Analyst Research Report Snapshot


Simplo Technology (6121 TT): Increasing Competition Pressure




MasterLink Securities Corporation


07 May 2014





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Overall, Apple growth has slowed down while new competitors have also entered the industry, which lead to weaker demands but increasing pricing pressure. Simplo’s coping strategy at the moment is to focus on developing highly automated production. We believe that this strategy can maintain Simplo’s profit but hard to drive exponential growth. In addition, development in power battery is quite slow. Therefore, there is uncertainty in growth in the long term. Current PER of 13-14x indicates that share price has already reflected the sales momentum in 2H14 peak season in advance. We thus retain our HOLD rating on Simplo with target price of NT$155.

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