Edison Issues ADR Update on Thin Film Electronics (TFECY)

LONDON, August 18, 2016 /PRNewswire/ --

During Q216 Thin Film Electronics (Thinfilm) continued to build on the list of top brands looking to incorporate its NFC tags into their products. New partners include craft beer seller Hopsy, an Italian luxury bag producer and a Fortune 500 pharma producer. Helped by a trial product order for medical devices for the latter, Thinfilm reported 25% y-o-y sales revenue growth in Q2. For us, the one area of disappointment was that the growth in partnerships has not yet translated into volume orders capable of filling the expanded capacity of the plant (fab). Does it matter? Most probably not - the prize for investors is what happens from 2018 onwards. Here we believe that our forecasts could significantly understate earnings, especially if Thinfilm can leverage its expanded salesforce and reduced price points, enabled by low R2R manufacturing costs, into a major slice of the burgeoning NFC market.

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Thinfilm ADRs have outperformed the NASDAQ Composite by 18% over the last year, helped by positive newsflow from major customer signings and increased focus globally on NFC products. Our DCF valuation has remained broadly unchanged at $9.07 (previously $9.06) per ADR following revisions to our forecasts and currency moves.

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About Edison: Edison is an international equity research firm with a team of over 110 analysts, investment and roadshow professionals and works with both large and smaller capitalised companies, blue chip institutional investors, wealth managers, private equity and corporate finance houses to support their capital markets activity. Edison provides services to more than 420 retained corporate and investor clients from offices in London, New York, Frankfurt, Sydney and Wellington. Edison is authorised and regulated by the Financial Conduct Authority.

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

For more information please contact:
Anna Bossong                    
Edison Investment Research        
+44(0)20-3077-5737

Katherine Thompson
Edison Investment Research
+44(0)20-3077-5730
[email protected]

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SOURCE Edison Investment Research

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