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UBS Investment Research
Asia Tech
Alpha Preferences
Most Preferred: Removing Novatek
We remove Novatek Micro from our most preferred, given near term momentum
for share price would remain range bound due to the weak 4Q10 margins (25.1%
in Q4 vs. 27.8% in Q3) and would remain flattish in 1Q11E as per company’s
guidance as ASP to remain flattish QoQ. UBS Analyst Samson Hung remains
positive (Buy rating) on stock given the multiple growth drivers for 2011 and
attractive dividend yield of 6%.
Most Preferred: Adding Samsung Electronics
The DRAM cycle shows sign of bottoming out, with likely below-average ‘12E
supply growth to look for. We view Samsung as a compelling Mobile Computing
play for ‘11E with NAND Flash to account for 23% of ‘11E OP,
Smartphones/tablets 19%, Mobile DRAM 14%, Semis LSI 4% and Mobile
Displays 4%. We see the announcement of the 2nd gen Galaxy Tab (possibly for
MWC 14-17 Feb) and release of Galaxy S2 in 2Q11 as positive catalysts.
Neutral view on Asia Tech
Valuation Of Asia Tech stocks is less compelling (15.5x ‘11E EPS) post recent
rally and we continue to expect a near term correction. We would advice to
selectivity buy share-gainers, particularly on weakness, and avoid high multiple
stocks for now
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Asia Tech
Alpha Preferences
Most Preferred: Removing Novatek
We remove Novatek Micro from our most preferred, given near term momentum
for share price would remain range bound due to the weak 4Q10 margins (25.1%
in Q4 vs. 27.8% in Q3) and would remain flattish in 1Q11E as per company’s
guidance as ASP to remain flattish QoQ. UBS Analyst Samson Hung remains
positive (Buy rating) on stock given the multiple growth drivers for 2011 and
attractive dividend yield of 6%.
Most Preferred: Adding Samsung Electronics
The DRAM cycle shows sign of bottoming out, with likely below-average ‘12E
supply growth to look for. We view Samsung as a compelling Mobile Computing
play for ‘11E with NAND Flash to account for 23% of ‘11E OP,
Smartphones/tablets 19%, Mobile DRAM 14%, Semis LSI 4% and Mobile
Displays 4%. We see the announcement of the 2nd gen Galaxy Tab (possibly for
MWC 14-17 Feb) and release of Galaxy S2 in 2Q11 as positive catalysts.
Neutral view on Asia Tech
Valuation Of Asia Tech stocks is less compelling (15.5x ‘11E EPS) post recent
rally and we continue to expect a near term correction. We would advice to
selectivity buy share-gainers, particularly on weakness, and avoid high multiple
stocks for now
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