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16 June 2012
In-Cell & Touch Panel
A major breakthrough in display: Opportunity in smartphone and Tablet PC
Given uncertainty surrounding In-cell touch panel technology (“In-cell”), we illustrate (1) where In-cell is in terms of technology spectrum; (2) Incell cost structure analysis; (3) quantify impact of In-cell for supply chains; and (4) implications for major LCD panel and touch panel makers. What’s In-cell technology? In-cell touch panel is a display panel integrated with touch sensor which is a thinner, lighter and more flexible touch solution. This is economically viable for single models with big volume (i.e. iPhone). Since it requires only one lamination layer, this provides set makers one-stop solutions and can match with any kind of cover lens such as 3D or curved lens design. In-cell will save up to 20% over add-on type: We estimate In-cell to reduce panel costs by around 20% which will help to alleviate set makers' burden in touch devices' BOM. Also, LCD makers could enjoy attractive margins leveraging their vertical integration once yield rate is on the right track. As the screen size is getting bigger, the additional value to LCD panel makers would be much bigger than the current revenue opportunity and also bring new value in touch functions. Meaningful revenue opportunity in Apple’s products: Assuming iPhone 5 is using In-cell panels, we forecast three panel makers, LGD, Sharp, and Japan Display combined will generate In-cell revenue of US$3.6 billion in 2012 and US$8.0 billion in 2013, respectively. If Incell panels (Oxide backplane) are used in iPad which theoretically reduces 7% of total BOM, then total In-cell revenue opportunity in iPad would be almost US$6.0 billion. Hence, a combined In-cell revenue opportunity would be US$14 billion in 2013, by our estimation. LCD panel makers vs. Touch panels: We forecast LCD makers’ revenue to increase while Touch panel players witness a shrinking trend with multiple contraction. Hence, LCD panel makers (LGD and Sharp) with strong position in In-cell technology will deserve higher multiple, in our view. Among touch panel players, a leading touch panel maker like TPK could still enjoy its industry leadership in the next couple of years.
Display and Touch Panel player valuation
Company LGD Sharp TPK Wintek Ticker 034220 KS 6753 JT 3673 TT 2384 TT Rating OW OW OW N TP (LC) 36,000 650 500 23 Price (LC) 22,300 412 455 16 Upside Downside 61% 58% 10% 46% Market cap (US$ B) 6.9 5.8 3.6 0.9 P/B(x) 12E 0.8 0.7 3.0 0.7 13E 0.7 0.6 2.2 0.7
Asia-Pacific Tech Research
Technology - Semiconductors JJ Park
(822) 758-5717 email@example.com J.P. Morgan Securities (Far East) Ltd, Seoul Branch
(886-2) 2725-9899 firstname.lastname@example.org J.P. Morgan Securities (Taiwan) Limited.
(81-3) 6736-8637 email@example.com JPMorgan Securities Japan Co., Ltd.
(82-2) 758- 5712 firstname.lastname@example.org J.P. Morgan Securities (Far East) Ltd, Seoul Branch
(91-22) 6157-3261 email@example.com J.P. Morgan India Private Limited
Panel & Touch YTD performance
40% 20% 0% -20% -40% -60% LGD
-11% -39% Sharp TPK -27% Wintek
P/E(x) 12E 14.3 na 8.9 31.6 13E 5.8 4.9 8.4 19.8
ROE (%) 12E 13E 5.4 12.4 2.2 36.6 2.2 13.7 30.5 3.4
Source: Bloomberg, J.P. Morgan estimates
See page 19 for analyst certification and important disclosures, including non-US analyst disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. www.morganmarkets.com
JJ Park (822) 758-5717 firstname.lastname@example.org
Asia Pacific Equity Research 16 June 2012
Table of Contents
What is In-cell technology? .....................................................3
In-cell technology in touch panel trend ....................................................................3 In-cell vs. OGS (One Glass Solution) ......................................................................4 In-cell touch panel cost structure .............................................................................5
How big is In-cell? ....................................................................6
Methodology...........................................................................................................6 In-cell supply/demand .............................................................................................6 In-cell ASP and revenue trend .................................................................................9 In-cell technology beyond iPhone..........................................................................10
Market Cap comparison: TFT-LCD vs. Touch Panel..............................................12 Implications to LGD..............................................................................................13 Implications to Sharp ............................................................................................14 Implication to Japan Display .................................................................................15 Implications to Touch Panel players ......................................................................15
Appendix I: In-cell supply/demand model............................17
2012.P. Two options for eliminating the sensor substrate are sensoron-cover and in-cell/on-cell touch. we have witnessed issues with durability under high-temperature photolithography. (2) Micro-switches (voltage-sensing). the sensor is integrated into one display panel. (2) in-cell cost structure analysis. Touch sensor can be: (1) Lightsensing elements (light-sensing).JJ Park (822) 758-5717 jj. and more flexible touch solution In-cell touch panel is a display panel integrated with touch sensor that is physically underneath either TFT or the color filter.park@jpmorgan. Where are we in terms of the trend? Conventional add-on projected capacitive touch includes a sensor substrate with ITO pattern that senses the users’ touch. lighter. One Glass 2D / 2. customization for touch panels seems to be a bottleneck for in-cell to see wider adoption. Morgan Cover Lens Type Touch Module Maker 2D/2. What is In-cell technology? In-cell technology in touch panel trend Thinner. 3 . J. and (3) Capacitive electrodes (charge-sensing). With sensor-on-cover. we made an attempt to: (1) see where in-cell is in terms of technology spectrum.com Asia Pacific Equity Research 16 June 2012 Given uncertainty around in-cell technology. one-glass solution: Implications from Korean panel makers" by Narci Chang published on 26 March. as is the controller IC. the ITO pattern is on the cover lens (bottom side). However. and (5) implications for key stocks.5D/3D Add-On 2D SOC. (4) comparison b/w TFT-LCD and Touch Panel. Figure 1: Touch Panel type by category Sensor Substrate w/ Sensor substrate Touch Module Structure w/o Sensor substrate Panel Maker Source: Display Search. with in-cell/on-cell touch. (3) quantify potential impact of in-cell to supply chains. Please refer to our last touch panel sector report for details:"Touch Panel Sector: In-cell vs. placed between the TFT array substrate and the color filter substrate. yield rate losses related to lamination. Being not flexible. and others.5D / 3D In/On-cell Sensor Patterning G/G or G/F/F By Separate ITO Patterning by Piece or Sheet In/On-cell Built-in Sensor Lamination & Layer # Cover Lens & Controller Panel Touch Module Maker Controller Panel Cover Lens Market view on In-cell In-cell may be more economically viable for single models with big volume.
