Waiting for the transition to complete
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A prolonged business transition and creation of M&A synergy mean that the increasing expense burden from R&D and M&A activities may result in muted earnings growth in the coming two-three years. On April 29 after market close, Delta held its 1Q16 investor conference with GM/EPS coming in at 26.9%/NT$1.5, largely in line with the Street’s expectation (26.5%-27.5%/NT$1.4-1.6). 2Q16 guidance for sales to grow 10-15% QoQ and for GM to improve sequentially is also in line with market expectation. Therefore, we keep our 2016/17 EPS forecasts unchanged at NT$7.6/NT$8.1 and also maintain our TP of NT$152.
Delta Electronics is engaged in the installation of electronic control system; the manufacture of power supply unit for computer, computer information system, and electronic engine; and the manufacture, design and sale of communication products and components. Through its subsidiaries, Co. is engaged in the manufacture and sale of electronic control equipment, transformer, electronic devices and products, solar battery, integrated circuits, networking system and peripherals equipment; equity investment; and the provision of information software services.
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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