【出版时间及名称】：2010年3月美国电子制造行业研究报告
        【作者】：Collins Stewart证券
        【文件格式】：pdf
        【页数】：58
        【目录或简介】：
Launching EMS Sector w/ Bullish
View
n Should be the Beginning of a Few Good Years.
We are continuing our bullish view on tech, and launching with a positive
view on the EMS industry as we believe a number of factors are coming
together, in a positive way, to drive double-digit top line growth over the
next two years. We are starting off with three Buy ratings & one Hold
rating. In order of preference, our Buys are Celestica (CLS), Jabil (JBL), &
Flextronics (FLEX) followed by Hold-rated Sanmina-SCI (SANM).
n To a Certain Degree It's Macro.
First and foremost is the rebound we see kicking in post the Great
Recession, lifting demand for products our EMS companies build. This
should provide a base growth rate for our companies of about 5% for the
next two years. Second, we believe certain areas will contribute to new
outsourcing opportunities, mostly auto, aerospace, industrial,
instrumentation, military, medical, (we use the acronym "AAIIMM"),
adding another 2.5% points of growth. We do not believe that this group
will drive growth back to what it was during the golden EMS years of
1995-2000 when waves of billion dollar programs moved from
comm/computer companies to the EMS providers. However, the AAIIMM
area collectively is a $480B TAM, with less than 5% outsourced. It will
come out slow, and in smaller programs, but we expect a steady flow.
Then the consumer / cell phone area should add another 2.5% of growth
as additional unit demand will move work back into the EMS portfolio.
Comm/computing is rather mature these days from an outsourcing
perspective, in our opinion.
n Material Operating Leverage.
From a margin perspective, all the restructuring of the past ten years has
provided a step function higher in operating margins (OM), finally, to the
3%-3.5% range, levels not seen since 2004. It doesn’t stop there though
as incremental revenue over the next year or two should contribute
10%-20% margins, depending on type of customer and mix. Finally,
valuation is still attractive as the EMS names are trading at single digit
PEs on the out year, but showing solid double-digit earnings growth. We
believe all this will lead to an out-performance of the group compared to
the S&P 500.
n Celestica (CLS - $10.79) – Buy - $15 price target based on 12X
2011 EPS and add back ~$3 of net cash.
n Flextronics (FLEX - $7.22) – Buy - $10 price target based on 11X
FY12 (March) EPS.
n Jabil Circuit (JBL - $17.06) – Buy - $21 price target based on 13X
FY11 EPS.
n Sanmina-SCI (SANM - $17.32) – Hold.