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Title:Landmark (3081 TT) Buy, TP: NT$385
Download File:3081 TT Landmark note 200806--sinopac.pdf 
 
Summary:Maintain Buy; reduce TP by ~6% to NT$385 (36x 2021F EPS): 1) We estimate LOMC・s back-end capacity for 5G applications will double in 2Q21. Given the tight UTR for LOMC・s current capacity and the outlook for sustained strong demand, we expect the new capacity to contribute materially in 2020. 2) LMOC・s sales weighting of 5G application in 2Q20 surpassed our expectation. Shipment of new 5G products with superior ASPs will ramp in 2021F to shore up the company・s 5G sales. 3) As 100G Si-photonics sales are tracking behind our expectation, we trim our 2020 and 2021 earnings forecasts. However, we project 400G deployment will take off in 2021 to fuel the company・s Si-photonics sales. 4) Valuation: The stock is trading at ~26x 2021F P/E, vs. historical band of 25-36x. After reapplying our 36x 2021F P/E to our new EPS estimate, we lower our TP from NT$408 to NT$385. We believe 36x is a reasonable target given the tailwinds from China・s 5G production localization, and 400G Si-photonic product shipment starting from 2021, which together will usher in a new round of growth.
  
Date:2020/08/06
Author:TaiwanResearch.com
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