hence it requires only one lamination layer as OGS.com Asia Pacific Equity Research 16 June 2012 In-cell vs. the sensors and controller IC are built into the panel. OGS (One-Glass-Solution) Sensor-on-cover OGS/SOC 3D Cover Lens Sheet type has difficulty forming 3D when ITO sensor is already on. J. This could lead to a decline in sensitivity. hence it leads to lower yield rate at an initial stage. in-cell can match with any kind of cover lens while OGS cannot easily support 3D or curved lens design. Brands with large volume seller (i.e. Unlike touch module makers. Piece type has more difficulty with patterning on 3D form No need to match any kind of cover lens except tuning controller/IC Panel Source Brands have multiple sources of panel makers to match touch modules Brands have more limited selection of panel makers IC & Spec. J. Morgan. covered by Mark Moskowitz) can fully enjoy incell technology's benefit. Table 2: Who is working on what? LightSensing In-Cell In-Cell In-Cell In-Cell In-Cell In-Cell In-Cell In-Cell In-Cell On-Cell VoltageSensing In-Cell In-Cell Charge-Sensing In-Cell In-Cell In-Cell On-Cell On-Cell On-Cell On-Cell Resistive On-Cell On-Cell Developing Phase MP in 2H12 MP (Galaxy) MP in 2H12 R&D R&D MP in 2H12 MP in 2H12 MP in 1H12 MP in 4Q12 R&D R&D Sharp Samsung Mobile AUO Hitachi CPT Sony TMD LGD CMI HannStar Wintek On-Cell In-Cell In-Cell On-Cell On-Cell Source: Display Search. but not flexible for customization Inner Mechanics Additional FPC and controller IC still occupy inner mechanical room Good for integration on IC and signal cable In-cell Source: Display Search. sensor. panel makers have to decide how to invest in cover lens finishing 4 . and panel Good for integration. intensive integration could drive up the cost of customization if panel makers want to serve multiple customers.JJ Park (822) 758-5717 jj. In addition. change.P. where to procure IC solutions. Possible scenarios: collaboration b/w panel and touch panel players In-cell and OGS/SOC involve cover lens and lamination processes and both approaches avoid the sensor substrate. Apple. OGS (One Glass Solution) Key advantages: easier integration and one-shop solution As for in-cell/on-cell touch. This provides set-makers onestop solutions.park@jpmorgan. making the device lighter. 3D is limited to premium models. panel sources. Customization dilemma is not serious for OGS type as brands have flexibility choosing options. Who will use In-cell? The feasibility of customization ultimately depends on the scale of business. it requires additional processes to mature. It could create noises which interfere with TFT-LCD ICs. Beside. Additionally.P. Customization Easier to select. or tune performance from controller IC. and touch module makers. Morgan. Table 1: Comparison of In-cell vs. *SOC = Sensor on Cover Key disadvantage: bottleneck lies in customization While easier integration or 3D cover lens provide benefits.
2011. it will reduce panel cost by approximately 20% (assuming same panel size). % 11% 8% 16% Cover glass FPCB & Chip Touch sensor Cost down ~20% Cover glass FPCB & Chip TFT LCD + Touch control +15% +10% 62% TFT LCD +70% Panel Price $37 Panel Price $?? Source: J. In this case. this will help alleviate set makers' burden in touch device’s BOM. TPK) with strengths in cover lens finishing process and lamination can still benefit in our view. then touch module makers can still benefit.5" TFT-LCD capacitive panel.JJ Park (822) 758-5717 jj. touch panel players (i. As Narci Chang. Morgan estimates. assuming yield rate is mature As mentioned above. According to our estimates. *Above cost structure is assuming 3. touch panel analyst.com Asia Pacific Equity Research 16 June 2012 capacity. In-cell touch panel cost structure In-cell will save up to 20% compared to add-on type touch panel. We believe TFT-LCD panel makers will enjoy attractive margins leveraging their vertical integration and gather increasing touch-embedded panel orders once yield rate is on right email@example.com. Figure 2: Cost structure comparison b/w In-cell and OGS $. but will gain less revenue since only lamination is needed instead of the whole touch module.P. Actual price may vary 5 . one key advantage of in-cell touch panel is integration of TFTLCD panel with touch sensor functionality. flagged in touch panel industry note (“Recent concerns about tight key component supply appears to be overblown”) published on 16 February. If set-makers allocated some or entire cover lens and lamination process.
0 37. Current in-cell's yield rate is expected to hover around 60-70% vs. OGS's at over 80% on average.5 2.2 1.0 1.5 Proportion 11% 5% 3% 1% 6% 75% Source: Display Search. we estimate total in-cell capacity to climb up to +450K/Qtr by end of 2013E on square meter basis. J.P.0 0. it is difficult to gauge the price of In-cell type display module. Since In-cell has not been manufactured on a mass scale.3 0.com Asia Pacific Equity Research 16 June 2012 Manufacturing cost comparison Aside from touch panel BOM difference.0 3.5 Glass substrate 730 1500 600 1300 920 1850 720 1500 Monthly glass capacity (K) 3Q12E 4Q13E 65 80 25 25 53 53 35 35 18 18 Yield rate 3Q12E 73% 58% 64% 63% 64% 4Q13E 80% 75% 76% 75% 76% In-cell supply/demand In-cell capacity to hover around 466K/Qtr by 2013E According to our estimates.8 35.P. % iPhone 4S (3.7 1.5 5.JJ Park (822) 758-5717 jj.park@jpmorgan. iPhone Next-series) US$.4 2. OGS has separate processes for cover glass and color filter). the manufacturing costs are theoretically lower in OGS than In-cell considering yield rates. (In-cell runs multiple processes on the color filter. J.6 100% Next iPhone series (assuming 4") Component Cover glass Chip FPCB OCA Others TFT-LCD + Touch control Price $ 5.3 0.0 Proportion 11% 16% 5% 3% 1% 2% 62% 100% Total 47. Gap is expected to decrease as LGD increases its allocation from 4Q12E. Morgan estimates” Gen 4. 6 .8 23. Morgan estimates How big is In-cell? Methodology Our in-cell supply/demand is based on below key assumptions.5 6. but we believe the manufacturing costs would be higher than that of OGS solution since it does not have to scrap out the color filter even if it fails during photolithography process. Major difference b/w adjusted capacity and max capacity comes from LGD's increasing allocation to previous technology line. Table 4: In-cell supply key assumptions Line LGD AP2 LTPS Sharp Kameyama line Japan Display Ex-Sony Ex-TMD D2 Source: Company data.5") Component Cover glass Glass sensor Chip FPCB OCA Others TFT-LCD Total Price $ 4. TFT-LCD LTPS for previous iPhone series. Table 3: In-cell touch panel BOM comparison (iPhone 4S vs.2 6.
