GioVision stock surges on CLSA’s recommendation

By Kevin Chen  /  Staff reporter

Fri, Oct 18, 2013 - Page 14

Digital surveillance equipment supplier GioVision Inc (奇偶) saw its shares soar by the maximum daily limit yesterday to their highest level in five years, after Hong Kong-based brokerage CLSA Global Markets said the company is its top pick among global Internet protocol (IP) camera makers.

The company’s share price rose 6.78 percent to NT$181 as 1.64 million shares were traded in yesterday’s session. The stock has gained more than half of its value since the beginning of this year, according to Taiwan Stock Exchange data.

Over the past two years, GeoVision shares have risen 75.73 percent, outperforming the broader market’s 12.24 percent gain over the same period, as the company expands its IP camera business amid increasing demand for surveillance equipment to monitor terrorist activities and vehicular traffic.

According to British market consultancy IMS Research, the global IP camera market will grow at a compound annual rate of 24 percent to about US$11 billion in 2015 from last year.

“With just 3 percent of the global market, GeoVision has ample room to grow,” CLSA analysts Leonne Chen and Cheng Chao-kang (鄭兆剛) said in a note released on Monday.

“GeoVision’s growth will outpace the industry’s due to its software expertise, strong channels and ability to switch easily from traditional closed-circuit TV systems,” the analysts said, adding that they expect the company’s sales to record a compound annual growth rate of 33 percent through 2015.

CLSA also said the company would benefit from increasing demand for sophisticated IP camera software, since customers favor applications that improve image quality by offering higher resolution, wider angles and low-light environment settings.

Founded in 1998 in Taipei, GeoVision is the nation’s second-largest maker of IP cameras, with shipments of 190,000 units this year.

It also supplies video cards and digital video recorders, as well as other products.

During the first nine months of the year, the company reported pre-tax earnings of NT$538 million (US$18.27 million), or NT$8.46 per share, up 11.6 percent year-on-year, while its revenue grew 17.8 percent to NT$1.7 billion over the same period.

CLSA forecast that the company’s earnings per share could grow by a compound annual rate of 25 percent in the period from last year to 2015 and offered a “buy” rating on GeoVision shares, for which it set a target price of NT$210.