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Asia Pacific Equity Research
27 September 2012
Windows 8 - Part 3
The rising threat from Samsung
In the final, Part 3 of our series on Windows 8, we look at the chances of Samsung expanding in the PC/ Tablet space and its impact on PC supply chain vendors. As expected, consumer PC brands would be most vulnerable, while ODMs may be relatively better off as some are already securing ODM business from Samsung. Stage is set for Samsung with PC/Tablet convergence and ARM support for Windows: With Windows being available on ARM platform and MSFT enabling the same OS across PC and Tablet, we believe that Samsung would be more aggressive in the Windows 8 space, especially with tablets. Samsung can control 54% of the bill of materials of a Win 8 tablet, as compared to only 22% of Win 8 based notebook PCs. A key watershed event would be MSFT enabling Samsung’s own Application Processor for Windows 8 (we expect this in 2H13). Fervent activity in the supply chain suggests big moves afoot: Samsung has been hiring several key people in the PC space in last 12 months (HPQ PSG marketing VP, head of Asus China notebook biz etc) and has also been engaging with Taiwan ODMs much more aggressively. Windows 8 and Ultrabook product launch also appears to be more aggressive than in past product cycles. Apple’s diversification may make entry into Win 8 market a compulsion rather than choice for Samsung: Apple is clearly diversifying away from Samsung-made components, which would also include application processors. If Apple diversification causes utilization shortfall for Samsung, then the move into Windows 8 Tablets/ PCs would become a compulsion (to fill utilization at component facilities) rather than a choice, for Samsung. Enterprise/China relatively better off, Europe consumer the battleground for market share: Samsung has little presence in enterprise, while entering open market in China (tablets not sold through operator channel) is more difficult. However, we expect every aggressive push into consumer market, especially in Europe, where there are no strong incumbent players. Asustek/Acer likely worse affected, Lenovo and ODMs better positioned: If Samsung were to aggressively compete on Win 8 devices, we expect Acer and Asus to be hurt the most, given their consumer exposure in developed markets. Lenovo is likely to be better off due to high exposure to enterprise and China. Taiwan ODMs are starting to see some ODM business from Samsung (especially Compal) so could be relatively insulated from this move.
Table 1: Samsung's control over Bill of Materials (BOM) - Notebook vs. Tablet
Key components that can be internalized Notebook (x86 based) Display Battery Pack DRAM 88.5 22% Tablet (ARM based Win 8) Display + Touch CPU (application processor) Battery Pack NAND Flash + Mobile DRAM 191 54%
Computer Hardware Gokul Hariharan
(852) 2800-8564 firstname.lastname@example.org J.P. Morgan Securities (Asia Pacific) Limited
(852) 2800-8533 email@example.com J.P. Morgan Securities (Asia Pacific) Limited
(822) 758-5717 firstname.lastname@example.org J.P. Morgan Securities (Far East) Ltd, Seoul Branch
(886-2) 2725-9874 email@example.com J.P. Morgan Securities (Asia Pacific) Limited
(91-22) 6157-3284 firstname.lastname@example.org J.P. Morgan India Private Limited
Total BOM accounted for through vertical integration (US$) % of total BOM of device
Source: Company reports and J.P. Morgan estimates
See page 7 for analyst certification and important disclosures, including non-US analyst disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. www.morganmarkets.com
it has also stepped up the engagement levels with Taiwan ODMs. which could mark the tipping point for Samsung to be more aggressive on tablets. Asus head of China notebook business etc). In addition. the first time that Samsung has participated in a meaningful manner at Computex. the need to qualify an additional vendor like Samsung would increase. with an OS and ecosystem that works seamlessly across tablets and PCs. In addition. we believe that PC/ Tablet convergence is finally happening. the first such engagement in several years. Samsung has not seen much success in the Android Tablet market (even though it is currently the biggest vendor in this market). compared to a mainstream notebook. Until now. 2 . Compal should ship ~2M notebooks to Samsung in 2H12. Hence. several vendors in the supply chain indicate that Samsung is gearing up for a meaningful push into Windows 8 Tablets and PCs. In the first wave of Windows RT. especially Compal. Strong activity in the supply chain suggests big moves afoot Samsung has been hiring experienced PC executives aggressively in past 12 months (high profile hires include former head of HP Consumer Notebook marketing. Samsung will control a much bigger portion of the Bill of Materials for a Windows 8 Tablet. Currently Samsung is using Qualcomm as the application processor for its Windows RT email@example.com Asia Pacific Equity Research 27 September 2012 Stage set for Samsung to make a splash in Windows 8 space PC/ Tablet convergence With Microsoft enabling ARM on Windows and making a meaningful push into the Tablet space with Window 8. Microsoft has only qualified Qualcomm. Samsung can follow the same strategy as in Smartphones (where it makes most of the key components) to gain share in Tablets / hybrids. Qualification of Samsung's own application processors for Windows 8 would be a key watershed event We believe that Samsung would become more aggressive on Windows 8 once Microsoft qualifies Samsung’s own application processor (based on ARM) for Windows 8. but Microsoft should bring a second chance to break into the PC/ Tablet converged market.This document is being provided for the exclusive use of BRUNO LE BARBER at VORTEX CAPITAL LIMITED Gokul Hariharan (852) 2800-8564 gokul. Samsung also dedicated a lot of resources during Computex 2012 to showcase its Windows 8 based ultrabooks and tablets. More control over Bill of Materials with the move to ARM and Tablets With the move to ARM based processors (which Samsung can manufacture inhouse) and Tablet form factor. We believe that Samsung could be qualified as a chip partner for Windows RT in 2H13. NVIDIA and TI as chip partners. But now that TI has announced that they would slowly move OMAP processors away from the Smartphone and tablet market.
