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2017F optical communication orders a major factor for operational grow...
​Reiterate BUY and raise our TP to NT$59: We believe operations have bottomed in 3/4Q16 and are likely to see QoQ growth in 1Q17F. For its LD/VCSEL epiwafer business, the company currently has three clients, and we expect these clients to become its biggest growth driver in 2017F if epiwafer shipments go smoothly. We also expect GM to benefit from better product mix thanks to higher sales exposure to optical communication products. After resuming trading on October 7 following its capital redu...
Decent 2016/17F outlook; capital reduction shows strong ambition
​VPEC attended the Yuanta Asia Forum on June 21. Mgmt indicated 1) LD epiwafers are undergoing 3,000-hour (for FTTH)/5,000-hour (for base stations) durability tests; mass production should start in 4Q16 at the earliest; 2) it is positive on increasing PA applications and growing PA number per unit in view of handset band expansion, carrier aggregation (CA) technology, MIMO antenna, the rise of IoT, and greater 11ac adoption; 3) it aims for half-half OC/PA sales exposure in the next three or fo...
Bright outlook despite industry uncertainty
​We trim our 2016F sales/earnings forecasts to reflect growing industry uncertainties, but still expect VPEC’s sales/earnings to hit new highs this year. Favorable trends in the PA industry will help offset concerns on sales of Apple’s new models. Despite uncertainties in the demand for optical communication products, VPEC will be less impacted vs. peers as it will begin to supply LD epiwafers in 2H16F. Our TP of NT$60 is based on 22x 2016F EPS of NT$2.73. As the company posted weak April ...
Bright outlook despite industry uncertainty (Includes erratum)
​We trim our 2016F sales/earnings forecasts to reflect growing industry uncertainties, but still expect VPEC’s sales/earnings to hit new highs this year. Favorable trends in the PA industry will help offset concerns on sales of Apple’s new models. Despite uncertainties in the demand for optical communication products, VPEC will be less impacted vs. peers as it will begin to supply LD epiwafers in 2H16F. Our TP of NT$60 is based on 22x 2016F EPS of NT$2.73. As the company posted weak April ...
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