Daily BriefsTMT/Internet

TMT: HashiCorp, Arcadyan Technology, Benq Materials, Brillian Network & Automation, Catcher Technology, Chipmos Technologies, Apex International, Silergy Corp and more

In today’s briefing:

  • HashiCorp IPO: Serious Player in Multi-Cloud Infrastructure Automation Segment
  • Arcadyan (3596 TT) Sales to Break the Ceiling on New Capacity
  • BenQ Materials (8215 TT) Delayed Launch Schedule by the Automotive Client
  • Brillian Network & Automation (6788 TT) AMC Sales to Double on Client’s Capacity Expansion
  • Catcher (2474 TT) Impressive GM & High Dividend Yield
  • ChipMOS (8150 TT) Undemanding Valuation
  • Apex International (4927 TT) Impressive 3Q21 GM Robust Demand in 2022
  • Silergy-KY (6415 TT, TRADING BUY, NTD5,150)

HashiCorp IPO: Serious Player in Multi-Cloud Infrastructure Automation Segment

By Andrei Zakharov

  • HashiCorp is a cloud infrastructure automation company offering industry leading-products with high-profile customer list and freemium business model. The unicorn was backed by leading VC investors. 
  • HashiCorp is the open-source software company, which is well-positioned to gain market share in the cloud infrastructure, security and networking addressable markets. 
  • The company filed to go public this month. Our post-IPO valuation implies substantial upside potential to last private round valuation and we have favorable view of the upcoming IPO.

Arcadyan (3596 TT) Sales to Break the Ceiling on New Capacity

By Masterlink Securities

Upgrade to BUY. We forecast FY21 and FY22 EPS at NT$8.36 and NT$10.01, respectively. Considering that Arcadyan’s 3Q21 results were impressive, and that the new capacity will boost sales to break the ceiling, we upgrade our rating for the company to BUY with a TP of NT$140.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BenQ Materials (8215 TT) Delayed Launch Schedule by the Automotive Client

By Masterlink Securities

Downgrade to HOLD from BUY with a TP of NT$40. We believe that BenQ Materials’ business transformation plan is clear, with FY22 EPS estimated at NT$3.4. However, share prices are likely to experience fluctuations in the near term as short-term sales may be influenced by downside risks in the panel market and delayed progress in the EV business. Therefore, we downgrade BenQ Materials’ rating to HOLD from BUY, with a target price of NT$40.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Brillian Network & Automation (6788 TT) AMC Sales to Double on Client’s Capacity Expansion

By Masterlink Securities

Given that Brillian is a beneficiary of technology scaling and that the foundry client is aggressively expanding fabs, we expect FY22 sales and profit from the AMC free handling system to double. We forecast the company’s FY21 and FY22 EPS at NT$6.98 and NT$15.02, respectively, and assign BUY on Brillian, with a TP of NT$300 (20x FY22 PER).

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Catcher (2474 TT) Impressive GM & High Dividend Yield

By Masterlink Securities

 Upgrade to BUY, with a TP of NT$200. Although Catcher had sold its iPhone related business, it has been affected by material supply shortages in 2021. We project that Catcher’s FY22 EPS could top NT$10 after the problem of material shortages is improved. A significant booster for Catcher’s sales has not emerged yet, but the sign of reaching the bottom has appeared. In addition, Catcher is expected to pay out a cash dividend of NT$10 per share in the coming three years, which should support its share price. Considering limited downside risk and high dividend yield, we upgrade our rating on Catcher to BUY, with a TP of NT$200.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

ChipMOS (8150 TT) Undemanding Valuation

By Masterlink Securities

 We expect ChipMOS’ sales and profits to decline in 4Q21, with FY21 and FY22 EPS revised down to NT$6.62 and NT$6.75, respectively. However, given undemanding valuation amid high yield story, we reiterate BUY on the company, with target price trimmed to NT$66. ChipMOS’ 3Q21 GM missed expectations due to the increase in costs. Nonetheless, non-operating income propelled profits to achieve 108% of guidance. 4Q21 sales will slightly drop, which may also affect GM, with FY21 and FY22 EPS revised down to NT$6.62 and NT$6.75, respectively. ChipMOS is trading at 7x FY22 PER based on a recent share price of NT$46.9, which is still relatively cheap. However, given uncertainties in short-term demands for DDIC and memory products, sales and profits may decline from its peak. ChipMOS plans to distribute a dividend of NT$3.3-3.9 per share, with dividend payout ratio of 50-60%, and dividend yield of 7-8%. With that, we expect limited downside risks unless there is a significant drop in short-term profits. Therefore, we reiterate BUY on the company, with target price trimmed from NT$70 to NT$66.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Apex International (4927 TT) Impressive 3Q21 GM Robust Demand in 2022

By Masterlink Securities

 Better long-term profitability and cash dividend in the coming years. Apex has benefited from rising production in Southeast Asia fueled by capacity expansion. Product mix tilting toward high-end PCB applied to automobiles and high-end home appliances could further beef up profitability. With additional capacity coming on stream in 2H21-1H22, Apex’s sales should significantly increase. Accordingly, we forecast FY21 sales at NT$14.8bn (up 25% YoY), GM at 22%, and net profit at NT$1.3bn (up 12% YoY). Meanwhile, we raise FY21 and FY22 EPS forecasts to NT$7.08 and NT$9.95, respectively, and reiterate BUY on Apex with TP lifted to NT$115 (11x FY22 PER).

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Silergy-KY (6415 TT, TRADING BUY, NTD5,150)

By Capital Securities

Better-than-expected GM; recommend TRADING BUY . Silergy’s 3Q21 GM beat our forecast. Given tight foundry capacity and product/client mix improvement, Silergy’s GM is expected to stay at the high level in FY22. Additionally, Silergy guides a growth of 20~30% in FY22 revenue.. Silergy’s stock price hit our prior TP, partially pricing in catalysts. Recommend TRADING BUY with TP of NTD5700 (70x FY22 PER).

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

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