SinoPac Securities Investment Service Corp (永豐投顧) has given broadband and wireless networking equipment maker Sercomm Corp (中磊) a long-term “buy” rating with a target price of NT$88.
The stock on Friday ended down 1.74 percent at NT$79, while the local stock exchange’s benchmark index, the TAIEX, closed 0.39 percent lower.
In an investment note issued on Friday, SinoPac said current orders exceeded the company’s shipments despite Sercomm’s expanding production capacity in Taiwan and the Philippines, which suggests strong sales growth in the second half of this year.
In the first eight months of the year, the company’s cumulative revenue totaled NT$18.9 billion (US$608.9 million), down 10.12 percent from NT$21.03 billion in the same period last year.
“Although we trimmed our estimate of the company’s 4G small cell product shipments in 2020, as it will be affected by Rakuten Mobile Inc’s delayed completion of 4G base station construction in the short term, we still expect shipment growth in 2020 due to a low base [in 2019] and rising demand from US carriers,” SinoPac said.
Sercomm supplies small cell base stations to Rakuten Mobile, which is Japan’s fourth broadband network operator and the first in the country to adopt virtual radio access network technology.
Rakuten has delayed the nationwide launch of its mobile service planned for next month and instead is preparing a trial service for a limited number of subscribers from Oct. 1, before rolling out full-scale services in April next year, Japanese news outlets reported earlier this month.
As Chinese-made network products and surveillance devices have triggered concerns over information security among US clients, some US vendors have transferred their orders to Sercomm.
The firm also aims to supply broadband products to telecom operators directly, instead of supplying them through system integrators, to boost revenue growth with a higher gross margin.
Sercomm is likely to begin shipments for 5G small cell products in 2021, SinoPac said.
Sercomm reported net profits of NT$391.21 million in the first half of the year, up from NT$323.09 million a year earlier, with earnings per share of NT$1.6, company data showed.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts