​We expect mild 2016F sales growth, with no clear signs of a near-term turnaround due to fierce competition. However, sales should be stronger in 2H16F. Merry gained orders from Chinese clients after its partnership with Luxshare. In our view, competition will also remain fierce during the year. 1Q16 sales were lower than our forecast and earnings were unexciting. However, we expect positive sales growth in 2Q16F, and a noticeable pick-up in 2H16F. The company has gained some orders from Chinese clients after introducing Luxshare as its strategic partner. However, it has not seen meaningful order gains from US clients. Our TP of NT$57 is based on 13x 2016F EPS.
Merry Electronics is engaged in the manufacture, modification, repair, sale, design and export of electric appliances, video and audio electronics products, wireless communication machinery, computer, consumer electronics products, auto control system, digital fire alarm system, and related electronics components. Co.'s main products include speaker systems, microphones, portable hands free and headsets.
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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