J. Morgan estimates Average yield rate to be 68% in 2012E and 76% in 2013E As of 1H12. 7 . J.P. we forecast all panel makers to run the line at full-capacity.P. Morgan estimates.park@jpmorgan. According to our industry check. Morgan estimates Source: Company data. we estimate industry average yield rate is around 60-70%. *Adjusted-capacity = capacity x allocation (%) Figure 5: Yield rate assumptions by panel makers % 85% 80% 75% 70% 65% 60% 3Q12E 4Q12E LGD AP2 LTPS 1Q13E 2Q13E 3Q13E Japan Display 4Q13E Sharp Kameyama line Figure 6: UTR assumptions by panel makers % 100% 95% 90% 85% 80% 3Q12E 4Q12E LGD AP2 LTPS 1Q13E 2Q13E 3Q13E Japan Display 4Q13E Sharp Kameyama line Source: Company data. we believe Sharp and Japan Display will catch up with LGD in terms of yield rate and start fullscale production in 3Q12E. LGD seems to be on right track and should soon be ready for commercial production. J.com Asia Pacific Equity Research 16 June 2012 Figure 3: Quarterly in-cell capacity by panel makers Unit in 000sqm 250 200 150 100 50 0 3Q12E 4Q12E LGD AP2 LTPS 1Q13E 2Q13E 3Q13E Japan Display 4Q13E Sharp Kameyama line Figure 4: Quarterly in-cell adjusted-capacity by panel makers Unit in 000sqm 200 150 100 50 0 3Q12E 4Q12E LGD AP2 LTPS 1Q13E 2Q13E 3Q13E Japan Display 4Q13E Sharp Kameyama line Source: Company data. Despite lower yield rate compared to LGD.JJ Park (822) 758-5717 jj. Morgan estimates Source: Company data.P. Once mass production takes off.P. J.
Sharp is expected to be the major supplier followed by Japan Display and LGD. we expect LGD to increase its M/S similar to Japan Display.JJ Park (822) 758-5717 jj.com Asia Pacific Equity Research 16 June 2012 Figure 7: Quarterly in-cell supply by panel makers Unit shipments in millions 25 20 15 10 5 0 3Q12E 4Q12E LGD 1Q13E Sharp 2Q13E Japan Display 3Q13E 4Q13E Figure 8: Quarterly in-cell supply M/S by panel makers % 100% 80% 60% 40% 20% 0% 3Q12E 4Q12E LGD 1Q13E Sharp 2Q13E Japan Display 3Q13E 4Q13E 32% 29% 36% 29% 37% 29% 36% 29% 37% 29% 37% 37% 31% 35% 34% 35% 34% 34% Source: Company data.P. 8 .P. J.P. we estimate they will account for roughly 20% of total shipments in 2012E. In-cell demand to pick-up in 2013E. Morgan estimates Sensitivity reveals supply to range from 85-101M in 2012E. 207-250M in 2013E Above supply/demand analysis is based on our base case assumption of panel size (4.park@jpmorgan. J.0" and average yield rate 68%/76%). 1Q13E onwards. 27M/126M in 2012E/2013E Assuming next iPhone series adopt in-cell panels. Going into 2013E.P. For 2013E. we forecast in-cell demand to reach 126M units. Depending upon panel size and yield rate variances. Within panel makers. accounting +80% of 2013E iPhone shipments. Figure 9: Quarterly in-cell demand Unit shipments in millions 45 40 35 30 25 20 15 10 5 0 40 29 27 14 3Q12E 4Q12E 1Q13E 2Q13E 3Q13E 4Q13E 28 28 30 Figure 10: Quarterly in-cell supply/demand Unit shipments in millions 70 60 50 40 30 46 27 52 58 60 61 40 28 28 30 61 40 10 7 6 6 20 10 0 3Q12E 4Q12E 1Q13E 2Q13E 3Q13E 4Q13E iPhone w in-cell (new iPhone) Source: Company data. we estimate incell panel demand to climb above 60M once yield rate curve moves up. Given plenty of supply over demand. J. we do not expect in-cell panel demand to cause supply shortage risks. Morgan estimates Quarterly supply to reach 60M after full-scale production We expect panel makers to kick-in full-scale production in late 2Q12E and its quarterly supply to reach +50M by end of 4Q12E. Morgan estimates Source: Company data. in-cell panel supply may vary as large as 11% to our view. J. Morgan estimates iPhone w/o in-cell In-cell Supply In-cell Demand to panel makers (different from end-demand) Source: Company data.
3" 2013 Unit Output Panel Size = 4.0" Panel Size = 4. Figure 11: Quarterly in-cell revenue by panel makers Unit in US$ millions 900 800 700 600 500 400 300 200 100 0 3Q12E 4Q12E LGD 1Q13E Sharp 2Q13E Japan Display 3Q13E 4Q13E Figure 12: Quarterly in-cell total revenue and panel price trend Unit in US$ millions.P. In table 4. As yield rate climbs up on the curve.P. we assess the potential in-cell display panel cost structure and estimate initial ASP to be $48.5”) and in-cell initial price point should not be lower than that.600 1.JJ Park (822) 758-5717 jj. we expect in-cell panel price to show moderate decline of 10% Y/Y in 2013E. Given limited suppliers and better yield rate. per our assessment. and linear increase in other components.800 1. Morgan estimates In-cell total revenue accounts for ~19% of total iPhone COGS On annual basis.200 2. assuming mature yield rate on par with TFT-LCD LTPS.1 billion in 2Q13E.com Asia Pacific Equity Research 16 June 2012 Table 5: Unit outputs sensitivity analysis by panel size and yield rate Panel size in inches. we forecast its proportion to total iPhone COGS to increase to 19% once panel makers begin full-year production.500 3Q12E 4Q12E 1Q13E 2Q13E 3Q13E 4Q13E In-cell revenue Source: Company data.0" Panel Size = 4. J. we foresee Sharp to generate the largest in-cell revenue followed by LGD and Japan Display. we forecast quarterly revenue to reach $2.3" Source: Company data. which accounts 9% of iPhone COGS in 2012E.park@jpmorgan. we estimate total in-cell revenue to be around $2 billion. Panel price is derived from cost saving of glass sensor. Morgan estimates 48 50 46 45 43 42 40 48 46 44 42 40 38 36 Panel Price assumptions Source: Company data.700 1. increasing manufacturing cost. US$ 2.100 2. Yield rate in %. J.000 1. In-cell quarterly total revenue to be around $2 billions On a quarterly basis.900 1. Provided panel is the most expensive single component in smartphone. Morgan estimates Avg Yield Rate = 68% (base) 98 85 Avg Yield Rate = 76% (base) 239 207 Avg Yield Rate = 71% (bull) 101 88 Avg Yield Rate = 79% (bull) 250 216 In-cell ASP and revenue trend Initial In-cell panel ASP to be $48 and decrease 10% Y/Y next year Currently. J. we believe iPhone 4S G/G structure (including TFT array) is around $37 (3. According to unit output base assumptions.P. 9 . panel makers are projected to generate over $4 billion revenue. Unit output in millions 2012 Unit Output Panel Size = 4.
