Friday, December 20, 2013

Technology Sector: Recovery likely but uncertainty lingers (OCBC)

Technology Sector:
Recovery likely but uncertainty lingers

The prospects of the cyclical tech sector are strongly intertwined with the global macroeconomic trends and outlook. Looking ahead to 2014, global economic growth is expected to outshine that of 2013. Hence, worldwide semiconductor sales, overall IT spending and the revenue of major EMS/ODM players are expected to experience positive growth in the coming year. Nevertheless, we believe uncertainties and downside risks remain, which may continue to affect business and consumer sentiment and thus the earnings visibility of tech companies. In light of the aforementioned factors, we maintain our NEUTRAL rating on the tech sector. Under our coverage, we downgrade ECS Holdings from buy to SELL, with an unchanged fair value estimate of S$0.585, as we believe its share price has outrun its fundamentals. Venture Corp [BUY; FV: S$8.50] is our new top pick in the sector, given its diverse customer base, strong balance sheet and sustainable dividend yield (FY13F: 6.7%).


Economic recovery to boost prospects, but fragility remains
The prospects of the cyclical tech sector are strongly intertwined with the global macroeconomic trends and outlook. Looking ahead to 2014, most of the major economies are expected to deliver growth at a faster pace as compared to 2013, with the exception of Japan and China, based on projections from IMF. Global semiconductor sales, overall IT spending and the revenue of major EMS/ODM players are expected to experience positive growth in 2014. Notwithstanding this optimistic outlook, we believe uncertainties and downside risks remain. This may continue to affect business and consumer sentiment and thus end user demand, resulting in cloudy earnings visibility for major tech companies and their suppliers.

Maintain NEUTRAL
In light of the aforementioned factors, we maintain our NEUTRAL rating on the tech sector. Over the longer-term, we are still positive on the sector, as technology will continue to play an integral role in business processes and people’s lifestyle. Spending on IT will trend up more robustly once the global economy recovers on a firmer footing.

Venture Corp our new top pick in tech sector
Under our coverage, ECS Holding’s share price has appreciated 37.5% since we highlighted it as our top tech sector pick on 15 Jul 2013, strongly outperforming the STI’s 5.5% decline during the same period. We now downgrade ECS from buy to SELL, with an unchanged fair value estimate of S$0.585, as we believe its share price has outrun its fundamentals, while margin pressure remains a concern for 2014. With this downgrade, we replace ECS with Venture Corp (VMS) as our new top pick in the sector. We like VMS [BUY; FV: S$8.50] for its diverse customer base, strong balance sheet and sustainable dividend yield (FY13F: 6.7%).


Source/Extract/Excerpts/来源/转贴/摘录: OCBC-Research,
Publish date:13/12/13

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Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
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做自己熟悉的事,等到发现大好机会才投钱下去

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“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

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高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
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1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
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每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
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