Asia Essentials

类型：投资策略机构：麦格理证券股份有限公司研究员：麦格理证券研究所日期：2016-05-16

Identifying the value behind the loT volume

We identify three major drivers behind the outperformance of the TaiwanNetworking sector vs the tech industry since 2015: 1) rising white box switchingand speed migration; 2) increasing car connectivity and ADAS/V2X penetration;and, 3) the migration in home network connection and Smart Home. We prefercompanies with higher exposure and growth potential in switches and carconnectivity/ADAS, as they have higher entry barriers and are at an early stageof a secular growth trend. While the home networking market offers basic LTdemand, it has lower IoT value share and higher pricing competition. Based onthese beliefs, we have an Outperform on Accton (2345 TT) and Wistron NeWeb(6285 TT), but a Neutral on Alpha Networks (3380 TT).

#1 White box switches and speed migration