Razer (1337 HK) Company Update Summary
Core Content Overview
This document provides an equity research update on Razer, a company listed on the Hong Kong Stock Exchange. The main focus is on the proposed privatization, financial performance, and key metrics.
Proposed Privatization Update
- Status: On 21 Feb 2022, Razer announced that the pre-conditions for the proposed privatization have been fulfilled.
- Completion Probability: The research firm believes the deal is highly likely to complete, considering the current macroeconomic environment and weaker expectations in the peripheral market.
- Conditions: The privatization is now subject to the satisfaction of certain conditions.
- Shareholder Vote: The next milestone is to secure the shareholders' vote.
- Target Price (TP): Adjusted to the proposed privatization price of HK$2.82, reflecting a +11.0% upside from the current price of HK$2.54.
- Rating Change: Downgraded to HOLD due to limited upside potential.
Financial Summary
Earnings Summary
| Metric |
FY19A |
FY20A |
FY21E |
FY22E |
FY23E |
| Revenue (US$ mn) |
820.8 |
1,214.6 |
1,576.8 |
1,947.0 |
2,254.9 |
| YoY growth (%) |
15.2% |
48.0% |
29.8% |
23.5% |
15.8% |
| Gross margin (%) |
20.5% |
22.3% |
25.2% |
27.5% |
28.0% |
| EBITDA (US$ mn) |
-71.7 |
16.1 |
74.5 |
139.8 |
188.2 |
| Net profit (US$ mn) |
-84.2 |
5.6 |
50.4 |
99.9 |
138.6 |
| Net profit margin (%) |
-10.3% |
0.5% |
3.2% |
5.1% |
6.1% |
| EPS (US$) |
-0.010 |
0.001 |
0.006 |
0.011 |
0.016 |
| EV/EBITDA (x) |
-37.9 |
168.6 |
36.5 |
19.4 |
14.4 |
Cash Flow Summary
| Metric |
FY19A |
FY20A |
FY21E |
FY22E |
FY23E |
| Net cash from operating |
-38 |
153 |
134 |
163 |
245 |
| Net cash from investing |
-10 |
-171 |
-69 |
-50 |
-63 |
| Net cash from financing |
-38 |
-3 |
-52 |
-39 |
-28 |
| Net change in cash |
-86 |
-21 |
14 |
74 |
154 |
Balance Sheet
| Metric |
FY19A |
FY20A |
FY21E |
FY22E |
FY23E |
| Total assets (US$ mn) |
995 |
1,243 |
1,341 |
1,514 |
1,760 |
| Total liabilities (US$ mn) |
420 |
636 |
715 |
784 |
883 |
| Total equity (US$ mn) |
575 |
607 |
626 |
730 |
877 |
Key Ratios
| Metric |
FY19A |
FY20A |
FY21E |
FY22E |
FY23E |
| Revenue by segment |
821 |
1,215 |
1,577 |
1,947 |
2,255 |
| Revenue growth (%) |
15.2% |
48.0% |
29.8% |
23.5% |
15.8% |
| Gross margin (%) |
20.5% |
22.3% |
25.2% |
27.5% |
28.0% |
| Net profit margin (%) |
-10.3% |
0.5% |
3.2% |
5.1% |
6.1% |
| ROE (%) |
-14.6% |
0.9% |
8.0% |
13.7% |
15.8% |
| Net debt/total equity (%) |
-89.5% |
-82.0% |
-79.0% |
-78.0% |
-82.5% |
| ROA (%) |
-8.5% |
0.5% |
3.8% |
6.6% |
7.9% |
| BVPS (US$) |
0.066 |
0.066 |
0.069 |
0.080 |
0.096 |
Share Performance
| Period |
Absolute Return (%) |
Relative Return (%) |
| 1-month |
6.4% |
9.1% |
| 3-months |
-11.7% |
-9.0% |
| 6-months |
42.0% |
45.1% |
Shareholding Structure
| Shareholder |
Percentage |
| Chen Family Hivemind Holdings |
32.4% |
| Voyager Equity |
15.33% |
| Primerose Ventures |
3.77% |
Stock Data
| Metric |
Value |
| Market Cap (HK$ mn) |
22,250 |
| Total Issued Shares (mn) |
8,759.8 |
Analyst Certification & Disclaimers
- The research analyst certifies that the views expressed in the report accurately reflect their personal views.
- No part of the analyst's compensation is directly or indirectly related to the views expressed.
- The analyst confirms no trading or dealing in the stock covered in the report within 30 days prior to the report's issue.
- The report is not an offer or solicitation to buy or sell any security.
- CMBIS does not provide individually tailored investment advice.
- Past performance does not guarantee future results.
- The information is for the use of intended recipients only and may not be reproduced or distributed without prior consent.
CMBIS Ratings
- BUY: Potential return of over 15% over next 12 months.
- HOLD: Potential return of +11% to -10% over next 12 months.
- SELL: Potential loss of over 10% over next 12 months.
- NOT RATED: Not rated by CMBIS.
- OUTPERFORM: Industry expected to outperform the relevant broad market benchmark.
- MARKET-PERFORM: Industry expected to perform in-line with the relevant broad market benchmark.
- UNDERPERFORM: Industry expected to underperform the relevant broad market benchmark.
Legal & Regulatory Disclosures
- The report is prepared for the use of intended recipients only.
- CMBIS is not a registered broker-dealer in the United States.
- The report may not be provided to persons outside the defined categories in the UK and US.
- CMBIS is not liable for any loss, damage, or expense incurred from reliance on the information in the report.
- Recipients are advised to consult with a professional financial advisor for investment decisions.
