FREE Stock in Focus: TECH (10 Sept 2018) by Unicapital Securities

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Summary of Broker’s Recommendation
BROKER RECOMMENDATION TARGET PRICE ISSUED ON
Unicapital Securities HOLD 35.30 10 Sept 2018

 

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Our Partner Broker’s Recommendation

The management’s planned share buyback program would allow the stockholders to realize a higher EPS and signals a protection from a dilution by a potential huge investor. Target Price for TECH is set at PHP 35.30 per share.

 

Our Partner Broker’s Detailed Analysis

Stock split has no effect on the market capitalization, but will provide market liquidity

Recently, TECH increased the number of authorized capital stock via stock split. This halved the common stock’s par value from PHP 1.00 to PHP 0.50 per share and consequently doubled the number of shares to 838.2 Million from 419.1 Million.

The 2-for-1 stock split initially resulted to a Target Price of PHP 31.70 or an equivalent price of PHP 63.40, which hit our previous price target of PHP 62.75. We see this move as a preparation for the planned follow-on-offering in 2019, as well as promotion of the stock’s marketability.

 

Exceeded expectations

We revised our revenue forecast as the contribution of Quintel in 1H 2018 exceeded our projections. We expect Quintel to continue driving TECH’s business portfolio, heavily supported by the global demand growth forecast for the antenna solutions of 6.6% CAGR from 2018-2023 driven by the evolving IoT, based on Mordor Intelligence’s research.

 

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Unicapital Securities
Unicapital Securities

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