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Daiwa Securities raises target price on Delta Electronics

Daiwa Securities raises target price on Delta Electronics

Taipei, March 15 (CNA) Daiwa Securities has raised its target price on shares of Delta Electronics Inc., one of Taiwan's leading power management system providers, amid optimism toward the company's earnings outlook. The upgrade came after Delta Electronics said earlier this week that it expects earnings and sales for 2014 to hit a record high on the back of growing demand for devices in a wide range of applications, such as the 4G network, Internet services and industrial automation. As a result, Daiwa Securities has upgraded a target price on Delta Electronics to NT$195 (US$6.44) from NT$164, while the brokerage has left an "outperform" recommendation on the stock unchanged. Shares of Delta Electronics fell 2.94 percent to close at NT$181.50 on the Taiwan Stock Exchange Friday as investors seized rising tensions in Ukraine as an excuse to dump large-cap stocks in the local bourse. In 2013, Delta Electronics posted NT$17.78 billion in net profit, up 20 percent from a year earlier, while its consolidated sales rose 3 percent year-on-year to NT$177.1 billion. Its earnings per share for 2013 stood at NT$7.32, up from 2012's NT$6.09. In a research note, Daiwa Securities analyst Christine Wang said that Delta has been gearing up for acquisitions in a bid to upgrade its technology in industrial automation and broaden its distribution network in the huge China market. According to Delta Electronics, the company's robots under its industrial automation operations are scheduled to hit the market at the end of this year. Wang said revenue generated by that division for 2014 is expected to grow by more than 20 percent from 2013, when sales from the operations grew about 10 percent year-on-year. The analyst said although Delta Electronics' EPS of NT$1.95 for the fourth quarter was within market expectations, its operating margin stood at 11.8 percent, beating a market estimate of 11.2 to 11.5 percent due to its efforts to improve its product portfolio. Delta Electronics will likely see its consolidated sales for 2014 grow about 10 percent from a year earlier, higher than an increase of 3 percent seen in 2013, Daiwa Securities said. The brokerage has raised its forecasts of Delta Electronics' EPS for 2014 and 2015 by 2 percent to NT$8.6 and NT$9.99, respectively. Meanwhile, Delta Electronics has proposed issuing NT$5.8 in cash dividend for 2013. Based on its EPS, the dividend payout ratio stood at almost 80 percent. (By Lo Hsiu-wen and Frances Huang)


Updated : 2021-03-08 05:50 GMT+08:00