德银台湾硬件与设备行业iPhone发布相关的的百万美元问题获得了结还是补仓20170912Deuts

DeutscheBankMarketsResearchAsiaTaiwanTechnologyHardware&EquipmentIndustryGreaterChinasmartphoneDate12September2017IndustryUpdateThemillion-dollarquestiononiPhonelaunch:profit-takingoraddpositions?MixedviewsfrominvestorsonthenewiPhonelaunch________________________________________________________________________________________________________________DeutscheBankAG/HongKongDeutscheBankdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Thus,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.DISCLOSURESANDANALYSTCERTIFICATIONSARELOCATEDINAPPENDIX1.MCI(P)083/04/2017.BirdyLuResearchAnalyst(+886)[e-mail]logy(2474.TW),TWD359.50BuyLARGANPrecision(3008.TW),TWD5,825.00BuyAACTechnologies(2018.HK),HKD139.60BuyHonHai(2317.TW),TWD116.00BuySource:DeutscheBankCompaniesFeaturedCatcherTechnology(2474.TW),TWD359.50Buy2016A2017E2018EP/E(x)8.411.08.0EV/EBITDA(x)3.44.43.3Price/book(x)1.42.01.7LARGANPrecision(3008.TW),TWD5,825.00Buy2016A2017E2018EP/E(x)18.027.217.4EV/EBITDA(x)11.819.412.5Price/book(x)6.68.06.0AACTechnologies(2018.HK),HKD139.60Buy2016A2017E2018EP/E(x)17.124.619.0EV/EBITDA(x)12.618.513.7Price/book(x)5.78.36.4HonHai(2317.TW),TWD116.00Buy2016A2017E2018EP/E(x)8.813.211.7EV/EBITDA(x)3.45.74.9Price/book(x)1.41.81.7Source:DeutscheBankApplewillreleasethenewiPhoneon12Sep.9AM,PDT(13Sep.1AM,HKtime).Atthistimeofyear,thereisalwaysthequestionof“shouldonetakeprofits”or“shouldoneaddtopositions”.Webelievetakingprofitscouldworkn-term,buttakingalargerpositionshouldprevailforthelongrun.Historicaldata(Fig.1)showstier-oneAsianiPhonesupplierstendtounderperformfortwomonthspostareleaseevent,asmostnewphonefeatureshavebeenwidelyanticipated.However,mostofthemtendtooutperformafternear-termbumps,asAppleimpressestheworldwithnewfeaturesinnextyear’siPhone.Forthe2018newiPhone,thenewfeaturecouldbetheadvancedAR.Whyprofittakingmakesenseinthenearterm?Similartoprioryears,afterallnewfeatureshavebeenwidelydiscussed(anOLEDdisplay,afront-facing3Dsensing,wireless-charging,anddouble-sidedglassdesigns),theknee-jerkreactionfromtrading-orientedinvestorswouldbe“takeprofitsnow,andaddtopositionslaterifthenewiPhonesell-throughprovestobegood”.AsillustratedinFigure1,overthepastfiveyears,thesharepricesoftier-oneiPhonesuppliersinAsiasurged7%inatwo-monthperiodpriortothenewiPhonereleasedate,butdeclined0%-4%fortwomonthsafterthelaunchdate.WhocouldberelativelyvulnerablepostthenewiPhonereleasein2017?Inourview,iPhonecomponentsuppliersinHongKong/Chinacouldbemorevulnerabletoprofittaking.Theirsharepriceshaverallied14.7%onaverageoverthepastonemonth(Figure2).Ontheotherend,itseemsprofittakingonTaiwanesenamesarealreadyinplace,withCatcherandHonHai’ssharepricesdown3.4%and0.4%,respectively,overthepastmonth(vstheTAIEX’sriseof2.6%).Whywerecommendaddingmoretopositionsforthelongterm?Forthelongterm,wecontinuetoliketier-oneiPhonecomponentsuppliers,astheyareinabetterpositiontocapturetheiPhone’sspecupgradecycle.Figures3-6showthesharepricesoftier-onevendorshaveconsistentlytrendedupoverthepastfiveyearsdespitenear-termprofit-taking.ForthenewiPhonein2018,advancedAR(AugmentedReality)couldbethenewfeatureinourview,enabledbytheadditionofarear-facing3Dsensingmodule.Also,Applemightbringthefulldisplaydesign(whichonlyappearsinthepremiumSKUin2017)toeverynewiPhoneSKUin2018.Topbuys,valuationandinvestmentrisksLarganandAACareourpreferrediPhone8beneficiariesfromatop-downperspective(ASPhike,resultingfromspecupgrades)inourGreaterChinacoverage.Fromabottom-upview(sharegainpotential),Catcherisourfavourite,asweestimateitsmarketshareiniPhonecasingswilllikelygrowfrom~18%in2016to~35%in2019E.OurtargetpricesarederivedfromPERorPBR(seepage5fordetails).DownsiderisksincludeweakiPhonedemand,aggressivepricecutandslowspecupgrades.Distributedon:12/09/201707:24:26GMT0bed7b6cf11c12September2017Hardware&EquipmentGreaterChinasmartphonePage2DeutscheBankAG/HongKongNewiPhonelaunchProfit-takingoraddingtopositions?Whyprofittakingmakesenseinthenearterm?Similartoprioryears,afterallnewfeatureshavebeenwidelydiscussed(anOLEDdisplay,afront-facing3Dsensing,wireless-charging,anddouble-sidedglassdesigns),theknee-jerkreactionfromtrading-orientedinvestorswouldbe“takeprofitsnow,andaddtopositionslaterifthenewiPhonesell-throughprovestobegood”.AsillustratedinFigure1,overthepastfiveyears,thesharepricesoftier-oneiPhonesuppliersinAsiasurged7%inatwo-monthperiodpriortothenewiPhonereleasedate,butdeclined0%-4%fortwomonthsafterthelaunchdate.Figure1:iPhonesupplychain’sperformancebefore/aftertheiPhonelaunch201620152014201320125-yearaverage76S65S57/9/20169/9/20159/9/201410/9/201312/9/20122mPriorPerformance7%-4%9%12%17%8%2mPostPerformance1%1%-6%-4%-3%-2%2mPriorPerformance29%-14%3%6%12%7%2mPostPerformance-11%-7%-12%-1%7%-5%2mPriorPerformance35%14%-5%7%17%14%2mPostPerformance-20%8%-5%-20%8%-6%2mPriorPerformance10%-11%8%0%-17%-2%2mPostPerformance-8%-4%-13%20%-8%-3%2mPriorPerformance10%-1