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Macquarie MarQuee Ideas
Removing Samsung, LG Innotek and
Wistron NeWeb
Samsung unlikely to outperform the Kospi; LGI upgraded
to Neutral, Wistron NeWeb’s earnings now more uncertain
We are removing three technology names from the Asia MarQuee list, two Buy
ideas and one from the Sell list. Samsung Electronics has struggled to perform
since the beginning of the year and last week, our analyst Daniel Kim lowered
his target price to Won 1.2m on concerns over TFT-LCD pricing. On the back of
this, he believes the stock will continue to struggle to outperform the market for
the rest of the year and we thus remove the idea from the MarQuee Buy List.
Wistron NeWeb, one of our Emerging Leaders Buy ideas, has proved a volatile
stock but with Joe Quinn today lowering his target price on its exposure to HTC
and a softer outlook for 2H, we also feel it is time to remove it from the list.
Finally, Ben Ban is today upgrading LG Innotek to Neutral from Underperform
on straight forward valuation grounds. The stock is down 29% since mid
December and has been one of the best performing MarQuee ideas but Ben
now feels the worst is behind the company and we remove it from the Sell list.
Why we’re keeping Samsung Electronics as an Outperform
Last week, Daniel Kim lowered his target price on SEC, saying he now believes
the company’s Display Panel unit is unlikely to turnaround in 2Q11 due to poor
execution and the prolonged bottoming process in LCD. He still sees SEC as
attractive at 9x 2011E PER on improving earnings quality and sees the Galaxy II
sales figures as a potential positive catalyst for the stock but with headwinds in
the TFT-LCD business picking up pace, we remove it from the Buy list.
Wistron NeWeb – lower TP but keeping Outperform
Joe Quinn is today lowering his target price on Wistron NeWeb to NT$120 from
NT$130 on worries over a softer outlook for 2H caused in part by growing
uncertainty on the company’s LDS Antenna exposure to HTC. However, Joe
keeps his Outperform rating on WNC as he continues to believe that areas such
as LDS antennas, digital home and smartphone customers will continue to grow
to their longer-term trend despite this near-term bump.
LG Innotech upgraded to Neutral
Ben Ban says LGI’s valuation has fallen substantially as the share price has
corrected by 37% from its peak in January but with a price to book of just 1.3x
and the company now generating positive OPM, he believes the share price
should hold at these levels. In addition, he believes LGI can now manage its
balance sheet from internal cash flow and with capex set to fall by 50% from last
year, the worst is now behind the stock. Hence, he leaves his long-standing
negative stand on LGI behind and upgrades his rating to Neutral.
Ongoing Macquarie MarQuee Idea list
The full list of Asia MarQuee stocks is detailed in Figs 1 and 2 inside, along with
a list and links to recently published research on MarQuee stocks.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Macquarie MarQuee Ideas
Removing Samsung, LG Innotek and
Wistron NeWeb
Samsung unlikely to outperform the Kospi; LGI upgraded
to Neutral, Wistron NeWeb’s earnings now more uncertain
We are removing three technology names from the Asia MarQuee list, two Buy
ideas and one from the Sell list. Samsung Electronics has struggled to perform
since the beginning of the year and last week, our analyst Daniel Kim lowered
his target price to Won 1.2m on concerns over TFT-LCD pricing. On the back of
this, he believes the stock will continue to struggle to outperform the market for
the rest of the year and we thus remove the idea from the MarQuee Buy List.
Wistron NeWeb, one of our Emerging Leaders Buy ideas, has proved a volatile
stock but with Joe Quinn today lowering his target price on its exposure to HTC
and a softer outlook for 2H, we also feel it is time to remove it from the list.
Finally, Ben Ban is today upgrading LG Innotek to Neutral from Underperform
on straight forward valuation grounds. The stock is down 29% since mid
December and has been one of the best performing MarQuee ideas but Ben
now feels the worst is behind the company and we remove it from the Sell list.
Why we’re keeping Samsung Electronics as an Outperform
Last week, Daniel Kim lowered his target price on SEC, saying he now believes
the company’s Display Panel unit is unlikely to turnaround in 2Q11 due to poor
execution and the prolonged bottoming process in LCD. He still sees SEC as
attractive at 9x 2011E PER on improving earnings quality and sees the Galaxy II
sales figures as a potential positive catalyst for the stock but with headwinds in
the TFT-LCD business picking up pace, we remove it from the Buy list.
Wistron NeWeb – lower TP but keeping Outperform
Joe Quinn is today lowering his target price on Wistron NeWeb to NT$120 from
NT$130 on worries over a softer outlook for 2H caused in part by growing
uncertainty on the company’s LDS Antenna exposure to HTC. However, Joe
keeps his Outperform rating on WNC as he continues to believe that areas such
as LDS antennas, digital home and smartphone customers will continue to grow
to their longer-term trend despite this near-term bump.
LG Innotech upgraded to Neutral
Ben Ban says LGI’s valuation has fallen substantially as the share price has
corrected by 37% from its peak in January but with a price to book of just 1.3x
and the company now generating positive OPM, he believes the share price
should hold at these levels. In addition, he believes LGI can now manage its
balance sheet from internal cash flow and with capex set to fall by 50% from last
year, the worst is now behind the stock. Hence, he leaves his long-standing
negative stand on LGI behind and upgrades his rating to Neutral.
Ongoing Macquarie MarQuee Idea list
The full list of Asia MarQuee stocks is detailed in Figs 1 and 2 inside, along with
a list and links to recently published research on MarQuee stocks.
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