Decent core business in 3Q16 with multiple catalysts ahead
​We transfer coverage with a BUY rating and TP of NT$57: Chipbond posted decent core business results in 3Q16, with all of the operating indicators ahead of guidance. Meanwhile, we see multiple catalysts into 4Q16/2017F, including: 1) better than seasonal DDI sell-through in the near term; 2) PA packaging migration to bumping/FC (from traditional WB); 3) Synaptics/Focaltech fast ramping TDDI (which carries a 40% ASP premium vs. general DDI for Chipbond); and 4) increasing 4K TV penetration and size migration. Chipbond’s share has underperformed this year as the market continues to worry about its potential share loss of iPhone 8 (once moving to OLED). However, we project the growth of its non-driver IC and increase in content value for both TDDI & TV will more than offset weakness. As a result, we reiterate BUY with an unchanged TP of NT$57. Our forecasts are also largely unchanged.
Chipbond Technology is engaged in the research, development, manufacture and sale of electronic and semiconductor products. Co. main products include wafer bumping service, gold bump, solder bump, chip on glass (COG), chip on film (COF), flip chip and tape carrier packaging.
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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