Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

Hon Hai Precision Industry / Equity Bottom-Up

<ul>
<li>The revenue/ gross profit/ GM %/ EPS is NT$1,889.8bn/ NT$113.9bn/ 6.03%/ NT3.2 in 4Q21. 4Q21 revenue is growth 34% QoQ, but growing -5.9% YoY.</li>
<li>We expect the material shortage would become more stabilized in 2H22. The revenue was better than expected since 2021, and it will become more challenging in 2022. </li>
<li>2025 EV revenue is about US$600bn. Hon Hai is targeting at 5% market share and aim at US$1,000bn revenue scale.</li>
</ul>


The revenue/ gross profit/ GM %/ EPS is NT$1,889.8bn/ NT$113.9bn/ 6.03%/ NT3.2 in 4Q21. 4Q21 revenue is growth 34% QoQ, but growing -5.9% YoY.
We expect the material shortage would become more stabilized in 2H22. The revenue was better than expected since 2021, and it will become more challenging in 2022. 
2025 EV revenue is about US$600bn. Hon Hai is targeting at 5% market share and aim at US$1,000bn revenue scale.


Hon Hai(2317.TT): It Will Be More Challenging in 2022, but Hon Hai Will Focus on EPS.

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

The existence of the annual cap from BYD Electronics to the BYD group which then sells the masks to the distributors or end customers through BYD Care (a subsidiary of BYD Group), BYD Electronics will see an increase in revenues but not so much of the increase in the margin as BYD Care (the seller of surgical masks) is a subsidiary of <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> rather than BYD Electronics. Among Trump's outperforming Biden in the first Presidential debate, an attempt to make up for the loss, overly bullish investors in China's plan on domestic consumption and surgical masks production, <a href="https://www.smartkarma.com/entities/byd-electronic-international-co-ltd" target="_blank" data-smartkarma-citation="entities:1927:1" rel="noopener">BYD Electronics (285 HK)</a> share price rose close to 10% today makes an attractive entry point to shorting the stock. Size up your bet!

The existence of the annual cap from BYD Electronics to the BYD group which then sells the masks to the distributors or end customers through BYD Care (a subsidiary of BYD Group), BYD Electronics will see an increase in revenues but not so much of the increase in the margin as BYD Care (the seller of surgical masks) is a subsidiary of BYD (1211 HK) rather than BYD Electronics. Among Trump's outperforming Biden in the first Presidential debate, an attempt to make up for the loss, overly bullish investors in China's plan on domestic consumption and surgical masks production, BYD Electronics (285 HK) share price rose close to 10% today makes an attractive entry point to shorting the stock. Size up your bet!

BYD Electronics (285): Where Is the Margin At?

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Wiwynn is a cloud computing infrastructure provider who develops high-density computing and storage products and rack solutions for data centers. The company has grown its earnings significantly over the past couple of years due to strong demand for servers.
We are positive about Wiwynn’s future growth prospects as the launch of 5G would further increase demand for cloud services. In addition, the ongoing Covid-19 pandemic has resulted in strong demand for data centers which bodes well for Wiwynn. Furthermore, Wiwynn regularly develops new products to suit technological developments that should help the company win more new customers.

Wiwynn is a cloud computing infrastructure provider who develops high-density computing and storage products and rack solutions for data centers. The company has grown its earnings significantly over the past couple of years due to strong demand for servers.
We are positive about Wiwynn’s future growth prospects as the launch of 5G would further increase demand for cloud services. In addition, the ongoing Covid-19 pandemic has resulted in strong demand for data centers which bodes well for Wiwynn. Furthermore, Wiwynn regularly develops new products to suit technological developments that should help the company win more new customers.

Wiwynn: Strong Server Demand and New Customer Wins to Drive Growth

<ul>
<li>Hon Hai Precision Industry reported its 1Q2020 financial results on 15th May 2020. During 1Q2020, the company’s revenue and operating profit dropped by 11.9% and 71.9% respectively. Despite revenue and OP declining YoY, the company managed to beat consensus estimates on both revenue and OP during the quarter.</li>
<li>The COVID-19 outbreak in China during 1Q2020 caused the decline in revenue and margins of the company. The company previously warned investors that the COVID-19 outbreak will likely have a negative impact on the company’s revenues in 2020 while also cutting its revenue growth outlook for 2020.</li>
</ul>


Hon Hai Precision Industry reported its 1Q2020 financial results on 15th May 2020. During 1Q2020, the company’s revenue and operating profit dropped by 11.9% and 71.9% respectively. Despite revenue and OP declining YoY, the company managed to beat consensus estimates on both revenue and OP during the quarter.
The COVID-19 outbreak in China during 1Q2020 caused the decline in revenue and margins of the company. The company previously warned investors that the COVID-19 outbreak will likely have a negative impact on the company’s revenues in 2020 while also cutting its revenue growth outlook for 2020.


Hon Hai: 1Q20 Beats Consensus Despite Pandemic Impact; LT Prospects Remain Positive

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

In our October International Strategy, we outline important technical levels across markets and highlight various themes which lead to our neutral outlook, along with areas of the market where we see actionable opportunities, including Japan, and global technology.

In our October International Strategy, we outline important technical levels across markets and highlight various themes which lead to our neutral outlook, along with areas of the market where we see actionable opportunities, including Japan, and global technology.

Global Equity Strategy: Neutral Outlook Intact, Japan and Global Tech Are Bright Spots.

Taiwan

Wistron Corporation manufactures and markets notebook computers, personal computers, and other related information products.

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Wistron Corp (3231 TT)

Hon Hai(2317.TT): It Will Be More Challenging in 2022, but Hon Hai Will Focus on EPS.

Revenue was better than expected in 2021, and it will be more challenging in 2022. Hon Hai will focus on getting more clients’ orders and maximize...

Patrick Liao

BYD Electronics (285): Where Is the Margin At?

The share price increase of close to 10% today makes a more attractive entry point to shorting BYD Electronics.

Henry Soediarko

Wiwynn: Strong Server Demand and New Customer Wins to Drive Growth

Wiwynn is a cloud computing infrastructure provider who develops high-density computing and storage products and rack solutions for data centers....

Shifara Samsudeen, FCMA, CGMA

Hon Hai: 1Q20 Beats Consensus Despite Pandemic Impact; LT Prospects Remain Positive

Hon Hai Precision Industry reported its 1Q2020 financial results on 15th May 2020. During 1Q2020, the company’s revenue and operating profit...

Shifara Samsudeen, FCMA, CGMA

Global Equity Strategy: Neutral Outlook Intact, Japan and Global Tech Are Bright Spots.

In our October International Strategy, we outline important technical levels across markets and highlight various themes which lead to our neutral...

Vermilion Research

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