Table Of Contents
Stocks better withstand competition risks ..................................... 3
Top picks: Hon Hai, Simplo, Synnex and Delta ................................................................. 3
Hon Hai: in a better position to weather the negative pricing trend ................................. 4
Simplo: diversified product portfolio should start to pay off ............................................. 7
Synnex: a LT beneficiary from China IT distributors’ consolidation .................................. 9
Delta: multiple expansion to be the key share price driver in 2013 ................................. 12
Wistron in our preferred pick in the PC OEM/NB ODM space ........................................ 14
Staying Neutral on turnaround theme in the handset space; downgrading Largan to
Hold .................................................................................................................................. 15
Growing smartphone pricing pressure on mix shift ..................... 17
Growing emerging market importance drives mix shift to mid- to low-end ................... 17
China’s example suggests mix shift to low-end .............................................................. 19
Case study: Coolpad ......................................................................................................... 21
Intensified competition between converged devices ................... 23
Vaguer boundaries between converged devices to drive competition ........................... 23
Decreasing smartphone subsidies form operators .......................................................... 25
Growing competition in the tablet PC space ................................................................... 26
Converged devices’ hardware spec hard to differentiate ............ 27
Consolidation in the PC-centric industry ...................................... 30
HDD industry case study .................................................................................................. 31
US distributor industry ..................................................................................................... 34
Earnings/estimates revisions ........................................................ 36
HTC ................................................................................................................................... 36
Largan ............................................................................................................................... 38
FIH .................................................................................................................................... 41
Valuation and risks ....................................................................... 46