D/G - Glass casing concern could be real
​We downgrade Catcher to HOLD-OPF from Buy, cut our TP to NT$245 from NT$360, and lower our 2016/17F EPS forecasts by 5%/20%, as we factor in lower iPhone shipment estimates and ASP (2H17’s iPhone). Previously, we had a Buy on Catcher because of its share gains and metal casing spec migration (i.e., 7000-series in 2H15, waterproof in 2H16). However, we now expect Catcher’s iPhone business to be under pressure in 2H17/2018, as glass casing/metal frame will likely replace the unibody metal casing in iPhone (5.8†and 4.7â€). We note this is a late downgrade, but we expect its share price to consolidate in the near to mid-term, as time is needed for the market (14 BUYs, 11 HOLDs/SELLs on Bloomberg) to digest the impact of new casing material
Catcher Technology is engaged in the manufacture, processing and sale of aluminum, magnesium alloy compression casting and moulds; and lease of land and factory buildings. Co. provides one-stop shopping services to its clients. Co. also provides customers different options on forming process and surface treatment, e.g. extrusion, stamping, forging, and injection mold for different materials. In addition, Co. is engaged in general investments; trading businesses; and manufacture and sale of moulds and electronic components. Co.'s major products include laptop as well as consumer electronic products and parts. Co. operates principally in Taiwan and the People's Republic of China.
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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