The Bank of America Merrill Lynch crew under the guidance of Sheng-Jung (Robert) Cheng leaps from runner-up to capture the firm’s first top finish on this roster. “The entire team is very knowledgeable about the Taiwan technology supply chain,” declares one backer. Cheng’s ten-person group, based in Hong Kong, Seoul and Taipei, is neutral overall on Asia’s hardware shares, which climbed 8.1 percent over the 12 months through late April, against the broader regional market’s 3.8 percent advance. It holds a conservative view of the personal computer market, which is likely to see another, albeit smaller, decline this year, the researchers advise. At the same time, they are optimistic that U.S. consumer electronics giant Apple’s expanding product lines will lift average selling prices and component values for the supply chain. Taiwan’s Hon Hai Precision Industry Co. is particularly well positioned to benefit from Apple’s growth, notes Cheng, 48. Moreover, the electronics manufacturing services provider enjoys improving margins and a dominant position in scale and component ability. His group holds a price target of 107 New Taiwan dollars on the shares; they were trading at NT$87 in late April. The analysts also believe that companies in the hardware supply chain are looking to the cloud as the next catalyst. This development will favor Delta Electronics as it transforms from a manufacturer of video display products and power supplies into a total solution provider for data centers. At NT$202, their price objective represents a 10.4 percent premium to the stock’s late April value. Cheng also co-leads, with Chuan-Hsiang (Katherine) Hu, the team that places third for coverage of Taiwan. After tracking this sector for Credit Suisse then CLSA, he joined BofA Merrill in 2011. He holds a bachelor’s degree in chemical engineering from the National Taiwan University of Science and Technology and an MBA from the Fisher College of Business at Ohio State University. |
The 2014 All-Asia Research Team: Technology/Hardware, No. 1: Sheng-Jung (Robert) Cheng & team
