Lower TP(Target Price) to factor in 2009 earnings
Lower TP to factor in 09E earnings decline despite capex discipline
With LED oversupply concerns in 2009, we project 2009E gross margin of Epistar could retreat to 21.1% from the estimated 23.2% in 2008. Similarly we project Everlight’s 2009E gross margin could decline to
25.3% from the estimated 27% in 2008.
Thus, Epistar’s and Everlight’s 2009 EPS are estimated to decline by 14% y-y and 22% y-y to TWD 1.63 and TWD 3.53, respectively. We believe the market will gradually factor in their downward EPS trend. Hence, we reset Epistar’s target price based on 2009 earnings at TWD 35.80 (22x 2009E EPS), representing a 13% downside and Everlight’s TP at TWD 58.20 (16.5x 2009E EPS), 16% downside. We reiterate REDUCE on both counters; however, with capex discipline on the cards, supply growth could shrink to 52% y-y in 2008 and 28% y-y in 2009 vs. original estimation of 75% y-y and 45% y-y, respectively. This would imply the sector could be able to recover from oversupply earlier than expected.
1H09 oversupply view persists; to hurt their profitability
The LED global capacity has expanded since 2007 throughout 2008, supply rose 89% y-y and 75% y-y, respectively. We expect a 45% y-y rise in global capacity in 2009 while growth in demand is only at 42% y-y
and 37% y-y in 2008 and 2009, respectively. We therefore reiterate our oversupply view in 2009 and project LED price could drop by 35% in 2009 and sabotage Epistar’s and Everlight’s 2009 profitability. Epistar’s
2009E EPS is projected to drop by 14% to TWD 1.63 from 2008E’s TWD 1.90. Although Everlight’s 2009E sales could rise 13% y-y, its 2009E EPS could drop to TWD 3.53 (from 2008E’s TWD4.50).
Signs of easing in capacity expansion
Based on our recent channel checks, we are surprised to hear LED upstream makers considering postponing the MOCVD equipment moviein schedule to 2009 or even cancelling some MOCVD tools purchase orders. The total 2008 MOCVD tool installation in Taiwan may be lowered to 60-70 units from 90-100 units in 2008. If Taiwan LED makers stick to capex discipline, global supply growth could decline to 52% y-y in 2008 and 28% y-y in 2009, while we estimate global growth in demand of 42% y-y in 2008 and 37% y-y in 2009. Thus, oversupply could recover earlier than expected.
以上是法國巴黎銀行(The BNP Paribas Angle)所出具對台灣LED產業的研究報告！
其中Epistar就是晶電(2448)，而Everlight就是億光(2393)，從該份研究報告中我們看到，由於LED產業的超額供給情況將持續到2009年，因此預估晶電的毛利率將由08年的23.2%下滑到21.1%，億光的毛利率則是從27%下滑到25.3%，他們的EPS預估將較08年衰退14%與22%，分別降低到TWD 1.63元與TWD 3.53元 (TWD為Taiwan Dollar的簡稱，即為新台幣，亦有以NTD表示，因為NTD即為 New Taiwan Dollar的簡稱)。BNP給予晶電與億光的投資評等(Rating)為降低持股(Reduce)，目標價分別是TWD 35.8元(22x 2009E EPS)與TWD 58.2元(16.5x 2009E EPS)。
