Stocks are cheap; we suggest focusing on fundamental outperformers
​Sector sales for May were up 4% MoM but down 2% YoY (largely dragged by Applerelated sales exposure). Looking into June, historical seasonal patterns show a slight MoM sales decline, and we do not see anything to alter the pattern this year. Despite an overall environment of lackluster tech demand, KYEC’s May sales rose to a new record high (+19% YoY) on bottom-up factors and it remains our sector top pick (see New record highs to drive valuation re-rating). Separately, PTI’s May sales also rose 11% YoY, and we believe the company will likely deliver record high sales sometime in 3Q16F (see One of the bright spots in tech). For reference, we estimate KYEC/PTI’s 2016F EPS will grow 30%/22% YoY, respectively.
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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