New upcycle confirmed, but bears not likely giving up that easily
​Results/guidance are not bad, but bears will draw the market’s attention to 4Q16F, likely highlighting concerns on possible demand slowdown, lack of Cat 7 modem, etc. Nonetheless, we are eyeing its new 10nm (to debut at end-2016), which is the first time that MTK can catch up with (or even supersede) QCOM in the 4G era, and this will be a very strong catalyst for both share prices and margins, in our view. On a 6-12 month basis, MTK is indeed our top pick among blue chip semi names. Reiterate BUY and raise our TP to NT$288.
Mediatek is engaged in the research, development, manufacture and sales of multi-media integrated circuit ("IC"), IC for computer peripherals, IC for advanced consumer electronics, IC for other special applications and decoders of optical storage; software application design, testing, maintenance and technical consultation services for IC; the import and export of products related to IC. Co.'s product items include optical storage chipset; CD-ROM chipset and single chip, DVD-ROM chipset and single chip, CD-R/RW chipset, combi chipset; and advanced digital consumer chipset DVD-Player chipset (RF chip, servo controller chip and highly integrated chip).
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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