Stronger turnaround momentum in 2016F
​We again raise our 2016F sales/earnings forecasts by 4%/36%, with EPS up to NT$1.52, on the back of stronger turnaround momentum. We forecast 2016F sales to rise 13% YoY to a new high, driven by improved self-owned brand segment operations and sustained ODM segment growth. With the recovery of demand in Europe and the euro stabilization, Unizyx and Arcadyan (3596 TT; BUY) both posted strong 1Q16 results. Meanwhile, clients in North America were in the process of inventory adjustments in 1Q16. We now adopt a P/E valuation methodology as we expect 2016F EPS to grow to NT$1.52. Considering Unizyx’s1) significant 2016F net profit growth; and 2) operating turnaround, we derive our higher TP of NT$20 based on 13x 2016F EPS.
Unizyx Holding Corp is a Taiwan-based company mainly engaged in the products and services provision to telecommunications service providers, corporate users and home users. The main brand is Zyxel. The main products are broadband access equipment, including wireless and mobile client series, mobile base stations, fixed network client series; fiber optic equipment, including fiber optic client series, and central office equipment; enterprise user equipment, including Ethernet switches, enterprise wireless networking, network security products; home user equipment, including home networking equipment, full coverage wireless extension system, power line communication, digital home storage equipment and cloud services, multimedia networking, smart home cloud camera, Internet of Things, radio frequency equipment.
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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