Chardan Sees Himax (HIMX) Q4 Results Flat with Pre-Announcement; Guide-Down for Q1 Expected

Chardan Capital is negative on Himax Technologies (Nasdaq: HIMX) ahead of the company's Q4 report. The firm reiterates its Sell rating and $5 price target on Himax.

Analyst Jay Srivatsa sees Himax reporting Q4 results in-line with its pre-announcement last month. The analyst also noted, On the conference call, we expect the company to provide an update on the strength of the smartphone and 4K TV markets. Most importantly, we believe investors would be looking for clarity from the company on the LCoS ramp in 2015. With Google Glass version 1 having been discontinued, we would be looking for update from the company on other customers, specifically Microsoft, who may be in various stages of launching head mount displays using HIMX’s LCoS microdisplays.

Srivatsa also notes that the following key points could lead to a guide lower for Q1:

1. Novatek beat its Q4:14 guidance but guided for 13-15% sequential revenue revenue decline for Q1:15.
2. Mediatek (2484.TW-NR) guided for 10 - 18% sequential revenue decline for Q1:15.
3. Both AU Optronics and Innolux are projecting declining shipments in large panels due to shortages and weak demand with small and medium panels shipments set to decline by double digits in Q1:15. We note that Innolux and AUO account for ~45% and ~10% of HIMX revenues respectively.
4. Samsung Electronics woes continue in China as it gave up its No. 1 position in China to Xiaomi and now appears to be getting weaker in India as well. The company recently revealed that it is cutting back the number of models by 25-30% in 2015. As such, we expect HIMX to guide to down 10% in revenues

For an analyst ratings summary and ratings history on Himax Technologies click here. For more ratings news on Himax Technologies click here.

Himax Technologies closed at $7.91 yesterday.

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