0 10.0 4.5 22% ARM-based Windows Tablet Component CPU Display (10" IPS) Touch Module Audio Codec/Amplifier Power management IC NAND Flash (32 G) Mobile DRAM (1GB) Camera (Dual) Casings HDI PCB Passives Connectors Adaptor WIFI + Bluetooth other electronics Battery Accelerometer Other IC Cost (US$) End 2012 25 61.0 74.0 10.0 15.0 2.0 50.0 5.0 7.hariharan@jpmorgan. Morgan estimates.com Asia Pacific Equity Research 27 September 2012 Table 1: Percentage of Bill of materials accounted for by Samsung in Win 8 Tablet and Notebook Mainstream NB PC Component CPU Motherboard Level Chipset + graphics unit PMIC PCB Connectors ( incl CPU socket) Thermal Components Passive components Other IC Others DRAM (average 4G per box) DVD-ROM Combo/RW Hard disk drive (250GB) Keyboard / pointing device Battery Pack Power adapter Casing Hinge (set) Camera WLAN Module Others Operating System LCD Panel (mainstream: 15.0 8.0 5.5 7.0 15.0 50.5 4.0 1. Morgan estimates.0 39.0 410.0 3.0 8.0 4.5 15.6'') Total Component level Costs % of BOM accounted by Samsung Source: Company reports and J.0 20.0 8.0 5.5 35.P.0 1.0 17.0 NO NO NO NO YES NO NO NO NO NO YES NO NO NO YES YES NO NO YES NO NO NO YES 7 7 18 15 7 3 39 88.0 3.5 4.0 20.0 Done in-house by Samsung YES YES YES NO NO YES YEs YEs NO YES NO NO YES NO NO YES NO NO 25 61 35 20 10 8 8 4 20 191 54% Operating System Keyboard dock Total component costs 75 25 356 NO NO Figure 2: Percentage of Bill of materials controlled by Samsung and their breakdown 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Display Notebook (x86 based) DRAM Battery Pack PCB Power adaptor Camera ARM based Win 8 tablet NAND Flash CPU Touch Source: Company reports and J.0 10.This document is being provided for the exclusive use of BRUNO LE BARBER at VORTEX CAPITAL LIMITED Gokul Hariharan (852) 2800-8564 gokul. 3 .0 10.0 10.5 20.0 7.0 10.0 20.P. Done in-house by Samsung Cost (US$) end 2012 80.0 35.