bull Source: Company data.3bn compared to $3. Apple seems to be most suitable brand to adopt the in-cell in near-term.000 500 0 2012E LGD Sharp Japan Display 2013E 1.056 3.000 4. 10 .598 3.000 8.596 2012E In-cell revenue 2013E In-cell % to iPhone COGS Source: Company data.bear Panel Price ($42) . In this case.000 2.000 7. J. US$ million Panel Price ($36) .com Asia Pacific Equity Research 16 June 2012 Figure 13: Annual in-cell revenue by panel makers Unit in US$ millions 3.500 1.000 3.5bn in 2012E/2013E Given uncertainty of our panel price and unit output assumptions.6~4.144 10.8~10.000 6.base Panel Price ($54) . Unit output in millions.298 Figure 14: Annual in-cell total revenue and % out of iPhone COGS Unit in US$ millions.097 2.000 1. J. we illustrated sensitivity analysis to give color on total revenue range.951 9. +50M new iPad series may be candidates for in-cell technology.bull 2013 Revenue.firstname.lastname@example.org Unit (base case) 3. Morgan estimates Source: Company data. Apple has kept singular model policy across different mobile applications and we believe there is a chance that Apple may consider choosing in-cell for other applications if it works well with iPhone. Touch panel players may lose +60% revenue opportunity (assuming no touchpanel supply at all in in-cell panel).000 1.0 billion in non in-cell case.5 billion vs.755 Unit (bull case): +15% 7.8bn in 2012E and $5. and their 2013E revenue from iPad could decline to $1.000 5.759 7.bear Panel Price ($47) .JJ Park (822) 758-5717 jj.base Panel Price ($49) .311 1.515 Unit (bear case): -15% 5.P.144 Unit (bull case): +15% 3.515 4. J.500 3.921 2.3 in non in-cell case.P. US$ million Panel Price ($40) .056 3. we estimate total in-cell revenue to range from $2.951 3.500 2.000 2.188 1. % 9.745 6.135 4. Depending upon panel price and unit output variances. we forecast TFT-LCD players to generate $8.759 7.000 0 19% 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 9% 7. Table 6: Revenue sensitivity analysis by panel price and unit output Panel Price in US$.P.596 4. Morgan estimates Unit (bear case): -15% 2.135 Unit (base case) 6. Revenue in US$ millions 2012 Revenue.516 In-cell technology beyond iPhone Works under high-volume single model brand As we have illustrated in the technology comparison section.5bn in 2013E.8bn / $10. iPad with in-cell can generate +22% more revenue to TFT-LCD Assuming new iPad (to be launched in 2013E) was manufactured with in-cell display. Morgan estimates Total in-cell revenue may go as high as $4.733 2.772 9. $7.
J.P. w/o in-cell Source: Company data. Figure 17: Smartphone Touch Panel market demand Unit in millions.000 2.P. J. which could be positive catalysts for the share price.000 8. it represents over 37% of the tablet PC BOM and 18% of the smartphone BOM according to our estimates.400 1.park@jpmorgan. we pick LGD and Sharp to be key beneficiary names in the panel space.P. Morgan estimates 1.P.290 2.000 4.477 4.431 2011 2012E Panel Source: Company data. Morgan Stock implications LGD and Sharp stand out to us as the winners Given limited supply and strong position with in-cell.926 2013E (w in-cell) Touch 3. As total BOM must be reduced to enable more attractive price points.000 6. J. 11 . we see increasing need of cost reduction efforts. In-cell on Tablet PC panel can theoretically reduce +7% of total BOM. % 1. J. % 160 140 120 100 80 60 40 20 0 58% 61% 59% 70% 60% 50% 40% 30% 20% 10% 0% 2011 iPad shipments 2012E Total Tablet PC shipments 2013E iPad % (RHS) Figure 16: LCD & Touch Panel Revenue opportunity from iPad US$ millions 12. Morgan estimates Source: iSuppli.552 8.000 10.000 0 1. hence we expect panel makers to jump into tablet PC developing in-cell in long-term after firstly touching base on smartphone touch panel. LGD and Sharp seem pretty confident about in-cell adoption and we believe in-cell will create strong top-line and bottomline opportunity.JJ Park (822) 758-5717 jj.282 6.200 1.com Asia Pacific Equity Research 16 June 2012 Figure 15: Apple and market tablet PC shipment Unit in millions.000 800 600 400 200 0 2011 In-cell demand 2012E 2013E 2014E 2015E In-cell demand % Total smartphone touch panel demand Figure 18: (Touch Panel + LCD array) % to total BOM comparison % 21% 17% 13% 3% 0% 25% 20% 15% 10% 5% 0% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 63% 82% 18% Smartphone 37% Tablet PC Source: Company data.934 2013E (w/o in-cell) Panel Sales +22% vs. Morgan estimates Touch panel BOM needs to be reduced Comparing module (TFT-LCD + Touch Panel) costs' burden in touch device's BOM.467 2.
