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June 29, 2017

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Several foreign brokerages raise target prices for Catcher shares

TAIPEI--Several foreign brokerages have raised their target prices for shares of Catcher Technology Co., a leading Taiwanese metal casing supplier, anticipating that its earnings will rise after Apple Inc. unveils the next-generation iPhone.

The upgrades also came after Catcher reported a more than 20 percent sequential increase in net profit in the second quarter and a gross margin that was the company's highest in 11 quarters.

One of the upbeat foreign brokerages, Macquarie Securities, hiked its target price for Catcher shares to NT$366 from NT$361, saying the improvement in gross margin had dispelled market fears that the yield rate for the new iPhone's casings was low.

As a supplier of components for Apple products, Catcher is thought to have begun shipping casings to the U.S. firm in the second quarter in preparation for the launch of the new iPhone in the third quarter, likely in September.

Shares of Catcher closed down 0.17 percent at NT$289.00 on the Taiwan Stock Exchange on Friday as investors locked in gains built after the company released its second quarter results Monday.

Catcher shares rose 10.7 percent from the opening of trading Monday to Thursday's close.

In the April-June period, Catcher posted NT$3.64 billion in net profit, up 22.1 percent from a quarter earlier, with earnings per share at NT$4.84, up from NT$3.97. Its gross margin stood at 49.2 percent, up 7.9 percentage points from a quarter earlier.

Macquarie said that because the second quarter results beat market expectations, the brokerage raised its forecast for Catcher's EPS in 2014 by 6.27 percent to NT$23.08. Catcher had an EPS of NT$18.38 in 2013.

It has also hiked its estimates of Catcher's EPS for 2015 and 2016 by 1.3 percent and 0.69 percent, respectively, to NT$26.11 and NT$28.54. Macquarie added that it had left its "outperform" recommendation on Catcher shares unchanged.

Equally bullish on Catcher, Daiwa Securities said it had raised its target price on Catcher shares to NT$315 from NT$296 and left its "outperform" rating unchanged.

Barclays Capital, meanwhile, boosted its target price to NT$330 from NT$310 and left its "overweight" recommendation intact.

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