Silitech Technology Corp (閎暉), the supplier of cellphone keypads to Nokia Oyj, surged by its daily limit for the second day as brokerages upgraded their target prices for the company.
Silitech jumped 6.7 percent to NT$104.50 at the close of Taipei trading, the highest since May 6 last year. Goldman Sachs Group Inc, Bank of America Corp’s Merrill Lynch unit and Macquarie Group Ltd increased their 12-month estimates on the stock. Nomura Holdings Inc raised its price target on Monday.
Goldman Sachs hoisted its target price 38 percent to NT$113 and kept the company at “neutral.” It said preliminary pretax income of NT$541 million beat the brokerage’s forecast by 40 percent to 50 percent on stronger-than-expected gross margins from improving factory use and production rates as well as from a greater focus on QWERTY keypads.
“We see the QWERTY keypad as the most important revenue and margin driver for Silitech as smartphone penetration increases,” Goldman Sachs wrote in a note.
Merrill Lynch upgraded its price estimate on the stock to NT$125 from NT$105, while keeping the company at “buy” and Macquarie Group Ltd increased its 12-month estimate to NT$130 from NT$100, maintaining an “outperform” rating.
Goldman said Silitech’s market-share gain could slow next year as the use of touch-screen smartphones increased. Nomura forecast global penetration of phones with touch-screen panels — such as Apple Inc’s iPhones, Palm Inc’s Pre phone and Research in Motion Ltd’s Storm handset — would rise to 20 percent next year from 15 percent this year.
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