Report
EUR 61.86 For Business Accounts Only

Cautious yet positive on 3Q16F outlook

​Mgmt remains cautious yet positive on 3Q16 thanks to peak seasonality & regaining tender orders. 1H16 sales were mainly driven by WLAN migration to 11ac, HDR-integrated 4KTV SoCs & Broadcom order gains. New products, including SSD (starting MP by year-end), automotive ICs & Type-C, have yet to make any contribution but will be the main growth drivers in the mid-/long term. We expect 2016/17 sales to grow 20%/6% YoY & raise our EPS forecasts by 4%/9% to NT$6.83/7.78. Realtek is trading at a 2016/17F P/E of 16x/14x, vs. its historical range of 8-20x. Our raised TP of NT$125 is based on a 2017F P/E of 16x.

Underlying
Realtek Semiconductor Corp

Realteck Semiconductor is a fabless designer and supplier of integrated circuits for network interface cards, or NIC ICs, and switches used in local area networks, or LANs. Co.'s principal products are the 10Mbps Ethernet and 100Mbps Fast Ethernet NIC ICs. Co. also designs and supplies integrated circuits for PC peripherals and multimedia products. Co.'s product lines comprised of data, voice, and image ICs. Co. organized its operation into five divisions: Communications Network Business Unit, Communications Network Marketing & Sales Division, Computer Peripheral Business Unit, Multi-Media Business Unit, UWB (Ultra-Wide Band) Business Unit.

Provider
Yuanta
Yuanta

​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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