Title Teco (1504 TT) Buy, Raise TP to NT$35
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Title:Teco (1504 TT) Buy, Raise TP to NT$35
Download File:1504 TT Teco note 201027--sinopac.pdf 
Summary:Raise TP to NT$35 (1.1x 2021F P/B) from NT$29 (1x 2020F P/B); Maintain Buy: 1) Improved outlook for China market thanks to infrastructure projects, automotive market recovery, and Teco¡¯s niche-product promotions; 2) Order flow from US will improve in 2021F once capex spending picks up as uncertainties about the NOV 3 election and COVID-19 sequentially clear up; 3) Valuation: Teco is trading just below 1x 2021F P/B. Its P/B exceeded 1x during Teco¡¯s period of peak operations in 2012-2014. We therefore set our TP at 1.1x 2021F P/B as we expect Teco¡¯s earnings to revisit peak levels thanks to China¡¯s infrastructure building and the release of pent-up capex in the US after the election and on pandemic easing.
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