Asia and Global Semiconductor and Tech Research

Andrew Lu

Equity Bottom-Up

<h2>All three miss 1Q18</h2><p>As our earlier report " <a href="https://www.smartkarma.com/insights/mediatek-headwinds-ahead-to-drive-the-likely-consensus-cut-for-2018" target="_blank" data-smartkarma-citation="insights:16962">MediaTek - Headwinds Ahead to Drive the Likely Consensus Cut for 2018</a> " dated 21 Jan 2018 highlighted Bloomberg consensus likely to cut its 1H18 sales, op margin, EPS, and 2018 sales outlook triggered by 1. <a href="https://www.smartkarma.com/entities/11230" target="_blank" data-smartkarma-citation="entities:11230:1">Taiwan Semiconductor Mfg. Co. Ltd. (2330 TT)</a> said no more demand growth from smartphone IC in 2018, 2. news said Oppo and Vivo cut 20-25% y/y components in 1Q18, 3. Gionee Chairman's assets were frozen by the court, all three smartphone IC vendors…</p>

All three miss 1Q18As our earlier report " MediaTek - Headwinds Ahead to Drive the Likely Consensus Cut for 2018 " dated 21 Jan 2018 highlighted Bloomberg consensus likely to cut its 1H18 sales, op margin, EPS, and 2018 sales outlook triggered by 1. Taiwan Semiconductor Mfg. Co. Ltd. (2330 TT) said no more demand growth from smartphone IC in 2018, 2. news said Oppo and Vivo cut 20-25% y/y components in 1Q18, 3. Gionee Chairman's assets were frozen by the court, all three smartphone IC vendors…

All Three Smartphone IC Vendors Miss 1Q18 Expectation; Suggesting to Avoid

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

<p>Today’s report provides a top-down synopsis of the technical condition of emerging markets across the globe, and includes a wide variety of bottom-up recommendations, spanning most sectors and all market capitalizations.</p>

Today’s report provides a top-down synopsis of the technical condition of emerging markets across the globe, and includes a wide variety of bottom-up recommendations, spanning most sectors and all market capitalizations.

Emerging Markets: Technical Strategy & Reccommendations

Himax Technologies Inc Adr / Equity Bottom-Up

<h2>What triggers our idea?</h2><p>Among all of the new features we have highlighted in <a href="https://www.smartkarma.com/entities/666" target="_blank" data-smartkarma-citation="entities:666:1">Apple Inc (AAPL US)</a> new iPhone X (please see "<a href="https://www.smartkarma.com/insights/apple-new-iphones-and-watch-3-all-new-features-are-in-the-price" target="_blank" data-smartkarma-citation="insights:13541">Apple New IPhones and Watch 3: All New Features Are in the Price?</a> " dated 13 September 2017), TrueDepth camera system for Face ID should be the most wanted feature to drive iPhone X outselling iPhone 8/8 plus for easy unlock, increase security, Animoji on live, and rising augmented reality (AR) applications. Although this won't happen soon, we expect 3D face ID to replace…</p>

What triggers our idea?Among all of the new features we have highlighted in Apple Inc (AAPL US) new iPhone X (please see "Apple New IPhones and Watch 3: All New Features Are in the Price? " dated 13 September 2017), TrueDepth camera system for Face ID should be the most wanted feature to drive iPhone X outselling iPhone 8/8 plus for easy unlock, increase security, Animoji on live, and rising augmented reality (AR) applications. Although this won't happen soon, we expect 3D face ID to replace…

Himax - What if 50% of Android Smartphones Need Face ID by 2021?

Equity Capital Markets

Shenzhen Goodix Technology / Equity Capital Markets

<h2><strong>Summary</strong></h2><ul>
<li><em><strong>Valuation risk</strong>: By trading at over 80x of our revised 2016/2017 EPS and over 25x on 2016/2017 book value, Huiding Technology is apprently overvalued over peers'. Also, Huiding's market cap should not be larger than <a href="https://www.smartkarma.com/entities/772" target="_blank" data-smartkarma-citation="entities:772:1">Mediatek</a>'s US$10.8bn as MediaTek has a larger global smartphone IC market share of 35-40%, higher net per smartphone solution, less competitors, more stable pricing, and stronger bargaining power with foundry/OSAT. </em></li>
<li>
<em><strong>Fingerprint sensor pricing risk</strong>: Although we are raising our</em>…</li>
</ul>

Summary
Valuation risk: By trading at over 80x of our revised 2016/2017 EPS and over 25x on 2016/2017 book value, Huiding Technology is apprently overvalued over peers'. Also, Huiding's market cap should not be larger than Mediatek's US$10.8bn as MediaTek has a larger global smartphone IC market share of 35-40%, higher net per smartphone solution, less competitors, more stable pricing, and stronger bargaining power with foundry/OSAT. 

Fingerprint sensor pricing risk: Although we are raising our…


Goodix/Huiding - Time to Highlight the Risks After 7.8x Upside at over 25x Book

<h2>Executive summary</h2><ul>
<li>Xiaomi introduced its flagship smartphone 5S using Qualcomm ultrasonic fingerprint sense ID the first time, and more smartphone vendors are in design-in phase.</li>
<li>Qualcomm Sense ID biometrics technology has advantages of detecting a live finger, dealing contaminants, providing better precision, and having flexibility in design.</li>
<li>Capacitive sensor has some drawbacks like sensitive to electrostatic discharge (shock), valleys have a lower capacitance to measure, and less flexible on…</li>
</ul>

Executive summary
Xiaomi introduced its flagship smartphone 5S using Qualcomm ultrasonic fingerprint sense ID the first time, and more smartphone vendors are in design-in phase.
Qualcomm Sense ID biometrics technology has advantages of detecting a live finger, dealing contaminants, providing better precision, and having flexibility in design.
Capacitive sensor has some drawbacks like sensitive to electrostatic discharge (shock), valleys have a lower capacitance to measure, and less flexible on…


Disruptive Ultrasonic Fingerprint IC from Qualcomm Likely Will Kill Capacitive Sensor

Taiwan

Egis Technology Inc. provides fingerprint biometrics and data encryption solutions. The Company specializes in integrated turnkey solutions with an emphasis on sensor performance and software usability.

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Egis Technology (6462 TT)

All Three Smartphone IC Vendors Miss 1Q18 Expectation; Suggesting to Avoid

All three miss 1Q18As our earlier report " MediaTek - Headwinds Ahead to Drive the Likely Consensus Cut for 2018 " dated 21 Jan 2018 highlighted...

Andrew Lu

Emerging Markets: Technical Strategy & Reccommendations

Today’s report provides a top-down synopsis of the technical condition of emerging markets across the globe, and includes a wide variety of...

Vermilion Research

Himax - What if 50% of Android Smartphones Need Face ID by 2021?

What triggers our idea?Among all of the new features we have highlighted in Apple Inc (AAPL US) new iPhone X (please see "Apple New IPhones and...

Andrew Lu

Goodix/Huiding - Time to Highlight the Risks After 7.8x Upside at over 25x Book

Summary Valuation risk: By trading at over 80x of our revised 2016/2017 EPS and over 25x on 2016/2017 book value, Huiding Technology is apprently...

Andrew Lu

Disruptive Ultrasonic Fingerprint IC from Qualcomm Likely Will Kill Capacitive Sensor

Executive summary Xiaomi introduced its flagship smartphone 5S using Qualcomm ultrasonic fingerprint sense ID the first time, and more smartphone...

Andrew Lu

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