Becoming the outperformer in the FPC Group
​We remain positive on FCFC due to 1) a 1Q16 earnings beat; 2) a solid core business outlook in 2016F; 3) an attractive valuation with strong earnings momentum. FCFC is now trading at a 2016F P/B of 1.6x, lower than its mid-cycle (2009-2015) valuation of 1.7x. Given strong earnings growth (outperforming other companies in FPC Group), better market sentiment and an attractive valuation, we lift our target P/B multiple to 2x 2016F BVPS from 1.9x, and derive a new TP of NT$100
Formosa Chemicals & Fibre is engaged in the manufacture and sales of petrochemical products including purified terephthalic acid, polystyrene, butadiene, stryene monomer ("SM"), SM polymer, benzene, toulene, p-xylene, o-xylene, nylon fiber and rayon staple fiber. Through its subsidiaries, Co. is also engaged in the manufacture and sales of rayon-grade wood pulp, machinery for chemical fibers, other industrial-grade chemical products and processed goods; spinning, weaving, dyeing and finishing of chemical fibers; water treatment; cable and machine installation; and import and export of aforementioned products and materials.
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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