Han's Laser Shares Attractive as 2023 Uncertainties Are Priced In; FVE Lowered to CNY 36

We have cut our fair value estimate for Han’s Laser to CNY 36 from CNY 44, corresponding to 20 times 2023 price/earnings, after reducing our 2022-26 earnings forecasts. This is a result of more conservative expectations for consumer electronics and printed circuit board, or PCB, equipment. The shares plunged 5% on Oct. 25 during China trading hours, but we still view Han’s Laser as undervalued for its prospects in electric vehicle batteries, semiconductors, and green energy. We foresee adoption of a titanium body on the iPhone 15 Ultra and potential approval of the semiconductor packaging subsidiary IPO to be the stock’s upside catalysts.