相較於8/4 BNP給億光與晶電的目標價(71.8元與54.1元)而言，此次下調目標價的幅度達18.9%與33.8%，時間相隔僅約1個半月！如果我們把時間再拉回到更早的6/12，根據我手邊BNP同一位分析人員(Skye Chen)的報告指出，當時建議億光與晶電的目標價在73元與128元，與今天的35.8及58.2元相比較，短短三個月的時間，目標價降幅達51%與54.5%，相當令人訝異的差距。
為什麼會有如此驚人的差距？難道LED產業景氣反轉速度如此之外，三個月前是接單暢旺供不應求，三個月後變成供給過剩？當然不可能，廠房要擴建、機器設備要購置與安裝、正式生產前要試俥，光是生產前的預備動作就至少要半年以上了，不是嗎？
其實主要問題出在對於公司與產業的預期。LED是個變化極大的產業，新技術與新製程不斷的出現，半年前的明星產品在半年後可能充斥於市場中，一年後反而變成極為普遍的產品了(例如白光LED)。也因為這樣的產業特性，一旦明星產品問世後，市場與分析人員會有過度樂觀的預期，例如LED應用於照明設備、面板(TFT LCD)背光源…等應用層面，在2008年上半年就被市場宣揚的沸沸騰騰，似乎前景一片光明，根本找不到一片烏雲。
就簡單的供需層面來看LED產業的話，在供給面的部分，由於擁有技術專利的日本與歐洲廠商，會視情況調整授權廠商的數量，這將會把製造風險轉嫁給沒有專利但有生產能力的廠商，再加上取得授權後的廠商，要擴充生產規模的困難度並不高，因此供給面是呈現難以估計的狀況。至於需求面的情況也是如此，超高亮度的白光LED雖然應用層面廣泛，但是成本依舊居高不下，相較於傳統的照明設備來說，相對價格的部分，仍無法達到吸引消費者全面換購的需求，這使得需求面出現曲高和寡的狀況，大家對於LED應用層面的預期縱使樂觀，但是根本無法準確估計未來一個年度的可能需求。
然而需求面過度樂觀的預期，總是抵擋不了時間的驗證，隨著獲利數字一季一季的出爐，市場與分析人員不斷修正預估獲利，也因此目標價會一再地調降。下圖是億光與晶電的歷史本益比與股價淨值比：
從上圖看晶電(Epistar)，2005～2007年的EPS其實變化不大，但是股價卻從低於40元大漲至180元，億光的EPS也不過從2005年的5.04元成長到2007年的6.55元，EPS在這二年間的成長率是30%，但是股價卻是從30元漲到160元左右。
從圖上我們看到了晶電曾經出現高於40倍本益比與8倍股價淨值比的情況，就算連續三年該公司EPS都呈現每年30%的高成長，超過40倍本益比的情況也不太合理，更何況晶電與億光都沒有這種高成長的歷史紀錄。
無論外資或本土券商的研究報告，其實都是遵循費雪(Philip Fisher)的定性分析原則，費雪認為僅僅閱讀公司財務報告並不足以判斷是否應該投資，而應盡可能地從熟悉該公司的人士獲取第一手資訊，此種方式已成爲目前基金經理人選股前的必備條件。
問題就出在第一手資訊是否屬於正確的判斷？！在此我們先不考慮蓄意釋放的假消息，都將第一手資訊視為真實呈現，然而資訊的來源出自於公司內部，而供給過剩的原因則來自於多數廠商大幅度擴產，換言之，廠商因為看好未來發產，所以大幅度擴產，未料到供給大幅度增加後，需求增加的狀況並不如預期，結果導致供給過剩的情況，在廠商錯誤判斷之際，分析人員從廠商那裡取回了錯誤的第一手資訊，結果造成了錯誤的獲利預估與價值研判。
上述的情況經常發生在供需變動幅度大的產業身上，尤其是高科技產業，這也告訴了我們一件事，就算你不是價值投資者，也不要輕易投資於不穩定的產業與公司，縱使市場對於該產業與公司未來的前景十分樂觀。在此我們強調的不穩定指的是產業的供需狀態與公司的獲利狀態，而且就算獲利大幅度成長，他所代表的依舊是不穩定，因為大成長的背後隱含著大衰退的可能。
巴菲特在2000年網路泡沫發生前，因為一直沒投資科技股，甚至被知名雜誌撰文譏笑巴菲特已經落伍，結果網路泡沫被戳破後，市場才再度發現….原來價值投資法是唯一經的起長時間考驗的投資方式。
同樣的狀況也發生在中國，巴菲特在2003年以每股1.6～1.7港元的價位購入中石油H股，2007年七月開始減持，經過七次減持後，約在14.5港元清倉中石油，結果中石油的股價一路漲過20港元，當時中國媒體與網友就曾經不斷表示，價值投資法不一定適用在中國，而股神巴菲特也會在中國股市錯看行情！經過了短短三個月，中石油的股價跌落到10港元以下，現在只剩8.35港元。
——————————以下為10.13.2008更新內容———————————
Taiwan: Technology: Hardware – Electronic Components
Excitement on LED-backlit NB realistic? Sell Epistar into strength
Major PC OEMs intend to scale up LED-backlit notebooks
Our US tech team believes that the trend toward LED backlighting could accelerate in 1H09, as both Dell and HP are considering following Apple’s product strategy of moving to LED backlighting for “up-specing”. Dell
plans to have at least 80% of its notebook (NB) models equipped with LED backlighting by end-2009.
