臺灣電子元器件行業(yè)回顧：庫存降低資本支出更有節(jié)制

1、Equity Research Asia Pacific | TaiwanTaiwan Components Sector9M 2019 review: Lower inventory, more disciplined capexElectronic Components & Connectors | QuarterlyFigure 1: YoY growth driven by lens, cooling, power, connector and handsetResearch Analysts(NT$)45.0040.0035.0030.0025.0020.0015.0010.005.

2、000.009M19 EPS9M18 EPSPauline Chen886 2 2715 6323 HYPERLINK mailto:pauline.chen pauline.chenAngela Pan886 2 27156352 HYPERLINK mailto:angela.pan angela.panSource: Company data, Credit Suisse estimatesWe summarise the key findings from 96 sample downstream components companies 9M 2019 financial repor

3、ts. (1) Ex-passive components saw 9M 2019 revenue growth of 2% YoY, driven by accelerated YoY growth in smartphone chain, including lens, cooling and handset components. (2) Spec upgrade in 5G chain is shown, as ex-passive components increased to account for 121% of EMS 9M 2019 operating profit, abo

4、ve 2008-18 9M average of 88%; lens, PCB, cooling as well as power supply were the main contributors.(3) Inventory days for components further declined to 64 days, down 2 days YoY, with passive currently down to 100 days, closer to pre-price hike level (4Q17 at 99 days). (4) Cost increased to support

5、 new growth drivers, capacity expansion in 2017/18 and spec upgrade, with components D&A and R&D each adding 0.5pp margin impact (YoY). (5) Capex for components declined 11% YoY, but capex grew for lens (spec upgrade/increased demand), hinge (new growth driver), PC components (new spec/new products)

6、, connector (capacity relocation/focus growth area).Stock Calls: The set of data supports our view on: (1) continued lens upgrade, which Largan is still well positioned, given its technology leadership and capacity constraints; (2) earnings recovery in passive components from 4Q19, with power induct

7、or seeing the most severe tightness, followed by R-Chip/MLCC, which should benefit Delta; (3) casing earnings bottoming out as a directional positive to Catcher, with risks from heavier pricing pressure in iPhone despite more complicated design; (4) ASP upgrade opportunity in high- end HDI, BT/ABF s

8、ubstrates and antenna FPC, driven by faster 5G penetration, but AiP expectation (used in mmWave models) for Taiwan suppliers could be too high.DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYS

9、TS. US Disclosure: Credit Suisse 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 couldFocus chartsFigure 2: Revenue comparison (9M 2019)Figure 3: Ex-passive components rising as %

10、of EMS op profit(NT$mn)500,000450,000400,000350,000300,000250,000200,000150,000100,00050,0000Revenue (LHS)Revenue growth (RHS)20%10%0%-10%-20%-30%-40%180%160%140%120%100%80%60%40%20%0%Components as of EMS op Ex-passive componentsSource: Company data, Credit Suisse estimatesSource: Company data, Cred

11、it Suisse estimatesFigure 4: Operating profit comparison (9M 2019)Figure 5: Inventory days(NT$mn) 35,00030,00025,00020,00015,00010,0005,0000Mar-19Mar-18Mar-17Mar-16Mar-15Mar-14Mar-13Mar-12operating profit (LHS)OPM (RHS)50%45%20%15%10%5%0%(days)8040%35%6030%25%50704030Mar-09Mar-0820Mar-11Mar-10Mar-09

12、Mar-08componentEMS Source: Company data, Credit Suisse estimatesSource: Company data, Credit Suisse estimatesFigure 6: EPS comparisonFigure 7: Capex comparison (9M19)(NT$)45.0040.0035.0030.0025.0020.0015.0010.005.000.009M19 EPS9M18 EPS(NT$mn) 50,00045,00040,00035,00030,00025,00020,00015,00010,0005,0

13、000Mar-19Mar-18Mar-10capex (LHS)capex-to-sales (RHS)Mar-17Mar-16Mar-15Mar-14Mar-13Mar-12Mar-1120%18%16%14%12%10%8%6%4%2%0% Source: Company data, Credit Suisse estimatesSource: Company data, Credit Suisse estimates9M 2019 review: Lower inventory, more disciplined capexSub-sector highlightsWe summaris

