Goldman Sachs expects Compal to do well on strength of Nokia, other growth
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The optimism in the air around Nokia’s Lumia growth is also affecting the prospects of their suppliers.
Goldman Sachs have announced that they expect Compal to do very well in the second half of 2013 due to bigger orders from Nokia, Sony Corp. and Lenovo.
"We believe such strong revenue expansion may bring substantial operating leverage and may surprise the market on the upside, after the possible net losses in the first half of 2013 due to lack of scale," said Robert Yen, a Taipei-based analyst at Goldman Sachs.
The company is also likely to pick up more contract manufacturing orders from Nokia after tapping into Nokia’s Windows Phone 8 product portfolio, he said.
They expect Compal’s H2 revenue to near treble their H1 revenue, such that Compal Communications’ second-half revenue will account for 74 percent of its full-year revenues.
Goldman Sachs kept its "buy" rating on the stock and set a target price of NT$57 (US.$1.9).
Nokia grew Lumia sales 27% between Q4 2012 and Q1 2013, and has said they expect even stronger growth between Q1 and Q2 2013. Given, with only 2 weeks left in Q2 2013, and that the company has not yet warned that this forward-looking statement is incorrect, we can assume Nokia managed to hit their shipment targets, and that more than 7 million Lumias were sold in Q2, with further growth expected over the course of the year.
