标题：Sevenstar Electronics Investment Value Analysis：Striving to become China’s leading semiconductor equipment manufacturer via the acquisition of NMC
发布日期：2016-03-25 7:27:39
内容： Private placement to fund acquisition of China’s premium semiconductor equipment manufacturer – Beijing NMC Domestic companies facing both challenges and opportunities in asemiconductor market with massive potential Playing to each other’s strengths with the acquisition of NMC. Expected to replicate the AMAT’s path to success and establish a semiconductor equipmentmanufacturing platform. Risks: (i) business development falling short of expectations; (ii) disappointing technology R&D. Earnings forecast, valuation and investing rating. We forecast its 2016-17E EPS to be Rmb0.27/0.32.The stock is currently trading at Rmb24.55, implying 2016/17 P/E and P/B of 89/76x and 3.6/3.4xrespectively. Due to the protracted R&D cycle and substantial investments involved in the production ofsemiconductor equipment, the acquisition of Beijing North Microelectronics is unlikely to give animmediate boost the Companyˇs earnings. Nevertheless, it will not undermine Sevenstarˇscompetitiveness and industry status. Within the A-share electronics sphere, semiconductor equipmentmanufacturers are highly sought after by investors thanks to their scarcity, while they are also expectedto benefit extensively from favorable industry policies. Drawing reference from the development path ofits peers, we are upbeat on the Companyˇs long-term prospects as we believe it will focus on bothorganic and inorganic growth going forward. Initiate coverage with BUY and a target price of Rmb29.5(4.3x P/B).
发布日期：2016-03-25 7:27:39
内容： Private placement to fund acquisition of China’s premium semiconductor equipment manufacturer – Beijing NMC Domestic companies facing both challenges and opportunities in asemiconductor market with massive potential Playing to each other’s strengths with the acquisition of NMC. Expected to replicate the AMAT’s path to success and establish a semiconductor equipmentmanufacturing platform. Risks: (i) business development falling short of expectations; (ii) disappointing technology R&D. Earnings forecast, valuation and investing rating. We forecast its 2016-17E EPS to be Rmb0.27/0.32.The stock is currently trading at Rmb24.55, implying 2016/17 P/E and P/B of 89/76x and 3.6/3.4xrespectively. Due to the protracted R&D cycle and substantial investments involved in the production ofsemiconductor equipment, the acquisition of Beijing North Microelectronics is unlikely to give animmediate boost the Companyˇs earnings. Nevertheless, it will not undermine Sevenstarˇscompetitiveness and industry status. Within the A-share electronics sphere, semiconductor equipmentmanufacturers are highly sought after by investors thanks to their scarcity, while they are also expectedto benefit extensively from favorable industry policies. Drawing reference from the development path ofits peers, we are upbeat on the Companyˇs long-term prospects as we believe it will focus on bothorganic and inorganic growth going forward. Initiate coverage with BUY and a target price of Rmb29.5(4.3x P/B).
