In first place for a fourth year running is Bank of America Merrill Lynch, which has earned a position on this roster every year since its 1998 debut at runner-up. The five analysts under the direction of Hong Kong–based Daniel Heyler and Dong-Je (Simon) Woo, working out of Seoul, “are very well-connected,” states one money manager. Current stock recommendations include MediaTek and Taiwan Semiconductor Manufacturing Co., both of which the analysts also touted last year, and Advanced Semiconductor Engineering. The Taiwan-headquartered companies are “entering new phases in their development, which will set them further apart from their global peers,” explains Heyler. “We think 2014 is a breakout year for all three of these companies, since all three should outgrow their peers, while marginal players are likely to consolidate due to subscale capabilities.” Their price objectives for MediaTek, TSMC and ASE are 523.66 New Taiwan dollars, NT$134.90 and NT$118.50, respectively. These targets imply premiums of 11.7 percent, 13.8 percent and 9.6 percent from the shares’ late April trading values. Another long-standing favorite is Samsung Electronics Co. The South Korean manufacturer continues to appeal thanks to its “dividend upside, increasing cash, solid fundamentals — due to technology leadership and scale — and low multiples,” Woo says. The researchers assign a target price of 1.9 million won on Samsung’s preferred shares, which closed at 1.09 million won late in April. Finally, they also urge investors to buy Taiwan’s Inotera Memories. The chipmaker, he advises, is supported by consolidation in the personal computer DRAM industry, demand from China, high return on invested capital and on equity, strong backing by its major stakeholders (Micron Technology of the U.S. and Taiwan’s Formosa Plastics Group) and a minimal threat from South Korean competitors. |
Daniel Heyler U.S. Samsung Electronics Co. America Merrill Lynch Formosa Plastics Group