Beginning from mid-2011.000 40. Figure 19: Market Cap trend of TFT-LCD and Touch panel players US$ millions 45. TPK could remain in the supply chain given its superior lamination yield rate.000 35. TMD Losers TPK & Wintek. Lamination is TPK's best strength. both TFT-LCD and Touch panel players' market cap moved inline direction until mid-2010.P.000 20. Touch Panel includes TPK/Wintek/Melfas/Iljin Display/J Touch/ELK TFT-LCD clearly trading on discount to revenue generation Until mid-2009. Moving into 2010.com Asia Pacific Equity Research 16 June 2012 Table 7: Potential beneficiary for in-cell touch panel technology Technology In-cell Winners LGD.000 - TFT-LCD Touch Panel (RHS) Source: Bloomberg. Since TPK's IPO.000 25. Laibo (The need for ITO sensor is eliminated.JJ Park (822) 758-5717 jj.000 8.park@jpmorgan. Sintek. Sharp.000 TPK IPO Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 2.000 15.000 6.000 5. Morgan. all ITO sputtering is made by TPK/Wintek on cover glass) OGS/Touch-on-lens Source: J. 12 . however.000 10.000 30. touch panel market cap began to move up on back of strong Apple supply chain story while TFT-LCD players suffer from deteriorating supply/demand dynamics. TPK Market Cap comparison: TFT-LCD vs. TFT-LCD includes LGD/Sharp/AUO/CMI. touch panel players reverted into showing stiff correction and we witnessed similar market cap trend between two names.000 0 Jan-08 12. Touch panel began trading at higher multiple compared to TFT-LCD on Apple supply chain story and it recorded robust multiple expansion from mid-10 to mid-11. However. both TFT-LCD and Touch panel have witnessed similar market cap to revenue multiple trend and nicely rebounded after financial crisis.000 4.000 10. Touch Panel Touch Panel on boom until mid-2011 since TPK IPO After financial crisis.
Present) X. Morgan estimates * TFT-LCD includes LGD/Sharp/AUO/CMI.JJ Park (822) 758-5717 jj.0 2.000 2.0 2.0 5. each accounting for 5% and 10% of total revenue.0 1. Touch Panel includes TPK/Wintek/Melfas/Iljin Display/J Touch/ELK However.0 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 TFT-LCD Touch Panel Jul-12 Oct-12 Figure 22: Revenue projection of TFT-LCD and Touch Panel Unit in US$ millions.000 500 - Source: Company data. we estimate LGD to generate approximately $1. J.0 6.0 6.3x (Touch panel) as of now. TFT-LCD deserves higher multiple on in-cell opportunity JPM Asia tech team forecasts TFT-LCD players' revenue to continuously increase while Touch panel players witness a shrinking trend.0 0.000 2. Multiple = Market Cap / Revenue 7. Upon increasing revenue trend. % 12. Bloomberg.3/2. 13 . Touch Panel includes TPK/Wintek/Melfas/Iljin Display/J Touch/ELK Implications on LGD Revenue Impact According to our estimates. we believe in-cell panel business to positively contribute to LGD’s operating level. Recent multiple contraction seems market has already priced in risks associated with Touch-panel.0 0.P.000 4. J. TFT-LCD includes LGD/Sharp/AUO/CMI.P. in-cell/on-cell emergence and weak IT demand has dragged down touchpanel’s multiple to similar level of TFT-LCD and they are each trading at 1.0 5.000 0 Jan-11 Jul-11 Jan-12 TFT-LCD Jul-12 Jan-13 Touch Panel (RHS) Jul-13 3.com Asia Pacific Equity Research 16 June 2012 Figure 20: Market Cap to Revenue trend (2008 .0 4. we believe panel makers with a strong position in in-cell technology deserve higher multiple going forward.2x (TFTLCD) and 2.0 3.6 billion in 2012E/2013E. We illustrated revenue impact of in-cell to each players in the below section. Bloomberg. Figure 21: Market Capitalization to Revenue trend (2008~) Multiple (X) 7.0 email@example.com 8.000 6.500 2.000 Mainly due to shrinking TPK top-line 1.0 4. Morgan estimates * TFT-LCD includes LGD/Sharp. Touch Panel includes TPK/Wintek/Melfas/Iljin Display/J Touch/ELK Source: Company data.000 10.0 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 TFT-LCD Jul-10 Jan-11 Touch Panel Jul-11 Jan-12 Source: Company data.0 1. Along with strong top-line growth.500 1.
we think fixed costs are low and risk has therefore been minimized.P. the company recently commented that it will base the timing of the introduction on clients’ needs. we think prices will also be kept low. yield. Morgan estimates 12% 10% 10% 8% 5% 6% 4% 2% 0% 2013E LGD (in-cell) revenue In-cell % out of total revenue Implications to Sharp Recent development from Sharp Sharp announced at end-2011 that it would likely introduce in-cell technology 2013 and not 2012. Detailed margins are not firstname.lastname@example.org 5. 2 itself. % 30. we think Kameyama plant No. Cost impact As the equipment used in Kameyama plant No. the company commented its latest version of IGZO is compatible with in-cell technology and we therefore think panels for tablet PCs could use in-cell technology starting from 2013. we think yield improvements on this line will more easily translate into broader margins.000 10. 14 . we cautiously forecast in-cell to contribute more to total OP than current smartphone display. scheduled to begin full-scale production this summer.000 15. 1 was supplied by a major smartphone maker. which uses IGZO technology. production volume. While we think Kameyama plant No. J. However. is not likely to use in-cell technology. however. However. because Sharp purchased the equipment used in its Kameyama plant No.000 25. 1 (6G LTPS line). or price. based on changes in the tone of management’s comments.com Asia Pacific Equity Research 16 June 2012 Earnings impact Previously we forecasted smartphone display to account for 26% of total LGD's OP in 2012E. However.JJ Park (822) 758-5717 jj. 2. Figure 23: In-cell revenue contribution to LGD’s business Unit in US$ millions.000 0 2012E LGD total revenue Source: Company data. making margins narrower than those on other lines. On the other hand. is likely to produce smartphone panels using in-cell technology. The company has yet to make any comments on production lines.000 20.
