IQE’s final results last week highlighted the increased diversification within the business. Well documented weakness in the smartphone market resulted in a contraction in Wireless revenue. In previous years this would likely have resulted in the group missing expectations but increased diversification allowed it to make up for the shortfall elsewhere. Group revenue grew 2% to £114.0m (N+1Se: £117.8m) with adjusted operating profit growing 8% to £19.0m (N+1Se: £19.2m). We make no material changes to our FY’16 and FY’17 forecasts and introduce FY’18 forecasts showing 18% EPS growth. The shares trade on just 7.4x FY’17 PER but we believe there are multiple catalysts to drive a re-rating. We retain our 29p TP (10x FY’16 PER), Buy.