2454聯發科_1090210_MS.pdf

Eclat Textile | Asia Pacific
Solid January Sales To Alleviate
Market Concerns
Considering headwinds, including fewer working days in
Vietnam and Taiwan and unfavorable FX trend, we view Eclat's
January sales solid and the figure should alleviate recent
market concerns on labor shortage. Eclat remains our top pick
within apparel/footwear OEM coverage.

Hon Hai Precision (2317.TW)
Quick take: Production resumption awaits China's approval
Event: Chances reportedly appear slim for tech suppliers to restart operations in February in China,
as suggested by Compal's decision to postpone the operation of its plants in Kunshan City from Feb
7th to 17th, as well as Hon Hai move to ask its employees not to go back for working at its plants
in Shenzhen City at present. Meanwhile, Pegatron, Wistron and Quanta are also not confident in
resuming operations of their plants as scheduled on February 10th.

ASE Industrial Holdings (3711 TT)
Weaker EMS guidance on coronavirus, but
ATM outlook still solid

Key points
 4Q19 results beat on strong demand in the packaging & testing business;
1Q20 guidance missed a bit on coronavirus impact on EMS operations.
 ASEH expects to outgrow peers, with the key driver being 5G development.
Key growth segments are testing, SiP, and Fan-Out.
 We cut our 2020/21E EPS estimates by 3%/2%. Maintain Outperform with a
slightly lower TP of NT$85.

Hon Hai Precision | Asia Pacific
Schedule for Resuming China
Production to Vary by Local
Government Requirement
Hon Hai announced on Feb. 8 that it plans to continue to work with local
governments at each of its production sites in China to ensure employee safety
and health before resuming production after extended CNY holidays. No specific
dates were mentioned in the announcement, unlike the prior announcement
indicating that production would resume on Feb 10 (see here). The company is
not commenting on the resumption status at any specific site.

MediaTek (2454 TT)
Lowering 5G smartphone expectation
Key points
 MediaTek (MTK) guided 1Q20 revenue to be down by 7-15% QoQ, lower
than expected. Reiterate UP with a lower TP of NT$320 and lower EPS.
 MTK cut its 5G smartphone shipment estimates for 2020.
 Growth segment to continue to see good momentum in 2020, mainly driven
by ASIC, auto, WiFi 6, true wireless stereo (TWS), and etc.


MediaTek | Asia Pacific
Long-term 5G story intact amid
the 2019-nCoV impact; OW
The company’s confidence in the 2Q20 launch schedule for 5G
smartphones in China should provide key support for the
stock. We trim estimates but still find valuation attractive.