Market expectations of LED NB penetration revised downward
We take a more conservative view on the penetration rate of LED NB in the next 12 months. So far, LED backlighting has been mainly equipped in higher-end NBs. With the current weak economic environment hampering consumer spending, demand for these products has been affected. Our channel checks with major Taiwanese backlight makers suggest that the LED:CCFL backlight ratio in NBs was about 1:10 in 3Q08 and they expect this to rise to 1.5:10 in 4Q08, excluding mini-notes. This is lower than market expectations and some panel makers’ forecasts of 20%-25% by end-2008.
Taiwanese LED makers may not be beneficiaries
In our view, rising adoption of LED backlighting in NBs will benefit industry leaders such as Nichia and Toyoda Gosei, and we do not expect Taiwanese LED companies to benefit from this trend. In the absence of
adequate patent protection, we believe Taiwanese LED upstream players’ opportunity will lie in receiving outsourcing orders from other leading LED players, rather than “direct” business from PC OEMs.
Sell into strength on high LED NB market expectations
Epistar(晶電 ; 2448) and Everlight(億光 ; 2393) currently trade at 17.4X/11.4X 2009E P/E, respectively, a premium to other Taiwanese technology stocks at 9.9X. We remain on the sidelines for Everlight and would reduce positions in Epistar shares on the back of a potential share price spike on recent higher seasonal demand and high market expectations for LED-backlit NB demand. We retain our Sell rating on Epistar with 12-month DCF-based TP of NT$36.9 (implying 19% downside) and a Neutral rating on Everlight with 12-month DCF-based TP of NT$67.8.
Risk
Better-than-expected demand in LED end-markets, more stable price trend and an earlier-than-expected global economic recovery.
以上為高盛對於LED產業的研究報告摘要，該報告中肯定LED背光源在NB的滲透率會提高，但是台灣廠商將無法直接受惠，只能由Nichia 、Toyoda Gosei 的轉單而接到部分訂單。而且晶電與億光相對於其他台灣科技股而言，目前的P/E存在著明顯的溢價現象(尤其是晶電)，因此維持晶電的賣出評等，12個月的目標價訂在36.9元，億光則為中立評等，12個月的目標價訂在67.8元 [以DCF (Discounted Cash Flow ; 現金流量折現) 模式評價]。
全文閱讀高盛出具的LED產業研究報告請按 led-backlight-nb-goldman-sachs
10/31 更新 晶電2448 研究報告
Epistar Corp. (晶電 2448) - Merrill Lynch Research
3Q results far below expectations, Underperform
We retain our negative view on TWN LED sector and our Underperform on Epistar with a PO of NT$27 (0.8x 09E P/B) as we believe risk/reward remains unattractive. The share price has underperformed TAIEX 25% YTD, but we see further de-rating risk after shockingly poor 3Q results and believe high valuations are not justified by the weak fundamentals.
