Growth drivers unclear
​With the IC substrate, HDI and PCB industries all facing hardships, it is hard to see how Unimicron can perform well when its share gains are not clear. While there has been ongoing M&A speculation on the stock given its low P/B, we are not sure where the synergy exists. : Despite a 1Q16 earnings miss, GM was slightly better than expected. As such, we apply a higher GM forecast and edge up our EPS forecasts. Given negligible impact on book value and ROE, our TP remains unchanged at NT$14.5 which is still based on a distressed 2016F BVPS of 0.5x (2% ROE).
Unimicron Technology is engaged in the manufacture, processing and sale of printed circuit boards, electrical engineering equipment and materials, electronic products, integrated circuit products testing and preburning systems. Co.'s products include single or multi-layer CSP (chip scale package), BGA (ball grid array), SIP (system in package), Embedded Passive Product, super thin substrate, Flip Chip Substrate, HDI (high density interconnect ) PCB, high layer count PCB (up to 30 layers), Rigid-Flex, CSP (chip scale package used in cell phones and PDA), multiplayer CSP, and PBGA (plastic ball grid array package).
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