Positive guidance, but risk is on mgmt execution amid headwinds
​We lower our 2016F/17F EPS by 4%/7% to NT$6.8/7.0 (EPS growth of +5%/+2% YoY) and our HOLD TP to NT$71. 1Q16 EPS of only NT$1.15 (-17% YoY) missed our estimate by 23%, but 2Q/3Q16F sales guidance is bullish. Kinsus’ share price has fallen by over 15% since our March D/G. While 1Q16 EPS is a miss, bullish 2Q/3Q16F sales guidance (+10-15% QoQ for both 2Q/3Q) could draw ST interest in the stock. Risk is on mgmt execution amid structural headwinds in substrate.
Kinsus Interconnect Technology is principally engaged in the manufacture and distribution of electronic component, electronic materials, integrated circuits, electronic machinery and parts; the provision of business operation consultancy services. Co.'s main products include BGA substrate, plastic ball grid array, Muti-chip-Module, chip scale package, flip chip substrates, cavity down substrate, chip on flex, copper bump substrates and other related substrate.
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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