14、e the key findings from 96 sample downstream components companies 9M 2019 financial reports. (1) Ex-passive components saw 9M 2019 revenue growth of 2% YoY, driven by accelerated YoY growth in smartphone chain, including lens, cooling and handset components. (2) Spec upgrade in 5G chain is shown, as

15、 ex-passive components increased to account for 121% of EMS 9M 2019 operating profit, above 2008-18 9M average of 88%; lens, PCB, cooling as well as power supply were the main contributors. (3) Inventory days for components further declined to 64 days, down 2 days YoY, with passive currently down to

16、 100 days, closer to pre-price hike level (4Q17 at 99 days). (4) Cost increased to support new growth drivers, capacity expansion in 2017/18 and spec upgrade, with components D&A and R&D each adding 0.5pp margin impact (YoY). (5) Capex for components declined 11% YoY, but capex grew for lens (spec u

17、pgrade/increased demand), hinge (new growth driver), PC components (new spec/new products) and connector (capacity relocation/focus growth area).Stock highlightsPower supply: Delta is our top pick in power supply and components space, as we see good OPM recovery (from 2Q20E), driven by improved prod

18、uct mix from passive components strength, industrial automation rebound, and better IT power supply outlook. For Chicony, we will continue to monitor if faster top-line growth can drive more core earnings upsides. For LiteOn, we see limited upside to further OPM expansion, given the mix change. Risk

19、s: Demand uncertainties from the trade war, potential delay in server CPU, forex volatility (NTD appreciation).Handset components: While capacity constraint might limit Largans unit growth, we see healthy ASP growth from solid spec upgrades, including 7P and ToF, contributing to double- digit earnin

20、gs growth in 2020E. We believe Merrys leading ODM position in headset might become less meaningful in booming TWS market when more IT brands are joining the competition. Risks: Slower smartphone sell-through, cost-down pressure to launch 5G smartphone dampening spec upgrade and rising trade tensions

21、.Casings: We like Catcher in the pack, as we expect earnings recovery in 2020, driven by a bigger Al alloy TAM and ASP upgrade in 5G smartphone models (casing report). We believe casing market share for Hon Hai group (FII+FTC) will be flattish YoY in 2H20E iPhone models, and FII is expected to captu

22、re most of the value accretion from 5G smartphone casing (compared to FTC), given different manufacturing process. We think that the likelihood for Casetek to penetrate into new iPhones is low, but we expect Casetek to become the third source of Apple watch. Risks: Apples product demand, pricing pre

23、ssure from customer and peers, and rising trade tensions.PCB (printed circuit board): We are still positive on PCBs 5G cycle (smartphone and infrastructure), with tightness seen in high-end HDI and continued profitability enhancement from ABF strength. We have an OUTPERFORM rating on Unimicron, as w

24、e expect it to capture high growth with its extended exposure spanning ABF, BT substrate and high-end HDI. We are also OUTPERFORM on NYCPB, as we expect decent earnings boost from 5G infrastructure build out. We see good potential for Kinsus in BT substrate upgrade, but market expectations on AiP co

25、uld be too high. Risks: Rising trade tensions, slower 5G deployment, slower recovery of GPU/CPU or server and weaker smartphone sell-through.Connectors: We believe Bizlinks fund raising plans should expand its growth opportunities in EV and high speed market. We think that near-term sales volatility

26、 is not altering Sinbons long- term growth story. Risks: Rising trade tensions and key customers outlook (Tesla for BizLink; Geely for Hu Lane).Sector valuation matrixFigure 8: Stocks EPS outlook and valuationCompanyTickerCS rating2019P/E (x)20202019P/B (x)20202019ROE (%)2020Delta2308 TTO21.217.03.0