Component dependence on PC supply chain is much lower now. in addition to batteries. Samsung is able to move into the Windows 8 ecosystem and challenge PC brands without expecting any severe backlash in the form of termination of supply contracts. However in Europe. Europe likely to be market share battleground Consumer PC brands get hurt the most Samsung has the most brand awareness and channel presence in the consumer space. Apple appears to be moving towards TSMC and Intel as supplementary sources to Samsung. TVs and tablets. In total. 40% of DRAM production from Samsung's component divisions. At the same time. 45% of Application processors. For application processors also. As a result of this change. many PC vendors (especially Acer and Lenovo) have already made a move to diversify away from Samsung actively in the last few years. especially in developed markets.com Asia Pacific Equity Research 27 September 2012 Apple diversification could force Samsung’s hand with Windows 8 Apple is clearly moving away from Samsung made components in its new products like iPhone 5 and we expect this strategy to continue. Samsung appeared to be hesitant to move into the PC market due to reliance on PC vendors like HPQ and Dell for component sales – especially DRAM and TFT panels. since the PC distribution system is largely segregated from the consumer electronics distribution system. Impact: Consumer PC brands hurt the most. there are no strong 4 . Enterprise and China relatively insulated. Samsung already has strong brand presence in other products in Europe. In 2012.This document is being provided for the exclusive use of BRUNO LE BARBER at VORTEX CAPITAL LIMITED Gokul Hariharan (852) 2800-8564 gokul. In addition. then the move to enter the Windows 8 Tablet / PC space may become a compulsion (to improve its utilization in own Fabs) rather than a choice. while the distribution channels are also merging (IT and consumer electronics channels) in various Western European countries. the biggest customer for its components is already Samsung brand products – both in Smartphones. Europe likely market share battleground Samsung has not had much success in the enterprise space. Hence we expect consumer PC vendors to be affected the most due to the rise of Samsung in Windows ecosystem. we estimate that Samsung brand products consume 70% of AMOLED panels.hariharan@jpmorgan. In addition. we believe that almost 50% of Samsung’s component output is consumed by Samsung brand business. If Samsung faces a shortfall in utilization for its own Fabs due to aggressive diversification from Apple. especially for open-channel markets. China also may not be easy for Samsung to penetrate. But now. so that market is likely to be well insulated. we see the risk of high competition from Samsung as most severe. 50% of NAND Flash. In the past.
However in the last 6 months.0 1.0 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Samsung NB market share Figure 4: Samsung NB market share .0 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Samsung NB market share Figure 6: Samsung NB market share .0 7.0 14.0 2.0 12.0 5. Samsung has been using its own plants to manufacture products like notebooks and tablets.This document is being provided for the exclusive use of BRUNO LE BARBER at VORTEX CAPITAL LIMITED Gokul Hariharan (852) 2800-8564 gokul.0 7.0 8. while for tablets.0 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Samsung NB market share Source: Gartner Source: Gartner Figure 5: Samsung NB market share . We believe that Samsung may continue to use outsourcing for Intel-based products.0 4.W Europe 9.0 3.0 6.0 4.0 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Samsung NB market share Source: Gartner Source: Gartner Taiwan ODMs slightly better placed as Samsung seems a bit more open to outsourcing.0 6.com Asia Pacific Equity Research 27 September 2012 incumbent brands with local presence (Acer and Asus are the strongest consumer brands in Europe).0 12.0 4.Latin America 16. in-house manufacturing is likely to be the norm.0 8. In Europe and Latin America.0 2.0 2.0 1.0 firstname.lastname@example.org 10.East Europe and Middle East 14. 5 . at least for Intel based products Historically. it has been more open to outsourcing to vendors like Compal in the notebook space.0 10.0 6.0 2. Samsung has already gained significant market share even without Windows 8 in the last few quarters as shown in Figures 1-4 Figure 3: Samsung NB market share .0 6.0 5.GLOBAL 8.0 4.0 8.
2 2.1% 22.606 email@example.com 7.25 141 26.2 13.600 3.1 17.com Asia Pacific Equity Research 27 September 2012 Table 3: Valuation Comparison Rating Hon Hai Quanta Lenovo Samsung LGD Ju Teng Wistron Delta Pegatron Asustek Acer Catcher Compal Wintek OW OW OW OW OW OW N N N N UW UW UW UW Price (LC) 9/27/2012 90.7 3.6% 31.3 2.9 0.5% 26.6 6.4 1.5 14.2 9.49 1338000 27800 3.5 12.0% -123. Morgan estimates.0 10.9% -15.7 8.P.9% NA NA P/E (x) 2012E 2013E 12.9 1.2 21.4 12.5% 21.9 1.1% NA 24.1 8.9 0.0 6.0 0.6 20.7 0.5% 113.7 1.5 11.1 15.302 9.3 18.8 -1.6% 67.3 319.85 111 37.5% 4.919 780 Target Price 110 90 8.0 6.1 1.9 16.1 10.9 2.6 1.0 3.2 22.188 2.4% 35.3 11.6 11.5 9.9 7.0 6.8 1.102 2.6% 6.4% 25.5 6.5 25.5 1.7% 19.1 1800000 36.7 10.0 0.5 1.7% -12.9% 41.1 49.8 15.608 9.0 3.6 -2.7 8.8 0.4% NA 418.0 1.8 10.8% 206.8 20.0 1.This document is being provided for the exclusive use of BRUNO LE BARBER at VORTEX CAPITAL LIMITED Gokul Hariharan (852) 2800-8564 gokul.8 31.0% 18.6 1.2 76.2 16.0 NA NA ROE (%) 2012E 2013E 12.10 34.9% 25.4 8.8 12.599 3.3 2.7 13.506 8.0 2.9% -23.4 4.9 10.7 17.7% 22.8 39.65 Mkt Cap US$ mn 36.0 7.950 8.000 5.1 1.8 0.2 11.8% 10.8 10.0 1.5 28.8 10.7 14.4 15.990 430 2.0 33 100 37 300 20 120 24 12 EPS Growth 2012E 2013E 5.8 Source: Company reports and J.865 8.5 P/B (x) 2012E 2013E 1. 6 .2 15.
