Amid slower sales growth, 2016F EPS could still reach a record high
​We initiate coverage of Compeq with a BUY TP of NT$26 based on the avg. of 1.4x 2016F BVPS (14% ROE) and 10x 2016F EPS. In addition to its undemanding valuation, we believe Compeq will see above industry average sales & EPS growth in 2016F. Compeq is gaining shares from existing clients on superior product quality offerings. Off a high base in 2015, we expect it can still deliver 4%/4% YoY sales/EPS growth in 2016F, which is decent among iPhone plays. Its FPC business could also offer upside in the future. Compeq is a key HDI/anylayer supplier to a US handset/tablet maker and it has been gaining shares at this client over the past two years, and we estimate it now has a 15-20% share.
Compeq Manufacturing is engaged in the manufacture and sale of multi-layer printed circuit boards for computer use and product related services. Co.'s application of main products include: (i) computers: desk-top PC, laptop, work station, server and other computer peripherals; (ii) networking: hub, switch, router and other network equipments; (iii) telecommunication: mobile phone, base station and other telecom equipments; (iv) consumers related: LCD monitor, DSC, PDA, GPS and other consumer products; and (v) IC substrate: CPU, ASIC, MCU, system chipset, GPU and other IC packaging substrates.
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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