27、3.014%18%LOT2301 TTN14.912.91.71.811%14%Chicony2385 TTN18.210.82.72.615%24%Catcher2474 TTO6.715.51.21.318%8%FTC2354 TTN10.711.21.00.99%8%Casetek5264 TTNn.a.n.a.0.60.6-5%-2%Largan3008 TTO26.622.46.05.523%24%Merry2439 TTN15.514.13.23.320%23%TXC3042 TTN22.922.91.71.77%7%BizLink3665 TTO17.915.72.83.215%

28、20%Sinbon3023 TTO19.616.34.24.322%26%Hu Lane6279 TTN12.716.51.71.814%11%Chin Poon2355 TTN74.719.10.80.81%4%Kinsus3189 TTN69.5n.a.0.91.01%-8%Unimicron3037 TTO40.120.71.61.54%7%Tripod3044 TTN13.412.32.01.915%15%NYPCB8046 TTOn.a.84.11.11.1-2%1%Topoint8021 TTN13.015.20.80.76%5%CompanyTickerCS ratingPric

29、e LocalTarget Local2019EPS (NT$)2020EPS Growth (%) 20192020Delta2308 TTO148.5163.07.008.76-1%25%LOT2301 TTN50.552.03.383.91203%16%Chicony2385 TTN89.393.04.928.23-11%67%Catcher2474 TTO242.0295.036.3115.6628%-57%FTC2354 TTN69.270.06.476.20-8%-4%Casetek5264 TTN45.653.0-4.05-1.41n.an.aLargan3008 TTO4835

30、.05450.0181.67215.75-6%19%Merry2439 TTN160.0170.010.3411.37-43%10%TXC3042 TTN47.641.02.082.08-33%0%BizLink3665 TTO210.5245.011.7513.3817%14%Sinbon3023 TTO122.5149.06.267.5315%20%Hu Lane6279 TTN76.480.06.004.63-40%-23%Chin Poon2355 TTN30.736.00.411.60-89%290%Kinsus3189 TTN53.949.00.78-4.54-30%n.aUnim

31、icron3037 TTO45.446.01.132.19318%93%Tripod3044 TTN126.0113.09.4010.2613%9%NYPCB8046 TTO49.246.0-0.900.58n.an.aTopoint8021 TTN23.022.01.771.5119%-14%Source: Company data, Credit Suisse estimatesKey findings in 9M 2019 financial reportsWe summarise the key findings from 96 sample downstream components

32、 companies 9M 2019 financial reports.Revenue growthRevenue for the components sector YoY decline was -1% YoY in 9M19, as casing (-17% YoY) and passive (-40% YoY) continued to be in the deep water, hurt by pricing pressure from competition (former) and inventory adjustment (latter), offsetting accele

33、rating growth in smartphone-related chains, including lens, handset, cooling and PCB. Ex-passive components saw a 2% YoY growth, with growth led by cooling and lens. Within 11 sub-sectors, cooling saw the strongest YoY growth (+17% YoY), driven by growing incremental demand from communication and sm

34、artphone, and was followed by lens (+15%) and handset components (+11%), driven by ASP strength from spec upgrade and share gains. Double-digit YoY sales growth was also seen in hinge (+11% YoY) and PC components (+14%). iPhone supply chains YoY decline narrowed to 3% YoY in 9M19 (from -9% YoY decli

35、ne in 6M19), with better-than-expected new smartphone launch.Ex-passive components saw a 2% YoY growth, with growth led by smartphone chain, including cooling and lens.Figure 9: 9M 2019 revenue comparisonFigure 10: 9M 2019 revenue-mix by sector(NT$mn)500,000450,000400,000350,000300,000250,000200,000

36、150,000100,00050,000Revenue (LHS)Revenue growth (RHS)20%10%0%-10%-20%-30%Cooling, 4%Passives, 4%HS ex lens, 7%PCB, 28%Pow er, 27%Battery, 4%Hinge, 1%0-40%Lens, 3%Casing, 12%PC com, 5%Connector, 5%Source: Company data, Credit Suisse estimatesSource: Company data, Credit Suisse estimatesOperating prof

