Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 30 years of experience in the Korean/Asian equity research. Major sectors coverage include the following:
- Technology 
- Consumer 
- Special Situations/Deep Value Plays
- Tender Offers/M&As
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

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Equity Bottom-Up

Founded in 1994, <a href="https://www.smartkarma.com/entities/elan-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:19789:1" rel="noopener">Elan Microelectronics (2458 TT)</a> ("ELAN" or "company") is a leading global supplier of touchpad controllers and fingerprint sensors in Taiwan. ELAN's touchscreen controllers and touchpad module solutions are mainly used in notebook PCs, smartphones, tablets and wearable devices.
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Elan Microelectronics is undervalued especially in terms of the low valuation multiples relative to the financial metrics comparison to its peers, including sales growth, operating margins, and ROE. Elan has higher sales growth, ROE, and operating margins than its peers. However, its valuation multiples are much lower than its comps. 
For example, Elan Microelectronics is trading at P/E of 9.1x in 2021, which is 82% discount to the comps' average ratio of 50.5x. Elan is also trading at EV/EBITDA of 6.4x in 2021, which is 78% discount to the comps' EV/EBITDA ratio of 29.7x. The recent share price dip also provides an attractive opportunity to buy Elan's shares at cheaper levels. 
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Key catalysts of the company are as follows:
<ul>
<li>Share buyback</li>
<li>Higher than expected global sales for notebooks</li>
<li>Beneficiary of growth of consumer IoT related products</li>
</ul>

Founded in 1994, Elan Microelectronics (2458 TT) ("ELAN" or "company") is a leading global supplier of touchpad controllers and fingerprint sensors in Taiwan. ELAN's touchscreen controllers and touchpad module solutions are mainly used in notebook PCs, smartphones, tablets and wearable devices.

Elan Microelectronics is undervalued especially in terms of the low valuation multiples relative to the financial metrics comparison to its peers, including sales growth, operating margins, and ROE. Elan has higher sales growth, ROE, and operating margins than its peers. However, its valuation multiples are much lower than its comps. 
For example, Elan Microelectronics is trading at P/E of 9.1x in 2021, which is 82% discount to the comps' average ratio of 50.5x. Elan is also trading at EV/EBITDA of 6.4x in 2021, which is 78% discount to the comps' EV/EBITDA ratio of 29.7x. The recent share price dip also provides an attractive opportunity to buy Elan's shares at cheaper levels. 

Key catalysts of the company are as follows:

Share buyback
Higher than expected global sales for notebooks
Beneficiary of growth of consumer IoT related products


Elan Microelectronics - An IT Gem in Taiwan