Taiwan Surface Mounting Technology (TWSE:6278) - Share price, News & Analysis

Q: What is the Fair Price of 6278 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

6278 (NT$104.5) is trading below our estimate of [[fair value]] (NT$189.31)

6278 fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	4/6
Past Performance	5/6
Financial Health	5/6
Dividends	3/6

6278 Stock Overview

Taiwan Surface Mounting Technology Corp. provides LCD surface-mount technology production solutions worldwide.

Rewards

Trading at 44.8% below our estimate of its fair value

Earnings are forecast to grow 20.81% per year

Earnings grew by 61% over the past year

Risk Analysis

High level of non-cash earnings

Dividend of 5.74% is not well covered by earnings

Volatile share price over the past 3 months

Taiwan Surface Mounting Technology Competitors

ELAN Microelectronics

TWSE:2458

NT$29.3b

AP Memory Technology

TWSE:6531

NT$33.3b

Xintec

TPEX:3374

NT$33.6b

Sigurd Microelectronics

TWSE:6257

NT$23.3b

Price History & Performance

Summary of all time highs, changes and price drops for Taiwan Surface Mounting Technology
Historical stock prices
Current Share Price	NT$104.50
52 Week High	NT$144.00
52 Week Low	NT$75.10
Beta	1.33
1 Month Change	22.80%
3 Month Change	-0.48%
1 Year Change	2.45%
3 Year Change	32.78%
5 Year Change	319.68%
Change since IPO	1,070.36%

Shareholder Returns

	6278	TW Semiconductor	TW Market
7D	4.5%	5.9%	3.6%
1Y	2.5%	-13.9%	-7.8%

Return vs Industry: 6278 exceeded the TW Semiconductor industry which returned -13.9% over the past year.

Return vs Market: 6278 exceeded the TW Market which returned -7.8% over the past year.

Price Volatility

Is 6278's price volatile compared to industry and market?
6278 volatility
6278 Average Weekly Movement	6.8%
Semiconductor Industry Average Movement	6.5%
Market Average Movement	5.1%
10% most volatile stocks in TW Market	8.4%
10% least volatile stocks in TW Market	2.5%

Stable Share Price: 6278 is more volatile than 75% of TW stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: 6278's weekly volatility (7%) has been stable over the past year, but is still higher than 75% of TW stocks.

About the Company

Founded	Employees	CEO	Website
1990	n/a	Kai-Yun Wu	https://www.tsmt.com.tw

Taiwan Surface Mounting Technology Corp. provides LCD surface-mount technology production solutions worldwide. The company offers digital camera and cellular phone LCD panel, notebook and television TFT-LCD panel, LED TV power supply, and LCD TV inverter control boards. It also provides micro projector and touch panel, DVD R/W, TV set, and lighting application control boards, as well as wireless controllers and refrigerator display panels; and digital camera/cellular, automotive dashboard panel, notebook, and PC/LCD television backlight bars.

Taiwan Surface Mounting Technology Fundamentals Summary

How do Taiwan Surface Mounting Technology's earnings and revenue compare to its market cap?
6278 fundamental statistics
Market Cap	NT$29.68b
Earnings (TTM)	NT$4.50b
Revenue (TTM)	NT$71.96b

6.8x

P/E Ratio

0.4x

P/S Ratio

Is 6278 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
6278 income statement (TTM)
Revenue	NT$71.96b
Cost of Revenue	NT$62.81b
Gross Profit	NT$9.15b
Other Expenses	NT$4.66b
Earnings	NT$4.50b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	15.38
Gross Margin	12.72%
Net Profit Margin	6.25%
Debt/Equity Ratio	56.2%

How did 6278 perform over the long term?

See historical performance and comparison

Dividends

5.7%

Current Dividend Yield

39%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 6278 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 6278?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 6278. This is calculated by dividing 6278's market cap by their current preferred multiple.
What is 6278's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	NT$29.68b

6278 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.4x
Enterprise Value/EBITDA	3.6x
PEG Ratio	0.3x

Price to Earnings Ratio vs Peers

How does 6278's PE Ratio compare to its peers?

