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• | Sporton (6146 TT) Buy, TP: NT$316 |  |
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• | Wistron NeWeb (6285 TT) Buy, TP: NT$86 | |
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• | Fusheng Precision (6670 TT) Buy, lower TP to NT$213 | |
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• | Jourdeness (4190 TT) Buy, TP: NT$130 | |
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• | Airtac International (1590 TT) Buy, TP: NT$940 | |
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• | Nanya Tech (2408 TT) Buy, raise TP to NT$96 | |
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• | Makalot (1477 TT) Buy, raise TP to NT$245 | |
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• | Shin Zu Shing (3376 TT) Buy, TP: NT$180 | |
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• | Kinsus (3189 TT) Buy, TP: NT$109 | |
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• | Pacific Hospital Supply (4126 TT) D/G Neutral | |
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| Title: | Sporton (6146 TT) Buy, TP: NT$316 |
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| Download File: | 6146 TT Sporton note 201222--sinopac.pdf  |
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| Summary: | Maintain Buy, TP of NT$316 (30x 2021F P/E): 1) Sporton¡¯s 5G handset testing projects have grown from 12-13 projects in 2019 to 80 projects as of SEP in 2020. We estimate Sporton will test 100 5G handset models this year, surpassing the company¡¯s guidance of 80 models. 2) We raise our 4Q20 GM estimate from 45% to 46.1% and raise our 2021 GM estimate from 46.9% to 48.1%, and we raise our 2021 EPS estimate to NT$10.96 from NT$10.54. 3) Valuation: The stock is trading at 23x 201F P/E, vs. historical range of 15-30x. We set our TP at 30x because a) we anticipate an EPS leap forward in the 5G era (from NT$7.27 in 2019 to NT$8.28/NT$10.96 in 2020F/2021F) like we saw with the transition from 3G to 4G (EPS ramped from NT$5 to NT$7-8 level, b) we assume Sporton can achieve ROE of 30% in 2021F, and c) Sporton maintains a stable dividend payout of 80%. |
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| Date: | 2020/12/22 |
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| Author: | TaiwanResearch.com |
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Market Commentary