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• | Yeong Guan Energy Tech (1589 TT) Buy, TP: NT$80 |  |
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• | Landmark (3081 TT) Buy, TP: NT$303 (31x 2020F P/E) | |
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• | Hon Hai (2317 TT) Buy, TP: NT$110 | |
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• | Wiwynn (6669 TT) Buy, TP: NT$620 | |
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• | Eclat (1476 TT) Buy, TP: NT$486 | |
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• | ChipMOS Technologies (8150 TT) Buy, TP: NT$40 | |
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• | Realtek (2379 TT) Buy, TP: NT$270 | |
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• | Mediatek (2454 TT) Buy, TP: NT$490 | |
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• | Novatek (3034 TT) Buy, Raise TP to NT$284 | |
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• | Parade Technologies (4966 TT) Buy, raise TP to NT$706 | |
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| Title: | Yeong Guan Energy Tech (1589 TT) Buy, TP: NT$80 |
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| Download File: | 1589 TT Yeong Guan Energy - YGG note 191114--sinopac.pdf  |
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| Summary: | Yeong Guan Energy Tech (1589 TT) Buy, TP: NT$80
"YoY momentum will sustain throughout 2021"
SinoPac View: We expect YGG will grow its EPS from NT$0.75 for 2019F to NT$3.03 for 2020F via more small energy casting part orders, capacity optimization, and improved efficiency of existing plants.
Raise TP by 25% to NT$80 (1x 2020F P/B); Maintain Buy: 1) Unit shipment of small energy casting parts will grow by >20% in 2020, helped by capacity optimization, higher turn rate (TR) of production line, and efficiency gains of existing plants, and unit shipment of large products will increase in 2021 when the Site 1, Phase 2 of Jiangsu Bright Steel Fine Machinery (¡°JBS,¡± a YGG¡¯s subsidiary) is to commence operations. 2) We anticipate GM/OPM upside from continuous optimization in factories and better financial management. 3) YGG has sped up its capacity building in China, Taiwan, and Thailand to profit from the huge potential of the offshore wind energy market. We raise our TP from previous NT$64 (0.8x 2019F P/B) considering YGG¡¯s turn to profit in 2Q19 and its long-term competitiveness in the offshore wind energy market.
Our 2019 estimates:
- Sales at NT$7.84bn (+26.6% YoY)
- Op. profit at NT$229mn
- Net profit at NT$79.6mn, or EPS at NT$0.75
Our 2020 estimates:
- Sales at NT$9.02bn (+15.1% YoY)
- Op. profit at NT$481mn
- Net profit at NT$321mn, or EPS at NT$3.03 (vs. previous estimate at NT$2.9)
Reason for Note: Company Update, TP Revision
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| Date: | 2019/11/18 |
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| Author: | TaiwanResearch.com |
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Market Commentary