6278 PE Ratio vs Peers

The above table shows the PE ratio for 6278 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	11.2x
2458 ELAN Microelectronics	6.9x	-4.1%	NT$29.3b
6531 AP Memory Technology	14.1x	1.8%	NT$33.3b
3374 Xintec	17.1x	-4.1%	NT$33.6b
6257 Sigurd Microelectronics	7x	-7.8%	NT$23.3b
6278 Taiwan Surface Mounting Technology	6.8x	20.8%	NT$29.7b

Price-To-Earnings vs Peers: 6278 is good value based on its Price-To-Earnings Ratio (6.8x) compared to the peer average (11.2x).

Price to Earnings Ratio vs Industry

How does 6278's PE Ratio compare vs other companies in the TW Semiconductor Industry?

Price-To-Earnings vs Industry: 6278 is good value based on its Price-To-Earnings Ratio (6.8x) compared to the TW Semiconductor industry average (12.9x)

Price to Earnings Ratio vs Fair Ratio

What is 6278's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

6278 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	6.8x
Fair PE Ratio	18.2x

Price-To-Earnings vs Fair Ratio: 6278 is good value based on its Price-To-Earnings Ratio (6.8x) compared to the estimated Fair Price-To-Earnings Ratio (18.2x).

Share Price vs Fair Value

What is the Fair Price of 6278 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 6278 (NT$104.5) is trading below our estimate of fair value (NT$189.31)

Significantly Below Fair Value: 6278 is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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Future Growth

How is Taiwan Surface Mounting Technology forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

20.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 6278's forecast earnings growth (20.8% per year) is above the savings rate (0.7%).

Earnings vs Market: 6278's earnings (20.8% per year) are forecast to grow faster than the TW market (6.2% per year).

High Growth Earnings: 6278's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 6278's revenue (9.4% per year) is forecast to grow faster than the TW market (7.2% per year).

High Growth Revenue: 6278's revenue (9.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if 6278's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Taiwan Surface Mounting Technology performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

39.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 6278 has a high level of non-cash earnings.

Growing Profit Margin: 6278's current net profit margins (6.3%) are higher than last year (5.5%).

Past Earnings Growth Analysis

Earnings Trend: 6278's earnings have grown significantly by 39% per year over the past 5 years.

Accelerating Growth: 6278's earnings growth over the past year (61%) exceeds its 5-year average (39% per year).

Earnings vs Industry: 6278 earnings growth over the past year (61%) exceeded the Semiconductor industry 50.6%.

Return on Equity

High ROE: 6278's Return on Equity (26.2%) is considered high.

Discover strong past performing companies

Financial Health

How is Taiwan Surface Mounting Technology's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 6278's short term assets (NT$37.4B) exceed its short term liabilities (NT$30.6B).

Long Term Liabilities: 6278's short term assets (NT$37.4B) exceed its long term liabilities (NT$5.4B).

Debt to Equity History and Analysis

Debt Level: 6278 has more cash than its total debt.

Reducing Debt: 6278's debt to equity ratio has increased from 39.4% to 56.2% over the past 5 years.

Debt Coverage: 6278's debt is well covered by operating cash flow (47.7%).

Interest Coverage: 6278's interest payments on its debt are well covered by EBIT (56.3x coverage).

Balance Sheet

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Dividend

What is Taiwan Surface Mounting Technology current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

5.74%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 6278's dividend (5.74%) is higher than the bottom 25% of dividend payers in the TW market (2.46%).

High Dividend: 6278's dividend (5.74%) is low compared to the top 25% of dividend payers in the TW market (6.44%).

Stability and Growth of Payments

Stable Dividend: 6278's dividend payments have been volatile in the past 10 years.

Growing Dividend: 6278's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (39%), 6278's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (618.4%), 6278's dividend payments are not well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

14.5yrs

Average management tenure

CEO

Kai-Yun Wu (62 yo)

31.33yrs

Tenure

Mr. Kai-Yun Wu has been the Chief Executive Officer of Regent Manner International Holdings Limited since January 22, 2013. He is Chairman at Taiwan Surface Mounting Technology Corp. and also its Director...

Leadership Team

Experienced Management: 6278's management team is seasoned and experienced (14.5 years average tenure).

Board Members

Experienced Board: 6278's board of directors are seasoned and experienced ( 16.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/18 00:00
End of Day Share Price	2022/08/18 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31