Gaming products are bearing fruit
​MB vendors are less vulnerable to PC market weakness given their focus on the DIY market. Sector GM picked up in 2013 after the exit of tier-two names such as Intel and Hon Hai, leading to significant improvement in profit. Although the sector faced increased price competition in 2Q14, competition eased in 2015, with improved sector GM and earnings. MB players are enjoying better revenue/earnings vs. other PC vendors, as they make inroads into the high-ASP/high-GM gaming segment. However, 1H16 sales were weak due to soft demand in Europe and economic weakness in China. With Intel to launch Kaby Lake at the end of 3Q16 to early 4Q16, we expect demand to rise in 2H16F. We suggest investors accumulate quality MB names during the current weak seasonality. Our top pick is MSI (2377 TT), as its gaming products’ exposure continues increasing leading to higher revenue growth and profitability.
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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