37、it growth and operating margin (OPM)Operating profits for the components sector also saw accelerating YoY decline of -18% in 9M 2019, off a 1% YoY revenue decline. But ex-passive, components sector actually saw a 7% YoY growth off 2% YoY sales growth in 9M 2019. PCBs operating income grew 15% YoY an

38、d became the largest contributor to the components operating income (23% of components operating income), replacing power supply (20% of components op income). Lens accounted for 19% of components operating income, and handset increased to 4% with Foxlinks turnaround and Merrys strengthening op prof

39、it.Sub-sector wise, power supply, battery, connector, lens, handset, cooling and PCB delivered double-digit operating profit YoY growth, up 23%/12%/25%/20%/80%/89%/15% YoY, respectively. Casings operating income YoY decline narrowed to 46% in 9M 2019, while passive saw widening YoY decline to 74%.OP

40、M for the components sector saw a widening YoY contraction of 180 bp YoY to 8.6% in 9M 2019, but ex-passive, components saw 40 bp YoY expansion to 8.1%. Lens still had the highest OPM of 47.6%, and PC components still had the lowest OPM of 3.7% in 9M 2019. On a YoY basis, cooling enjoyed the biggest

41、 OPM improvement (up 258 bp YoY), with Auras seeing the biggest expansion, followed by TaiSol, Jentech, Forcecon and CCI. However, passive components OPM enlarged its contraction to down 28.1 pp YoY, with its 9M19 OPM (at 21.1%) moving closer to its 2008-18 average of 19.9%.Ex-passive, components OP

42、M saw 40 bp YoY expansion to 8.1%, with cooling enjoying biggest improvement.Figure 11: 9M 2019 operating profit comparisonFigure 12: 9M 2019 operating profit-mix by sector(NT$mn) 35,00030,00025,00020,00015,00010,000operating profit (LHS)OPM (RHS)50%45%40%35%30%25%20%15%10%Cooling, 3%PCB, 23%Passive

43、s, 10%Pow er, 20%Battery, 3%Hinge, 2%PC com, 2%Connector, 6%5,0000 5%HS ex lens, 4%0%Casing, 10%Lens, 19%Source: Company data, Credit Suisse estimatesSource: Company data, Credit Suisse estimatesEBITDA marginEBITDA margin for the components sector arrived at 14.2% in 9M19, 128 bp YoY lower, with pas

44、sive components (-2,562 bp YoY) and casing (-202 bp YoY) as the main contributors, offsetting 1 pp YoY expansion seen in handset components, lens, cooling, PCB, hinge, connector and power supply. Lens still enjoyed the highest EBITDA margin at 55.7%, and battery pack still had the lowest EBITDA marg

45、in at 6.7%. Cooling saw the biggest EBITDA margin improvement of 297 bp YoY (replacing Ex-handset components), and PCBs continued margin expansion in 9M19 marked the fifth quarter of expansion, both sectors benefited from 5G migration (smartphone and infrastructure).Figure 13: 9M 2019 EBITDA margin

46、comparisonFigure 14: 9M 2019 EBITDA by sector(NT$mn)70,00060,00050,00040,00030,00020,00010,000EBITDA (LHS)EBITDA margin (RHS)60%50%40%30%20%10%Cooling, 3%PCB, 28%Passives, 8%Pow er, 19%Battery, 2%Hinge, 2%PC com, 2%Connector, 5%00% HS ex lens, 5%Casing, 13%Lens, 13%Source: Company data, Credit Suiss

47、e estimatesSource: Company data, Credit Suisse estimatesLabour costsIn 9M 2019, labour costs for the components sector grew slightly at 1% YoY, and accounted for 17.1% of the components sectors revenue, up from 16.8% in 9M 2018 and still above 2008-18 average of 15.0%. Passive was the main contribut

48、or to the increase in the labour cost ratio (up 5.7 pp YoY), due to a considerable revenue drop. We, nevertheless, see labour cost ratio improvement in lens and handset components, reporting 1.7 pp and 1.4 pp YoY improvement, respectively, in 9M 2019. Lens still had the highest labour intensity, wit

