M&A continues with fast-growing subsidiaries
​Ennoconn posted strong sales growth of 119% YoY in 2015 thanks to new clients and acquisitions. We expect sales to grow nearly 40% in 2016/17F, much stronger than peers, while GM will also continue its uptrend. We reiterate BUY and lift our target P/E multiple from 22x to 24x, as Ennoconn enjoys greater order visibility & growth momentum in 2017/18F vs. peers. IPC names have also seen recent strong rallies and are trading at higher P/Es. Our new TP of NT$615 is derived from 2017F EPS, and implies 19.8% upside.
ENNOCONN CORPORATION is a Taiwan-based company principally engaged in the research, development, production and sales of computer hardware and software. The Company's main products include embedded computer cards and embedded system/quasi-system products for industrial computers. The Company's products are mainly used in terminal products, such as point-of-sale (POS) machines, large-scale game consoles, automatic control equipment, automatic teller machines (ATMs), lottery machines, electronic billboards, medical and care equipment, network storage equipment and set-top boxes. The Company also provides information software services. The Company distributes its products mainly to overseas markets, such as the Americas, the rest areas of Asia and Europe.
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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