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Himax Technologies, Inc. (HIMX) Message Board

  • mtugrad mtugrad Oct 4, 2013 11:29 PM Flag

    B of A new target $13

    Raising EPS by 11%/22%, PO to US$13 (18% upside potential)
    We raise our 2014/15E EPS by 11%/22% to US$0.67/US$0.88 while our PO goes
    from $8.46 to $13.00. We have increased our target P/E (NTM) from 15.8x to
    19.5x which is Himax’s peak-cycle multiple. Our recent NDR/discussions with
    mgmt increase our confidence in HIMX’s growth and margin prospects in LCOS
    (wearable electronics), touch panel ICs, and wafer level optics (array cameras).
    DDI appears on-track for modest recovery, while…
    We expect 3Q13 to meet the upper end of guidance (down 5-12 % QoQ) – driven
    by mobile, touch IC and mobile booster. DDI revenue should fall 10% QoQ but
    should recover 5% in 3Q13. Small/medium (S/M) DDI is likely to decline 7% QoQ
    while large DDI could drop 15% QoQ due to market share loss (to Novatek).
    4Q13 sales should recover 5% QoQ due to mobile upside from China’s strong
    smartphones/tablet demand and Samsung (catch-up orders after shortages).
    New business trends are encouraging
    We still don’t anticipate upside to LCOS until 2Q14 but our checks indicate that:
    (1) development is broadening to more customers and segments and that;
    (2) head-gear designs are improving (less bulky). We still are unable to detect any
    viable competitors while new-entrants may need 1-2 years to match Himax’s
    capabilities in: (1) technology; and (2) manufacturing cost. We also see Himax
    taking share in the touch IC market at the expense of Cypress and others. Its
    high-end solution is being scaled for lower-end, whitebox phones. We also think
    its WLO sales should accelerate in 2014 driven by cost-down and thinner devices.

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