Brighter 2017F outlook for orders & GM
​Reiterate BUY and lift our TP to NT$91: We continue to like Sercomm, with its position in the networking industry remaining solid, and given its exposure to the IoT & smart home segments. Following our channel checks, we are more positive on Sercomm’s order and GM outlook. As such, we raise our 2017F sales/earnings estimates by 3%/14%, implying growth of 6%/22% YoY, with EPS up to NT$7.1. We expect 1Q17F sales/earnings to decline only by 3%/11% QoQ despite low seasonality, thanks to new client wins and the commencement of shipments for new orders. We continue to expect record high sales & earnings in 2017F. We lift our TP to NT$91 based on 14x (unchanged) the higher average of our 2016/17F EPS of NT$6.5.
Sercomm Corp.. SerComm Corporation is a Taiwan-based company principally engaged in the research, development, manufacture and distribution of wireless network products and wired network products. The Company's main products include fixed mobile convergence products, broadband access equipment, smart home control devices, commercial working network equipment, home working network equipment and vehicle-carried communication equipment. The Company mainly distributes its products in overseas markets, such as the Americas, Asia and Europe.
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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