Title Netcom devices: Small cell product global shipment to jump 40% YoY in 2017F
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Title:Netcom devices: Small cell product global shipment to jump 40% YoY in 2017F
Download File:Netcom device industry note 161228--sinopac.pdf 
Summary:Netcom devices: Small cell product global shipment to jump 40% YoY in 2017F

IEK bases its growth estimate of 40% YoY on strong demand from Europe, the US, and China.

Our top Buys on the theme: ZTE, Sercomm, and Universal Microwave Tech:

  • The 40% growth estimate looks reasonable given insufficient bandwidth capacity now and the operation of new 4G frequency bands. ASP will also rise along with spec improvements.

  • Chinese device makers are poised to grow their market shares via the government’s localization policies and organic growth of the domestic market.

  • Given their comprehensive 4G small cell product portfolio and advanced progress in 5G small cell development, each of our top Buys will benefit from organic growth of the Chinese market. UMT will also benefit from a North American carrier’s project and small cell shipment growth of Chinese device customers.

  • Buy Universal Microwave Tech. (3491 TT), TP of NT$73 (12x 2017F P/E)

  • Buy Sercomm (5388 TT), TP of NT$92 (13x 2017F P/E)

  • Buy ZTE Corp. (763 HK), TP of HKD 13 (11x 2017F P/E)
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