CS conference takeaways: The Credit Suisse ATC was held in Taipei from
16-18 September, featuring almost 300 investors and over 100 companies.
In this report, we include the key takeaways from the 63 tech and six nontech
company presentations.
■  Management teams becoming more upbeat: Optimism approached that
of 2007, with 56% of tech companies positive, closer to the 68% positive
level achieved in 2007 versus the 23% positive in the week when Lehman
Brothers collapsed last year. Management remains optimistic on build
patterns, citing business at least on track for 3Q09 guidance and an early
look at 4Q09 in line with seasonal patterns. Visibility is short, and investors
and management remain wary of any change in orders or cancellations,
which remain scarce. The strong build raises the risk on sell-through
although, to date, NPD data and consumer unit demand sell-through
remains supportive.
■  Key Stocks: We maintain our positive view on the tech sector with
valuations in the mid zone, but with potential for further earnings upgrades
and an additional lever from corporate in 2010. Our top picks remain
Samsung Electronics, Hon Hai, Delta, Asustek, Foxconn Tech and ASE.
Within our Taiwan universe, we continue to like the property names and note
a positive outlook from Taiwan Fertilizer and Chong Hong confirming
improving trends seen in our recent upgrade of the Taiwan property sector.