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• | Merry Electronics (2439 TT) U/G Buy; TP: NT$198 |  |
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• | Poya (5904 TT) Buy, TP: NT$490 | |
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• | Wiwynn (6669 TT) Buy, TP: NT$410 | |
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• | Bioteque (4107 TT) Buy, TP: NT$148 | |
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• | Eclat Textile (1476 TT) Neutral | |
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• | Elite Material (2383 TT) Buy, TP: NT$120 | |
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• | Catcher (2474 TT) Neutral | |
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• | Fusheng (6670 TT) Neutral | |
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• | Powertech (6239 TT) Buy, TP: NT$81 | |
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• | TaiDoc (4736 TT) Neutral | |
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| Title: | Merry Electronics (2439 TT) U/G Buy; TP: NT$198 |
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| Download File: | 2439 TT Merry note 190702--sinopac.pdf  |
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| Summary: | Upgrade to Buy, TP at NT$198 (14.5x fully diluted 2019 EPS):
1) Merry previously cautioned that demand from a major handset client would reflect low seasonality in 2Q19, but given Merry¡¯s strong TWS and speaker sales in APR-MAY, we think Merry¡¯s concerns were misplaced and expect Merry¡¯s 2Q19 operating results will show sequential improvement;
2) Entering into the 2H peak season, TWS and speaker businesses will continue to fuel operations, especially as Merry¡¯s penetration for speaker products within the major handset client is likely to climb to 56%. The tailwind from high-GM TWS and UTR gain will propel earnings sharply higher HoH in 2H19;
3) Merry looks undervalued at ~12x 2019 fully diluted EPS. We set our TP at 14.5x 2019F fully diluted EPS of NT$13.65 (or 13.2x undiluted EPS).
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| Date: | 2019/07/02 |
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| Author: | TaiwanResearch.com |
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Market Commentary