Stronger momentum from 2Q16F onwards
​We trim our 2016F sales/earnings forecasts by 5% after reviewing orders of each product line. However, we still expect 2016F sales/op. profit to grow 24%/26% YoY to new highs, with EPS of NT$4.9. We also expect 2Q16 sales to grow 18% QoQ, likely to a new high, thanks to 1) new orders of microwave components; and 2) shipments of Radiation Tech’s large energy antenna order. UMT is also a beneficiary of 4G network infrastructure demand and IoT plays. Our TP of NT$79 is based on a 2016F P/E of 16x to our EPS forecast of NT$4.9. We maintain our target P/E multiple, which is based on the average P/E from domestic and global peers, and apply a target P/E of 15x to UMT’s intrinsic value, and 20x for Radiation Tech, an IoT play.
Universal Microwave Technology, Inc. is a Taiwan-based company principally engaged in the design, research and development, manufacture and distribution of microwave components, antennas and radio frequency (RF) components. The Company's microwave components include diplexers, coupler components and transmission components. The microwave components are applied in point-to-point communication equipment, mobile communication base stations and broadband wireless transmission. The antennas are applied in radios, televisions, mobile communications, wireless Internet, location, navigation and tracking. The RF components are applied in communication base stations and connect within and between communication equipment. The Company distributes its products in Taiwan, Mainland China, Asia, Europe and Americas.
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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