49、h labour cost at 24.1% of 9M 2019 revenue, however, it had declined sequentially and annually to close to 2008-18 average (21.0%). Battery packs still had the lowest labor intensity at 6.8%.Labour cost as of sales were up to 17.1% of sales in 9M19, from 16.8% in 9M18Figure 15: 9M 2019 labour cost co

50、mparisonFigure 16: 9M 2019 labour cost by sector(NT$mn) 90,00080,00070,00060,00050,00040,00030,00020,00010,000labour cost (LHS)labour cost as of sales (RHS)25%20%15%10%5%Cooling, 4%Passives, 5%PCB, 29%Pow er, 26%Battery, 2%Hinge, 1%PC com, 5%00%HS ex lens, 7%Lens, 4%Casing, 12%Connector, 6%Source: C

51、ompany data, Credit Suisse estimatesSource: Company data, Credit Suisse estimatesCapexCapex for the components sector declined 11% YoY in 9M 2019, with a bigger pull back in Apple supply chain (-28% YoY) and casing (-63%), given the two industry heavy investments inprevious years. PCB accounted for

52、the largest part of components capex dollar (42%), followed by power supply, passive and lens. PC components saw the biggest YoY growth of 120%, while hinge, connector, casing and passive components also reported double-digit YoY capex growth. Capex-to-sales for the components sector declined 77 bp

53、YoY to 6.5%, vs 2008-18 average of 6.1%. Lens had the highest capex intensity, with capex-to-sales ratio reaching 17.8% in 9M 2019, followed by passive components (16.9%); battery had the lowest capex intensity (1.4%).Capex for the components sector declined11% YoY in 9M 2019, with a bigger pull-bac

54、k in Apple supply chain (-28% YoY) and casing (- 63%)Figure 17: 9M 2019 capex comparisonFigure 18: 9M 2019 capex by sector(NT$mn) 50,00045,00040,00035,00030,00025,00020,00015,00010,0005,000capex (LHS)capex-to-sales (RHS)20%18%16%14%12%10%8%6%4%2%PCB, 42%Cooling, 3%Pow er, 13%Passives, 10%Battery, 1%

55、Hinge, 1%PC com, 5%Connector, 4%Casing, 7%Lens, 9%00%HS ex lens, 5% Depreciation expenseIn 9M 2019, the components sector saw a 9% YoY increase in depreciation expense and 15% D&A as of sales increased to 5.6% in 9M19YoY increase in amortisation expense. D&A as of sales for components was up 52-bp Y

56、oY to from 5.1% in 9M185.6% in 9M19. Cooling saw the biggest YoY increase in depreciation expense by 36%, and handset, connector, and PC components also reported double-digit YoY growth on depreciation, due to expansion in the last few years. Hinge, PC components and lens saw capex outgrowing deprec

57、iation in 9M 2019.Figure 19: Capex-to-sales vs D&A-to-sales (9M 2019)Figure 20: 9M 2019 depreciation by sector20%16%12%8%D&A-to-salescapex-to-salesPCB, 38%Pow er, 15%Battery, 1%Hinge, 1%PC com, 3%Connector, 4%4%Cooling, 2%0%Passives, 6% HS ex lens, 6%Casing, 19%Lens, 5%Source: Company data, Credit S

58、uisse estimatesSource: Company data, Credit Suisse estimatesInventory and cash conversion cycleInventory dollar for the components sector declined 1% QoQ in 9M 2019, thanks to inventory depletion in casing and passive, as well as strong pull-in from smartphone (seen in lens pull back). Besides doubl

59、e-digit QoQ decline seen in casing, passive and lens inventory 9M 2019 amount, power supply, cooling and connector also saw QoQ decline, while battery, hinge and PC components saw double-digit QoQ increase. Inventory days declined sequentially and annually to 64 days, with lens and passive falling b

60、ack to last five years average. We note that bigger inventory days improvement is also seen in casing, handset components, cooling and battery. EMSs inventory increased 17% QoQ, mainly driven by WIP (+34% QoQ), and therefore we think the mismatch between EMS and components reflected customers more c