全文閱讀請按 Epistar 2448 晶電 研究報告
PS：晶電在10月30日公布季報，今年第三季平均毛利率由上季的20%以上，大幅滑落到16.8%左右，第三季單季營業利益9800多萬元，單季稅後淨利8300餘萬元，單季每股稅後盈餘0.11元。累計今年前三季營業利益6.1億元，稅後淨利5.96億元，前三季每股稅後盈餘0.94元，較去年同期的2.95元大幅衰退。主因是產品組合調整效益不彰。
12/28 新增
Everlight Electronics Co., Ltd. (億光 2393) – Merrill Lynch Investment Research
Headwinds persist , Underperform
PO cut to NT$36 to on weak fundamentals, Underperform
We reiterate Underperform on Everlight and lower 08/09E earnings by 5%/41% to reflect softening near-term fundamentals and weakening 09 outlook. We cut PO from NT$44 to NT$36, implying 1.25x PBV or 13.6x 09E, and expect street to have to further lower forecasts. Our checks confirm that 4Q is decelerating rapidly, while 09 visibility remains low amidst an increasingly cautious tone.
4Q sales down ~15% QoQ; GPM remain flat on better mix
Mgmt guided 4Q sales to decline ~15% QoQ, implying Dec sales to drop another 20% MoM. Utilization rate is falling (60% in 4Q vs 70% in 3Q) due to slowing end demand, but mgmt expects GPM will remain flat due to better high-end handset LEDs (ML 25.2% vs 26.3% in 3Q and earnings decline of 20% QoQ, 50% YoY).
欲閱讀全文者請按 Everlight Electronics 2393 億光 研究報告 – 美林
2009 02/25 新增
Everlight Electronics Co., Ltd. (億光 2393) – Goldman Sachs Research
Neo Neon profit warning: Negative implication for LED supply chain
Neo Neon (1868.HK; NC), the world’s largest LED decorative lighting maker, on January 9 announced a profit warning suggesting considerably lower net profit in 2008 than 2007. We note that 1H08 net profit grew 30% yoy, which implies likely very weak 2H08 results. We believe this echoes our view that consumer-oriented LED products are experiencing severe pressure in this downturn. Moreover, we now believe it is possible that Everlight may book a non-operating loss in 4Q08 (equity investment loss and write-off of convertible bond revaluation gains from previous quarters), which would pose downside risk to our estimates and consensus. Reiterate Sell.
欲閱讀全文者請按 2393 億光 研究報告 – 高盛 ，另提供 2393 億光 研究報告 – 美林. 予各位一併參考
Epistar Corp. (晶電 2448) - Goldman Sachs Research
Wider-than-expected 4Q08 loss a near-term negative; reiterate Sell
We expect Epistar to be loss-making in 4Q08 for the first time in the past four years. With utilization sliding to <50% in Dec and likely continuing to trend lower in Jan (<30%), the bottom line will remain under pressure in 1Q09. Moreover, we are concerned that Epistar may recognize significant losses from inventory write-offs during 4Q08/1Q09 given falling ASP, unexpected order cancellations, and adoption of SFAS No. 10. We expect a 4Q08 net loss of NT$437mn vs. consensus ranging from NT$312mn profit to NT$86mn loss. Despite recent share price resilience on possible restocking demand, the weak 4Q08 earnings and dull 1H09 outlook will be negative surprises for the market.
全文閱讀請按 2448 晶電 研究報告 – 高盛
06/23 2009 新增
Taiwan LED Sector - Morgan Stanley Research
LED Monthly Tracker: June Update and Opto Taiwan 2009 Takeaways
Quick Comment: Share price downside outweighs upside. Most LED supply chains are cautiously positive
on the outlook in 2H with multiple applications in sight, but end demand strength remains unclear. Given that share price is highly correlated to monthly revenue trend, we expect greater profit-taking pressure owing to muted June, plus increasing fund-raising plans in 2H are an overhang (e.g., Epistar). Expectations that there could be a price hike for high-brightness LEDs, although unlikely, may trigger selling along with intensifying competition from new entrants, i.e., panel giants and TSMC. We remain Cautious on TW LED.
全文閱讀請按 LED產業研究報告-MS