P. Securities-Related: J.19 64.00 40.TW/NT$26.00 83. Inc.55 76. and (2) no part of any of the research analyst's compensation was. Inc.55 52..45 N N UW N N OW OW OW N OW OW OW OW OW OW N N UW N N Price Target (NT$) 67.30 33.00 92.09 57.00 56.P. Compal Electronics. the following company(ies) as clients. Inc.00 36. the following company(ies) as clients. and are subject to change without notice. or had within the past 12 months. Acer Inc (2353. are available for compendium reports and all J.P.00 95.85 42.90 72.. Lenovo Group Limited.49/Overweight) Analyst Certification: The research analyst(s) denoted by an “AC” on the cover of this report certifies (or. Lenovo Group Limited.00 105.com with your request. compensation for investment banking services in the next three months from Acer Inc. Morgan currently has. Inc.78 42. 7 .00 110. Important Disclosures Client: J.00 78. Morgan currently has.P.18 52. calling 1-800-477-0406.TW/NT$28. Morgan has received compensation in the past 12 months for products or services other than investment banking from Acer Inc.TW/NT$319..jpmorgan. Client/Non-Securities-Related: J. and have not been reviewed by Gartner.00 95.P. the research analyst denoted by an “AC” on the cover or within the document individually certifies. or emailing research. Morgan– covered companies by visiting https://mm. Morgan currently has. The opinions expressed in Gartner publications are not representations of fact. and the services provided were non-securities-related: Compal Electronics.00 50.48 68. Inc.80 52.25/Underweight). and the services provided were non-investment-banking. 2353 TT) Price Chart 174 Rating Share Price (NT$) 60. Morgan's interpretation of data opinion or viewpoints published as part of a syndicated subscription service by Gartner.00 40. or intends to seek.00 63. with respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views expressed in this report accurately reflect his or her personal views about any and all of the subject securities or issuers.P.00 48.50/Neutral). Morgan expects to receive.57 44.90 76.00 55.hariharan@jpmorgan. Date Acer Inc (2353.50 44.P.00 79. or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report.00 48. ASUSTek Computer. Morgan.disclosure.com/disclosures/company. Client/Non-Investment Banking. where multiple research analysts are primarily responsible for this report.10/Underweight).com Asia Pacific Equity Research 27 September 2012 Companies Recommended in This Report (all prices in this report as of market close on 27 September 2012) ASUSTek Computer (2357.50 88. the following company(ies) as clients: Acer Inc. is. securities-related: Acer Inc. including price charts..52 41. Compal Electronics. Lenovo Group Limited (0992.00 52.00 72. or had within the past 12 months. Lenovo Group Limited. (2324.00 16-May-07 N 28-Oct-07 21-Mar-08 20-Apr-08 17-Jul-08 28-Oct-08 02-Nov-08 28-Nov-08 06-Feb-09 01-Mar-09 02-Apr-09 20-Aug-09 03-Sep-09 05-Mar-10 03-Oct-10 N NT$56 NT$50 OW OW NT$63 UW NT$40 N NT$33 145 UW NT$52 NT$55 OW NT$92 OW N NT$48 OW NT$105 N NT$64 N NT$36NT$20 UW N NT$40 NT$28 N 116 Price(NT$) N NT$67 NT$70 NT$55 N NT$43 N N OW NT$48 NT$83 NT$110 NT$95 OW OW OW N NT$72 87 58 29 0 Oct 06 Jul 07 Apr 08 Jan 09 Oct 09 Jul 10 Apr 11 Jan 12 Oct 12 17-Feb-11 01-Nov-10 27-Mar-11 20-Apr-11 16-Feb-12 27-Apr-12 Source: Bloomberg and J. Initiated coverage May 16. 2007.62 39.HK/HK$6. Compal Electronics.P. Each Gartner publication speaks as of its original publication date (and not as of the date of this report). Compal Electronics.00 64.TW.00 55. Inc. Company-Specific Disclosures: Important disclosures. Non-Investment Banking Compensation: J. price data adjusted for stock splits and dividends. Investment Banking (next 3 months): J.00 70. or had within the past 12 months.This document is being provided for the exclusive use of BRUNO LE BARBER at VORTEX CAPITAL LIMITED Gokul Hariharan (852) 2800-8564 gokul.. Gartner: All statements in this report attributable to Gartner represent J.00 43.inquiries@jpmorgan.
