuanta
Yuanta

​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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