Asian foreign investors recently issued a new report stating that despite the impact of consumer electronics inventory and overall economic uncertainty on SDI’s business, revenue for 2Q23 has reached a low point. In view of the shipment of charging pile energy management and IGBT modules in the third and fourth quarters, the company is likely to see its revenue return in the second half of the year. In addition, SDI is expected to achieve growth in business performance next year. Therefore, a “buy” rating is given with a target price of NT$ 150.
As SDI has reached the bottom in the second quarter, Asian foreign investors pointed out that due to the decrease in sales and lower-than-expected capacity utilization rate (UTR), coupled with recent adverse effects brought by raw materials, copper prices decreased by 7% in the second quarter, resulting in a 2 percent reduction in gross margin for 2Q23.
Due to the stricter ESG regulations with rising demand in the coming years, alternative energy projects are expected to become the next growth driver for SDI. This will help offset the weakness in the industrial sector, and sales are estimated to grow by 5% and 8% in 2023 and 2024, respectively.
Additionally, there is potential for new opportunities in electric vehicle charging station equipment. As Tesla’s charging stations gradually become the standardized solution in the United States, existing energy management solutions will also benefit. Asian foreign investors estimate that sales in SDI’s automotive sector will grow by more than 20% from 2022 to 2025.
The company’s earnings per share (EPS) for 2023, 2024 and 2025 are estimated to be NT$5.8, NT$7.3, and NT$7.7, respectively.
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