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Chardan: Soft Chinese 3G adds a problem for Himax

  • Light May 3G subscriber adds for Chinese carriers suggests Himax's (HIMX -3.9%) Q2 guidance is at risk, writes Chardan's Jay Srivasta, cutting his PT by $1 to $5.
  • Srivasta, who downgraded Himax to Sell in May, notes 57% of Himax's Q1 revenue was tied to small-panel LCD drivers (mostly for 3G smartphones), and that 52% of 2013 revenue came from China.
  • Worth noting: The 3G weakness is partly due to rising 4G subscriber adds. Top carrier China Mobile (CHL -0.1%) saw its 3G net adds drop to 4.3M in May from 7M in April, but also saw its 4G net adds rise to 3.3M from 2M.
  • Srivasta also reiterates his doubts about Google Glass' near-term value to Himax (previous). Shares have already been hit hard by reports Google is thinking of using a Samsung OLED microdisplay in a next-gen Glass model.
Comments (2)
  • 808Amigo
    , contributor
    Comments (295) | Send Message
     
    Looks like the discussion about Jay Srivasta at Chardan took place earlier today at the Barrons article linked above. When I look at the data provided by China Mobile, I see 3G customers increasing 1.8% to 4.6% per month in 2014 and 4G increasing 69% to 108% per month. Is Jay serious in suggesting that subscriber data from China is a reason to sell HIMX? If Jay wants to repeat Brian Blair's (Rosenblatt Securities) Samsung false rumor recycled from last year, shall we just take note and move on?
    24 Jun, 09:24 PM Reply Like
  • mike_w
    , contributor
    Comments (3) | Send Message
     
    It may be time to downgrade Jay Srivasta's professional opinion as a financial advisor. Last I check, even Taiwan is catching on to 4G, and new local players such as Foxxconn and Taiwan Star Cellular are joining this rather small ring. Since these 2 new contenders each invest heavily in China, it appears that launching 4G services in Taiwan is just their proving ground for the bigger 4G market in China. As long as this Google rumor/panic in kept in check, this is a great opportunity to load up HIMX. On a side note, gotta give it to Samsung, which never fails to be a snake.
    25 Jun, 06:06 AM Reply Like
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