Report
EUR 61.86 For Business Accounts Only

2Q16 GM beat; recovery story intact

​Reiterate BUY and lift TP to NT$78: As we doubt the sustainability of rising raw material prices given the lack of strong demand, unlike the Street, we believe GM could remain at 31%+ in 2016/17F. With shipment growth and gradually stabilizing tire prices, we believe the long-awaited recovery will not be short-lived and expect 18%/11% YoY earnings growth in 2016/17F. We reiterate BUY and lift our TP to NT$78 based on 15x 2017F EPS, rolling over to 2017F EPS (vs. 17x 2016F EPS previously).

Underlying
Cheng Shin Rubber Ind. Co. Ltd.

Cheng Shin Rubber Industries is engaged in processing, manufacturing and selling rickshaw tires, motor vehicles tires, reclaimed rubber, adhesive tape resin and other rubber products.

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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