AMOLED is the recent bright spot
​We remain positive on Sino Wealth as we believe it will continue to benefit from the government’s policy of supporting local chip makers. As it is the only supplier able to mass produce AMOLED driver ICs in China, we believe it will be the major beneficiary as China panel makers aggressively expand OLED capacity. Mgmt guided 1H16 net profit to grow 73%-92%, which is 30% higher than our estimate. We raise our 2016/17F earnings forecasts by 33%/5% and now estimate 2016/17/18F EPS to grow to RMB0.48/0.6/0.83 on the back of better than expected 1H16 earnings and a positive outlook. We reiterate BUY and raise our TP to RMB58, based on a 2018F P/E of 70x.
Sino Wealth Electronic Ltd. is a China-based company principally engaged in the design and sale of integrated circuit chips, as well as the provision of related systematic solutions and after-sale technical supporting services. The Company's main products consist of mast control single chips and driver chips used in new display screens. The Company's products are applied in home appliances, frequency conversion and electromechanical control, lithium battery power management, smart meters and Internet of things, wearable applications and display drives of Passive-Matrix Organic Light-Emitting Diode (PMOLED) and Active-Matrix Organic Light-Emitting Diode (AMOLED). The Company distributes its products in domestic market and to overseas markets.
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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