2357 TT) Price Chart N N UW 31.00 28.05 39. Morgan.08 466.20 28.50 35.60 219.02 139.71 349.00 36.35 211.00 250.91 37.81 344.50 265. 2006.P.00 264.29 304. price data adjusted for stock splits and dividends.16 NT$227 N N NT$300 484 Price(NT$) 363 242 121 0 Jul 07 Apr 08 Jan 09 Oct 09 Jul 10 01-Dec-10 N 02-May-11 N Apr 11 Jan 12 Oct 12 29-Aug-11 Source: Bloomberg and J.00 28.29 18.50 263. price data adjusted for stock splits and dividends.24 176.98 284.70 27.08 U OW NT$354.30 Price Target (NT$) 21. 8 .00 14.00 300.00 Price Target (NT$) 354.00 350.00 40.23 22.31 15. Initiated coverage Oct 23.08 410.16 410. (2324.36 210.45 26.50 238.00 firstname.lastname@example.org 32.45 26.50 201.00 23-Oct-06 23-Jul-07 30-Nov-07 20-Jun-08 13-Oct-08 11-Jan-09 08-Dec-08 N 25-Sep-09 05-Oct-09 12-Oct-09 09-Sep-10 27-Mar-11 Oct 06 Jul 07 Apr 08 Jan 09 Oct 09 Jul 10 Apr 11 Jan 12 Oct 12 01-Apr-12 30 15 0 01-Nov-11 22-Jun-12 Source: Bloomberg and J.00 29-Jan-08 29-Jun-08 28-Oct-08 28-Nov-08 09-Jan-09 07-Jul-09 16-Aug-09 30-Oct-09 08-Jan-10 12-Apr-10 24-Jun-10 15-Aug-10 14-Feb-11 02-Aug-11 01-Nov-11 30-Nov-11 27-Feb-12 07-Jun-12 23-Aug-12 726 UW NT$410.00 244.88 32.00 210.08 605 UW NT$139.65 240. 2007. 2324 TT) Price Chart Date UW NT$14 UW NT$31 75 N NT$16 60 UW NT$21 N NT$33 N NT$35 OW NT$40 OW NT$36 Price(NT$) 45 UW NT$27 UW NT$32 NT$28 UW UW NT$23 NT$25 UW UW NT$32 UW NT$24 Rating Share Price (NT$) UW N N OW OW UW UW UW UW UW UW UW UW UW 28.20 276.00 290.00 Rating Share Price (NT$) UW UW N OW OW OW UW UW N OW OW OW OW N N N N N N N OW N 376.83 36. 01-May-12 OW Compal Electronics.TW.00 291.6 W NT$177.73 412.00 25.16 OW NT$466 N NT$410.00 16.00 279.97 37. Morgan.00 20.00 32.00 23.50 276.00 227.00 210.00 24.00 220.00 235.00 244.com Asia Pacific Equity Research 27 September 2012 07-Jun-12 15-Aug-12 19-Aug-12 Date 02-Jul-07 04-Sep-07 ASUSTek Computer (2357.8 OW NT$326.20 354.00 27.40 246.2 OW NT$276 OW NT$219.00 35.00 33.08 246.02N NT$246.00 251.This document is being provided for the exclusive use of BRUNO LE BARBER at VORTEX CAPITAL LIMITED Gokul Hariharan (852) 2800-8564 gokul.10 40.80 33.16 326.P. Inc.00 365.80 33.98 326.50 247.80 177.08 OW NT$279.00 295. Initiated coverage Jul 02.00 260.00 32.34 265.98 W NT$326.00 31.52 155.TW.2 O N NT$251N NT$220 NT$365 OW N NT$244N NT$260N NT$235 NT$300 N N NT$250 N NT$210 W NT$350 O UW NT$354.
