Since March 2009, with gradual recovery of consumer confidence, the whole semiconductor industry saw obvious upturn and monthly sales revenue of global semiconductor grew for two consecutive months; besides, industrial leading indicator, North American Book-to-Bill Ratio of semiconductor equipment rallied for three consecutive months. With regard to companies, operation ratio of IC close beta field in Taiwan was expected to return to 85% in Q2 2009, and that of domestic IC close beta field had almost returned to the level prior to the financial crisis.
The company’s profitability and growth is one of leaders in domestic IC close beta field.
2009-2010E EPS is predicted to be Rmb0.28 and Rmb0.41 respectively, representing dynamic P/E ratio at 23x and 16x based on closing price of Rmb6.37 on June 8, 2009, which is obviously advantageous compared with 2010E average dynamic P/E ratio of domestic IC close beta field at 27x. We hold that rational estimation should be Rmb8.2~10.25, with implied dynamic P/E ratio at 20x~25x, thus investment rating is upgraded to “Overweight”.