Hiwin reported sales of TWD4.32b, up 18.8% q-q and 22.1% y-y, which was in-line with our expectation. However, the 2Q15 reported EPS came in at TWD1.64, down 17.0% q-q and 30.4% y-y; the result was 20%/21% below our expectation and Bloomberg consensus. The 2Q15 gross and operating margins came in at 35.9%/15.2%, also much lower than our and consensus expectations of 39.9%/38.6% for its gross margin and 19.1%/19.4% for its operating margin. The non-operating losses came in at TWD86m, lower than 1Q15 losses of TWD131m. (Comment from BNP)

2Q15 results beat expectation due to non-operating items (1.54bn NTD NP from non-op). 2Q15 net profit came in at TWD4.66bn (EPS: TWD1.82), much higher than Bloomberg consensus estimates.

3Q guidance: company expects non-PC biz to grow 20-30% qoq and PC biz up single-digit. Overall, no surprise. Daiwa maintains 18% qoq revenues growth forecast.

Apple business: increased iPhone assemble allocation (20% 2014 -> 23-25% 2015). iPhone 6S assemble numbers: most bearish number 65-70mn for 2H15 (Daiwa's estimate is 80-85mn). Daiwa estimated iphone-related revenue would account for 49% of total Pegatron's 2015E revenue.

2Q15 revenue was 2% below consensus while operating profit was 8% above. Non-GAAP EPS increased by 35% to RMB 0.85, 6% above consensus. Higher margins were due to low SG&A, because of the low tax app subsidy.

Mobile game revenue was a little disappointed while online ad revenue beat (97% yoy growth).

Opinion: 12-m forward BB P/E is 31X, in the mid of its historical range. Mobile game will still be under pressure while online ad business is the new driver. Hold rating now.

Revenue increased 28% yoy to RMB20.2 bn in FY1Q16, a little below estimate.

• GMV: grew +34% yoy to RMB673 bn (Taobao +25% yoy to RMB427 bn, TMall +55% to RMB 246bn), considerably slower than the 40%/49% yoy growth seen in FY4Q15/FY3Q15. Active buyers grew 32% yoy to 367mn and average GMV per buyer grew 2% yoy.
• Monetization ratio: blended 2.33% was substantially weaker than 2.52% a year ago. Mobile take rate increased strongly to 2.16% (vs. 1.73% a year ago), while mobile GMV accounted for 55% of total GMV (vs. 33% last year). PC take rate was hit by the suspension of online lottery (RMB500 mn of revenue lost yoy) and price cuts on Juhusuan (only 2.55% in this quarter vs. 3.02% last year).

If lottery sales & SME loan business revenue was excluded, total revenue would have increased by 36% yoy.

Valuation: Alibaba's 12-mon forward P/E was continued to be adjusted down from nearly 45X in Nov2014 to 25X now. Due to negative sentiment about e-commerce now, current vauaton level is fair. Wait for entry point.

Tencent (700 HK): 12-m forward BB P/E is about 31X.

2Q15 result:

• Revenue: increased by 18.8% to HKD16.9 bn.
• GM: BT 13%; cash construction in HK improved to 7.1% as some big projects entered into profit recognition; cash contruction in Macau remained low at 4.1% given MGM project will not be recognized till 2H15;
• DPS: 0.15HKD (vs. 0.11HKD in 1H14);
• Order target: FY15 order has been adjusted up from HKD68 bn to HKD 70bn.

CNY depreciation: no big impact on CSCI's earnings. 1) Depreciation will be controlled; 2) FX difference is included in other comprehensive income (instead in net profit); 3) USD/HKD debt may be paied used cash generated in HK/Macau. Hard to calculate the exact number, but the total impact is limited.

Valuation & Opinion: Trading at 11X/9X FY15/16E P/E with 21% FY15-FY17 EPS CAGR. Historical 12-m forward P/E was 9X ~ 16X, current 9.1X 12-m forward P/E is near its trough. 10%-30% upside potential. Maintain Hold. Will not put it into my core holding (paper portfolio) due to its upside space.

1QEY16 results: below estimation. Revenue increased 3% though having IBM X86 server biz & Moto SP biz included. Flattish topline was due to weak PC & SP. GM is 15.4%, at a high level. OPEX is much higher, due to acquired business, and macro-economic challenges in Brazil and Latin America. EBT declined 80% yoy to USD 52mn. Net income declined 51% yoy to USD 105mn.

Revenue breakdown:

• PC: USD 7,282mn, -13% yoy, EBT margin 5.1%, improved 0.3ppt yoy;
• Mobile biz: USD 2,114mn, +33% yoy (including Moto & Lenovo). Moto contributed 1.2bn. Pre-tax loss 292mn, EBT margin -13.8%.
• Enterprise: USD 1,077mn, 5.8X yoy (including ThinkServer & System X).
• Others: USD 243mn.

Value analysis about Lenovo's mobile business (Source: JPM, 08/13/2015):

Opinion: Buy rating. Current price is corresponding to FY17 BB P/E 9.5X, in the low range. 10-30% upside.