Implications for Touch Panel players On the flip side. like Sharp’s Kameyama plant No.000 10. Currently.com Asia Pacific Equity Research 16 June 2012 Figure 24: In-cell revenue contribution to LGD’s business Unit in US$ millions. more than 90% of the design-ins models for touch on NBs are based on OGS given easier conversion costs among different models and ease of manufacturing process.P. 1.000 8. leading touch panel makers could gain market shares through OGS. J.and medium size LCD panel businesses of Sony.000 16. TPK and Wintek) could see negative impact on its revenue and earnings if in-cell gains market acceptance quickly. has been loaned manufacturing equipment (5. Given the technology improvement and the capacity build. In short. % 18. but we believe the market could be overly pessimistic about the leading touch panel makers’ revenue opportunities in other areas like tablet market growth and touch on NB or AIOs. especially if measured in square meters and revenues. 15 . in our view.000 6. The size migration and the better margin would likely give touch panel makers another boost on earnings in 2H12 and 2013.000 14. we believe the touch panel market opportunities are expanding significantly.000 2. We summarize the touch panel market condition by market segment: (1) smartphone market become less attractive for touch panel makers: TFTLCD makers are gaining market shares in smartphone area especially given Apple could potentially switch to in-cell. but technology-laggards and film-based makers continue to lose ground. Hitachi. touch panel makers (i. While information on the company is limited because it is not listed.5G.JJ Park (822) 758-5717 jj. and Toshiba (Toshiba Mobile Display. Most of the second-tier touch panel makers barely make any profits in this market segment. TMD). the margin for smartphones touch panels has become marginal. Morgan estimates Implication to Japan Display Japan Display is an unlisted LCD panel maker formed in 2012 through the integration of the small. Currently.000 12. TMD.email@example.com 0 Sharp LCD revenue 19% 12% 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 2012E Sharp (in-cell) revenue 2013E In-cell % out of total revenue Source: Company data. LTPS) by a major smartphone maker and we thus expect Japan Display to produce smartphone panels using in-cell technology in the TMD plant. we believe the market has discounted the potential losses of iPhone 5 orders from touch panel makers.000 4.e.
and Apple’s market share to be 61%/59% in 2012/2013. (3) NBs and AIOs benefits OGS manufacturers: we estimate the touch on NB would represent 5-7% penetration of total market size of 238 million units in 2013. We also believe there is a great potential that Apple could follow suit by integrating touch into its NB/AIO series of products in the future. OGS seems to be the most practical solution for this market in terms of weights. per our estimate. it could wipe out TPK/Wintek's operating profits by 30-40% for 2012/2013.JJ Park (822) 758-5717 jj. This could be a drag on touch panel makers' valuation multiple since if this happens. Again. per our estimate. We have seen Intel and Microsoft clearly pushing touch panel adoption in the NB market in Computex. but technology and cost hurdles remain to be resolved first. Desktop PC represents another 154/152 million unit market. we believe leading touch panel makers like TPK could still enjoy its industry leadership in the next couple of years. but penetration could be less than 1% in 2012/2013.park@jpmorgan. Of note.com Asia Pacific Equity Research 16 June 2012 (2) tablets market could be a big swing factor: we estimate the market is growing by 54%/ 31% in 2012/2013. We believe eventually touch panel would become an essential part of PCs along with the touch panel prices decline. Hence. We do not rule out the possibility that Apple could adopt in-cell for iPad in the longer term. especially given Intel's agreement with touch panel makers that put touch panel makers at front of the priority in this market segment. and costs (over 90% touch on NB models are OGS-based). one 14” touch panel is nearly twice as large as a 10” tablet in areas. 16 . thickness. and this is a downside risk for touch panel maker like TPK and an opportunity for TFT-LCD makers like LGD and Sharp. hence it could fill up touch panel makers’ capacities quickly. this is Apple’s binary decision.
J.0 3.5 6.0 3.5 1Q12 70% 55% 61% 60% 61% In-cell panel supply by company Unit output based on 4” panel (mn units).5 5.com Asia Pacific Equity Research 16 June 2012 Appendix I: In-cell supply/demand model In-cell capacity and yield rate assumptions by company Quarterly capacity in 000s sqm and yield rate assumption in %.5 5.JJ Park (822) 758-5717 jj.5 6.5 6.5 1Q12 0 0 0 0 0 0 2Q12E 0 0 0 0 0 0 2Q12E NA NA NA NA NA NA 3Q12E 14 17 15 4 10 46 3Q12E 31% 37% 32% 9% 22% 100% 4Q12E 18 19 15 5 11 52 4Q12E 35% 36% 29% 9% 21% 100% 1Q13E 20 21 17 5 12 58 1Q13E 34% 37% 29% 9% 20% 100% 2Q13E 21 22 17 5 12 60 2Q13E 35% 36% 29% 9% 20% 100% 3Q13E 21 23 17 5 12 61 3Q13E 34% 37% 29% 9% 20% 100% 4Q13E 21 23 17 5 12 61 4Q13E 34% 37% 29% 9% 20% 100% 2012E 32 36 30 9 21 98 2012E 33% 36% 30% 9% 21% 100% 2013E 82 88 69 21 48 239 2013E 34% 37% 29% 9% 20% 100% Gen 4.5 5.5 5.5 1Q12 0 0 0 0 0 0 2Q12E 0 0 0 0 0 0 2Q12E 73% 58% 64% 63% 64% 3Q12E 113 177 136 41 95 425 3Q12E 75% 60% 67% 66% 67% 66% 4Q12E 136 177 136 41 95 448 4Q12E 78% 65% 70% 69% 70% 70% 1Q13E 145 177 136 41 95 458 1Q13E 80% 70% 73% 72% 73% 74% 2Q13E 153 177 136 41 95 466 2Q13E 80% 72% 76% 75% 76% 76% 3Q13E 153 177 136 41 95 466 3Q13E 80% 75% 76% 75% 76% 77% 4Q13E 153 177 136 41 95 466 4Q13E 80% 75% 76% 75% 76% 77% 2012E 62 88 68 20 47 218 2012E 77% 63% 68% 68% 69% 68% 2013E 151 177 136 41 95 464 2013E 80% 73% 75% 74% 75% 76% Gen 4. Based on Base case scenario Adjusted Quarterly capacity (K sqm) LGD AP2 LTPS Sharp Kameyama line Japan Display Ex-Sony Ex-TMD D2 Total Yield rate assumptions (%) LGD AP2 LTPS Sharp Kameyama line Japan Display Ex-Sony Ex-TMD D2 Average Source: Company data.5 6.P. M/S (%).park@jpmorgan. Morgan estimates Gen 4. Based on Base case scenario Unit output LGD Sharp Japan Display Ex-Sony Ex-TMD Total supply M/S by unit output (%) LGD Sharp Japan Display Ex-Sony Ex-TMD D2 Total Source: Company data.0 3.0 3.5 1Q12 NA NA NA NA NA NA 17 . Morgan estimates Gen 4. J.P.