2 HK$6.1 N UW HK$1.8 OW HK$5.00 6.P.] Underweight [Over the next six to twelve months.2N HK$7 N N HK$1. Gokul: ASUSTek Computer (2357.TW). (2324.61 6. An NR designation is not a recommendation or a rating.20 3. Morgan uses the following rating system: Overweight [Over the next six to twelve months. the price target. In our Asia (ex-Australia) and U.45 1. we expect this stock will outperform the average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe. If it does not appear in the Important Disclosures section of this report.20 9.40 4. Quanta Computer Inc.20 6.95 UW HK$4. regulatory or policy reasons.75 5.2 N HK$6OW HK$6.P.45UW HK$3.P.P.00 7. Morgan’s research website.45 3.4 HK$9 N N HK$2. Morgan.00 5.K.1 OW OW OW 10-Nov-08 28-Nov-08 06-Feb-09 09-Aug-09 05-Nov-09 09-Feb-10 6 0 Oct 06 Jul 07 Apr 08 Jan 09 Oct 09 Jul 10 Apr 11 Jan 12 05-May-10 N Oct 12 20-Aug-10 05-Aug-10 Source: Bloomberg and J. for this stock because of either a lack of a sufficient fundamental basis or for legal.50 8. (2308.60 6. Lite-On Technology Corporation (2301.77 5. Coverage Universe: Hariharan. Morgan's continuing coverage of the stocks.60 5. Initiated coverage Oct 24.19 4.92 1. www.This document is being provided for the exclusive use of BRUNO LE BARBER at VORTEX CAPITAL LIMITED Gokul Hariharan (852) 2800-8564 gokul.90 6.35 UW HK$1.6 HK$8. the certifying analyst’s coverage universe can be found on J. (2382.TW).17 3.38 5.9 N OW HK$8. the price target.5 Rating Share Price (HK$) N N N N N N N N N N N UW UW UW UW UW N N OW OW OW OW OW 3.19 3. Pegatron Corp (4938.23 5.] Neutral [Over the next six to twelve months. each stock’s expected total return is compared to the expected total return of a benchmark country market index. 01-Dec-10 OW 21-Mar-11 05-Jul-11 03-Nov-11 10-Feb-12 07-Jun-12 18-May-12 OW The chart(s) show J.50 9. if applicable.53 Price Target (HK$) 3.13 3.TW).5 N HK$6.40 6. not to those analysts’ coverage universe.TW). no longer should be relied upon. Catcher Technology (2474.10 8. The previous rating and.P.morganmarkets.com. if applicable.20 8.TW). Hon Hai Precision (2317.TW). Foxconn Technology (2354.3 HK$5.30 5.00 5. Designations and Analyst(s) Coverage Universe: J. the current analysts may or may not have covered it over the entire period. Inc.10 2.and mid-cap equity research.5N HK$4 HK$9.49 6.00 3. Morgan has removed the rating and. 992 HK) Price Chart 18 N HK$3.TW).19 UW HK$3.95 1.21 4.30 2.88 4. price data adjusted for stock splits and dividends.35 1.18 4.62 3. we expect this stock will underperform the average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.60 7.HK.4 N HK$5.80 6.74 5.64 5.63 5. we expect this stock will perform in line with the average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage email@example.com 5.8 HK$6.] Not Rated (NR): J.HK).54 1. Delta Electronics.50 3.TW). UW = Underweight. 2006.2 HK$4. Lenovo Group Limited (0992.2 N HK$3.5 OW HK$7. Inc.com Asia Pacific Equity Research 27 September 2012 Date 24-Oct-06 12-Nov-06 01-Feb-07 Lenovo Group Limited (0992. small.20 4. Morgan ratings or designations: OW = Overweight.88 4.10 24-May-07 N 27-Jul-07 03-Aug-07 05-Nov-07 10-Jan-08 31-Jan-08 22-Jul-08 28-Oct-08 N HK$3 12 Price(HK$) N HK$5.79 1.50 4.P.TW) 9 .21 4. NR = Not Rated Explanation of Equity Research Ratings.TW). N= Neutral. Compal Electronics. Acer Inc (2353. J.
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