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UBS Investment Research
Asia Tech
A lpha Preferences
Removing ZTE from our Most preferred list
We remove ZTE from our most preferred list as we believe it would face near term
headwind from a market-to-market loss of Nationz (around Rmb85m), where ZTE
holds 10% stake and FX losses of around Rmb 200mn. However, the UBS Buy
thesis remains unchanged, as expect GM to improve sequentially in 3Q driven by
the smartphone segment. Next catalyst for stock would be the capex hike by China
telcos, especially China Mobile and Unicom (likely to announce early next year).
Removing Pegatron from Least pref. list
We remove Pegatron from our least preferred list after the stock is down 31% YTD
and has underperformed the broader market by 12.4%. The company registered
strong 3Q11 sales driven by stronger comm. revenue, which UBS Analyst Patrick
Chen ests. were up 10-15% QoQ (vs. flat guidance) on ramping iPhone 4S
shipments. Patrick believes there could be upside to Q3 margins due to higher
utilisation at both NB and smartphones on stronger than expected shipments.
However, maintains the Sell rating as he does not expect company to turn Op.
Profit in Q3.
Remain O/W Wireless, Memory & Foundries
Most Preferred: Kinsus, Hynix Semiconductor, Samsung Electronics, TPK
Holding, & TSMC; Least Preferred: Acer, Nanya PCB, HCL Tech Hon Hai and
Wintek
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Asia Tech
A lpha Preferences
Removing ZTE from our Most preferred list
We remove ZTE from our most preferred list as we believe it would face near term
headwind from a market-to-market loss of Nationz (around Rmb85m), where ZTE
holds 10% stake and FX losses of around Rmb 200mn. However, the UBS Buy
thesis remains unchanged, as expect GM to improve sequentially in 3Q driven by
the smartphone segment. Next catalyst for stock would be the capex hike by China
telcos, especially China Mobile and Unicom (likely to announce early next year).
Removing Pegatron from Least pref. list
We remove Pegatron from our least preferred list after the stock is down 31% YTD
and has underperformed the broader market by 12.4%. The company registered
strong 3Q11 sales driven by stronger comm. revenue, which UBS Analyst Patrick
Chen ests. were up 10-15% QoQ (vs. flat guidance) on ramping iPhone 4S
shipments. Patrick believes there could be upside to Q3 margins due to higher
utilisation at both NB and smartphones on stronger than expected shipments.
However, maintains the Sell rating as he does not expect company to turn Op.
Profit in Q3.
Remain O/W Wireless, Memory & Foundries
Most Preferred: Kinsus, Hynix Semiconductor, Samsung Electronics, TPK
Holding, & TSMC; Least Preferred: Acer, Nanya PCB, HCL Tech Hon Hai and
Wintek
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