745 48 4Q12E 643 662 544 162 382 1. J.298 685 1.JJ Park (822) 758-5717 jj.311 1.0 3.park@jpmorgan.P.094 42 4Q13E 692 749 580 173 407 2.097 327 770 3.596 47 2013E 2.733 2.020 40 2012E 1.188 1.5 1Q12 NA NA NA NA NA NA 2Q12E NA NA NA NA NA NA 3Q12E 544 649 553 165 388 1.951 42 18 .934 43 3Q13E 717 776 601 179 421 2. Morgan estimates Gen 4.5 5.5 6.612 7. Panel Price in US$.921 2. Based on Base case scenario Revenue LGD Sharp Japan Display Ex-Sony Ex-TMD Total Panel Price assumptions Source: Company data.850 46 1Q13E 653 696 554 165 389 1.com Asia Pacific Equity Research 16 June 2012 In-cell panel revenue by company Unit in $ millions.903 45 2Q13E 672 699 563 168 395 1.
Company-Specific Disclosures: Important disclosures.T/¥412/Overweight). and the services provided were non-investment-banking. TPK Holding Co. Sharp (6753). Client/Investment Banking: J. Ltd. the research analyst denoted by an “AC” on the cover or within the document individually certifies. where multiple research analysts are primarily responsible for this report. or emailing research.. are available for compendium reports and all J.P. Ltd. (3673.P.. Morgan currently has.jpmorgan.. with respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views expressed in this report accurately reflect his or her personal views about any and all of the subject securities or issuers. the following company(ies) as clients. or had within the past 12 months. Client: J.. Morgan– covered companies by visiting https://mm. Morgan acted as lead or co-manager in a public offering of equity and/or debt securities for TPK Holding Co.. Non-Investment Banking Compensation: J.KS/W22300/Overweight). Morgan Securities (Far East) Ltd. Ltd. Sharp (6753). Important Disclosures Lead or Co-manager: J.P. Client/Non-Investment Banking. or intends to seek.P. Ltd. TPK Holding Co.P. J. Morgan currently has. the following company(ies) as clients: LG Display.. securities-related: LG Display. or had within the past 12 months.com with your request. TPK Holding Co.50/Overweight) Analyst Certification: The research analyst(s) denoted by an “AC” on the cover of this report certifies (or. Ltd.. the following company(ies) as investment banking clients: Sharp (6753). Investment Banking (next 3 months): J.. 19 .JJ Park (822) 758-5717 jj. Morgan currently has. TPK Holding Co... and the services provided were non-securities-related: Sharp (6753).P.disclosure. TPK Holding Co.P. Securities-Related: J..park@jpmorgan. within the past 12 months. including price charts.P.com/disclosures/company.inquiries@jpmorgan... Ltd.P.. Morgan received in the past 12 months compensation for investment banking Sharp (6753). TPK Holding Co. or had within the past 12 months. compensation for investment banking services in the next three months from Sharp (6753). Morgan currently has. Client/Non-Securities-Related: J. Seoul branch is acting as a Market Maker (Liquidity Provider) for the Equity Linked Warrants of LG Display and owns 18. Sharp (6753).. TPK Holding Co. Morgan has received compensation in the past 12 months for products or services other than investment banking from LG Display. Sharp (6753) (6753. Ltd. Ltd. Investment Banking (past 12 months): J.538.460 as of 15-Jun-12.com Asia Pacific Equity Research 16 June 2012 Companies Recommended in This Report (all prices in this report as of market close on 15 June 2012) LG Display (034220. and (2) no part of any of the research analyst's compensation was.P. Ltd. or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report. calling 1-800-477-0406. TPK Holding Co. or had within the past 12 months.TW/NT$454. the following company(ies) as clients.. Morgan expects to receive. is.
000 W40.850 Y1.370 OW W40. Morgan.000N W36.984 N Y1.400 OW OW Price(Y) N Y1. Initiated coverage Oct 11.050 Y550 Y650 N UW UW N Y1.992 15-Dec-08 N 03-Feb-09 15-Jul-09 03-Aug-09 14-Oct-09 17-Nov-09 21-Sep-10 06-Jun-11 14-Sep-11 16-Nov-11 12-Jan-12 02-Feb-12 24-Apr-12 1. price data adjusted for stock splits and dividends.T.000 Rating Share Price (W) OW OW OW OW OW OW N N N N N OW OW OW OW OW OW OW OW OW OW OW 30400 32400 39600 42700 45000 49250 37600 32900 29600 20850 31450 31350 34800 30000 41350 41700 45450 37250 38550 34850 29550 30250 19150 28550 Price Target (W) 40000 45000 50000 56000 60000 70000 60000 36000 31000 24000 28000 31000 36000 40000 53000 55000 60000 55000 52000 50000 45000 42000 32000 36000 Price Target (Y) 2120 2550 2400 2000 1850 1500 1250 1050 750 610 550 650 770 900 1050 1250 750 690 700 900 850 700 650 10-Apr-07 03-Jul-07 10-Oct-07 31-Oct-07 03-Jul-08 10-Jul-08 20-Aug-08 17-Apr-09 10-Jun-09 17-Jul-09 12-Nov-09 06-Jan-10 01-Apr-10 23-Apr-10 17-Sep-10 13-Jan-11 28-Mar-11 01-Jul-11 22-Jul-11 13-Sep-11 28-Jan-12 Date 04-Oct-06 22-May-07 OW 02-Dec-08 N Source: Bloomberg and J. price data adjusted for stock splits and dividends.000 N W31.P.000 67. Initiated coverage Oct 04. Morgan.000 OW W60.422 26.JJ Park (822) 758-5717 jj.000 OW W70.firstname.lastname@example.org 0 Oct 06 Jul 07 Apr 08 Jan 09 Oct 09 Jul 10 Apr 11 Jan 12 N W31.000 N Y1.KS.000 OW 53.000OW W60.com Asia Pacific Equity Research 16 June 2012 Date 11-Oct-06 LG Display (034220.000 N W24. 2006.250 Y750 N UW 1.000 OW W55.656 N Y2.000 N W36.000 OW OW W50. 2006.000 80.948 13.328 664 0 Sep 06 Jun 07 Mar 08 Dec 08 Sep 09 Jun 10 Mar 11 Dec 11 01-May-10 N Source: Bloomberg and J.844 OW W50. Rating Share Price (Y) N OW OW N N N N N N UW UW UW UW N UW UW N OW OW OW OW 2025 2185 2175 1850 1797 1577 1290 1003 687 599 662 889 1087 1018 1009 1226 867 738 595 698 643 656 509 Sharp (6753) (6753.120Y2.000 OW W45. 6753 JT) Price Chart 09-Mar-07 26-Jul-07 23-Oct-07 28-Apr-08 22-Jul-08 05-Sep-08 07-Oct-08 04-Nov-08 3.000 OW W42.000OW W52. 034220 KS) Price Chart 94.550Y2.000 OW W32.000 OW W55.000 OW W45.000 N W28.000 W53.320 N Y2.250 N Y610 UW Y900 OW Y850 3.050 Y1. 20 .000 OW OW W60.318 OW W56.000 W36.P.896 Price(W) 40.500 N Y750 UW Y770 OW Y900 Y650 OW UW Y690 OW Y700 N Y700 2.
