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Daiwa Securities increases target price on MediaTek

TAIPEI--Daiwa Securities raised its target price on shares of Taiwan-based integrated circuit designer MediaTek Inc. (聯發科) Thursday amid optimism that the high-tech company will surpass its fourth- quarter sales goal.

In a research note, the brokerage said MediaTek is likely to benefit from strong demand for smartphone chips from China, with Chinese smartphone vendors expected to build up inventories ahead of a buying spree during the Lunar New Year holiday, which starts in late January.

The solid demand from China is expected to offset the impact of the fourth-quarter slow-season effect for the semiconductor industry so that MediaTek is likely to top its sales guidance for the three months, Daiwa Securities said.

At an investor conference held in early November, MediaTek said it expected its consolidated sales for the fourth quarter to range between NT$37.1 billion (US$1.24 billion) and NT$39 billion, down up to 5 percent from a quarter earlier.

Holding an upbeat mood about the IC designer's fourth-quarter sales, Daiwa Securities said it has raised its target price on MediaTek shares to NT$526.00 from NT$480.00, while leaving its “buy” recommendation on the stock unchanged.

Shares of MediaTek rose 2.63 percent to close at NT$429.00 Thursday as buying was sparked by hopes that it will not face any difficulties hitting its sales target. The stock outperformed the main board, where the weighted index ended up 0.69 percent.

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