Table of contents
Investment thesis.................................................................................................. 3
Initiating coverage on Epistar & Everlight............................................................... 5
Valuation .............................................................................................................. 7
Cyclical factors to move LED stocks ..................................................................... 12
LED demand forecast .......................................................................................... 18
LED supply analysis............................................................................................. 35
Industry financial outlook.................................................................................... 43
Technology migration and issues ........................................................................ 47
Appendix I: Glossary ........................................................................................... 52
Appendix II: LED manufacturing process.............................................................. 54
Appendix III: Making white LEDs.......................................................................... 55
Appendix IV: Laws of LED penetration ................................................................. 56
Epistar (2448 TT) ................................................................ 58
Investment thesis................................................................................................ 59
Valuation ............................................................................................................ 60
Industry trends favor Epistar ............................................................................... 64
Earnings outlook................................................................................................. 66
Cash flow and balance sheet ............................................................................... 70
Investment considerations................................................................................... 73
Epistar company profile....................................................................................... 75
Everlight (2393 TT) ............................................................. 80
Investment thesis................................................................................................ 81
Valuation ............................................................................................................ 83
Earnings outlook................................................................................................. 87
Cash flow and balance sheet ............................................................................... 91
Investment risks.................................................................................................. 94
Investment considerations................................................................................... 95
Company overview & structure ............................................................................ 97