00 581.com.00 492 246 0 Oct 10 Jan 11 May 11 Aug 11 Dec 11 Apr 12 Source: Bloomberg and J.T). (3474.00 700. Toshiba (6502) (6502. JJ: LG Display (034220. Morgan Equity Research Ratings Distribution. 2011. the current analysts may or may not have covered it over the entire period.T).230 OW NT$800 OW NT$1.T).00 800.TW).P. Epistar Corporation (2448. Sony (6758) (6758.TW).TW).P.T). Everlight Electronics Co. Nissin Electric (6641) (6641. not to those analysts’ coverage universe.00 Price Target (NT$) 1200. TPK Holding Co. Morgan uses the following rating system: Overweight [Over the next six to twelve months. Fuji Electric (6504) (6504. N= Neutral.. For purposes only of FINRA/NYSE ratings distribution rules.T). J. Morgan’s research website.KS). Samsung Electronics (005930. Inc.TW)..OS).] Neutral [Over the next six to twelve months. each stock’s expected total return is compared to the expected total return of a benchmark country market index.T). we expect this stock will perform in line with the average total return of the stocks in the analyst's (or the analyst's team's) coverage universe.T).200 OW NT$500 OW NT$700 984 Price(NT$) 738 Date 04-Jun-11 11-Aug-11 28-Oct-11 22-Feb-12 26-Apr-12 Rating Share Price (NT$) OW OW OW OW OW 936. Taiwan Surface Mounting Technology (6278.KS) Chang.. the certifying analyst’s coverage universe can be found on J. SK Hynix (000660. our Overweight rating falls into a buy rating category.JJ Park (822) 758-5717 jj.00 1000.] Underweight [Over the next six to twelve months. Coverage Universe: Park. we expect this stock will outperform the average total return of the stocks in the analyst's (or the analyst's team's) coverage universe. Wintek Corporation (2384. (8069. Narci: AU Optronics (2409.00 719. Sharp (6753) (6753.com Asia Pacific Equity Research 16 June 2012 TPK Holding Co. NEC (6701) (6701.P.476 1. 2012 J. Hitachi (6501) (6501. and our Underweight rating falls into a sell rating category. Morgan. Fujitsu (6702) (6702.P.00 490.morganmarkets.00 500.00 385. Morgan's continuing coverage of the stocks. Initiated coverage Jun 04. 21 . Chimei Innolux Corporation (3481. we expect this stock will underperform the average total return of the stocks in the analyst's (or the analyst's team's) coverage universe.T). (3673. E Ink Holdings Inc. price data adjusted for stock splits and dividends.P.KS). Mitsubishi Electric (6503) (6503.000 OW NT$1. Nanya Technology Corporation (2408. Panasonic (6752) (6752.P.park@jpmorgan.P.T) J. (2393.TW) Izumi.T).TW).TW). Ltd.TWO). as of April 3. Ltd. 3673 TT) Price Chart 1. UW = Underweight Explanation of Equity Research Ratings and Analyst(s) Coverage Universe: J. The chart(s) show J.TW). Ltd. LG Electronics (066570.TW.and mid-cap equity research.] In our Asia (ex-Australia) and UK small. Inotera Memories. (3673. Oki Electric Industry (6703) (6703.T). Morgan ratings: OW = Overweight. If it does not appear in the Important Disclosures section of this report. www. Omron (6645) (6645. Yoshiharu: Anritsu (6754) (6754.T).KS). Morgan Global Equity Research Coverage IB clients* JPMS Equity Research Coverage IB clients* Overweight (buy) 45% 51% 43% 70% Neutral (hold) 43% 45% 48% 61% Underweight (sell) 12% 34% 9% 53% *Percentage of investment banking clients in each rating category. Renesas Electronics (6723) (6723.T). our Neutral rating falls into a hold rating category.TW).
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An updated list can be found on HKEx website: http://www. will be receiving a brokerage fee and consumption tax (shouhizei) calculated by multiplying the executed price by the commission rate which was individually agreed between JPMorgan Securities Japan Co. not for sale. a prospectus. The information contained herein is under no circumstances to be construed as investment advice in any province or territory of Canada and is not tailored to the needs of the recipient. JPMSAL does not issue or distribute this material to members of "the public" as determined in accordance with section 3 of the Securities Act 1978. The recipient of this material must not distribute it to any third party or outside New Zealand without the prior written consent of JPMSAL. and under no circumstances is to be construed as. objectives. Copyright 2012 JPMorgan Chase & Co. Dubai: This report has been issued to persons regarded as professional clients as defined under the DFSA rules.com. an advertisement. 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The recipient of this report must make its own independent decisions regarding any securities or financial instruments mentioned herein. unless otherwise stated.P. Singapore: JPMSS and/or its affiliates may have a holding in any of the securities discussed in this report. Type II Financial Instruments Firms Association and Japan Securities Investment Advisers Association.hkex. or its affiliates and/or subsidiaries (collectively J.. alternatively. India: For private circulation only. pursuant to an exemption from the dealer registration requirement in the relevant province or territory of Canada in which such offer or sale is made. financial instruments or strategies to particular clients. Japan: There is a risk that a loss may occur due to a change in the price of the shares in the case of share trading.P. This report or any portion hereof may not be reprinted. To the extent that the information contained herein references securities of an issuer incorporated.com Asia Pacific Equity Research 16 June 2012 contracts and stock options listed on the Stock Exchange of Hong Kong Limited. General: Additional information is available upon request.P. All pricing is as of the close of market for the securities discussed. Canada: The information contained herein is not. No securities commission or similar regulatory authority in Canada has reviewed or in any way passed judgment upon these materials..P. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. the specific holding is disclosed in the Important Disclosures section above.. Kanto Local Finance Bureau (kinsho) No. Morgan subsidiary or affiliate in their home jurisdiction unless governing law permits otherwise. sold or redistributed without the written consent of J. Ltd.
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