Cheap valuation with emerging new growth opportunities
​Everlight is trading at a trough P/B of 1.2x but with 11% ROE and 6% cash yield. In 2012, it traded at a P/B of 1.1x but with only 4% ROE. We believe potential rush orders into 2H16 (as ASP started to show stabilization) and its increasing presence in infrared (IR) & automotive LED are the key catalysts to watch. Our TP is still based on 1.4x 2016F BVPS, which is at a steep 35% discount vs. its 2009-14 avg. P/B, despite the ROE being the same at 11% (see valuation section for details). On P/E, it is trading at only 12x 2016F EPS vs. its historical range of 15-20x.
Everlight Electronics is principally engaged in the manufacture and sale of optoelectronic components. Co. operates its businesses through three segments: light emitting diode (LED), light crystal display (LCD) and other. The LED segment provides LED lamp, LED backlighting, digit/dot matrix display, low/middle/high power LED, surface mount device LED, infrared LED, LED customized module, photo sensor module, photo transistor, photo coupler and optoelectronic integrated circuits. The LCD segment provides LCD panel and liquid crystal module. The other segment is engaged in the sale of raw materials for electronic products, masks and electro-phoretic displays.
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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