20220223-招银国际-卓胜微-300782.SZ-Mixed_results_for_2021__New_products_and_filter_production_are_in_focus_for_2022_5页_1mb

Maxscend (300782 CH) Company Update Summary

Core Content

Maxscend, a Chinese company operating in the RFFE (Radio Frequency Front-End) market, reported its FY21 preliminary results, showing strong revenue and net profit growth, though slightly below consensus expectations. The company is focusing on new product development and filter production for FY22, aiming to improve profitability and expand its market share.

Key Financial Highlights

FY21 Performance

• Revenue: RMB4,636 million, up 66.1% YoY
• Net Profit: RMB2,139 million, up 99.4% YoY
• 4Q21 Revenue: RMB1,153 million, up 2.6% QoQ and 40.6% YoY
• 4Q21 Net Profit: RMB612 million, up 19.3% QoQ and 72.2% YoY

FY22 Forecasts (Revised)

• Revenue: RMB6,299 million, down 9% YoY from previous estimates
• Net Profit: RMB2,724 million, down 8% YoY
• Target Price (TP): RMB415.0, down from RMB450.0
• Upside Potential: +70% from current price (RMB244.21)

Financial Metrics

• Gross Margin: 57.1% in FY21, expected to decrease to 55.5% in FY22
• Operating Margin: 48.0% in FY21, expected to decrease to 46.9% in FY22
• Net Margin: 46.1% in FY21, expected to decrease to 43.2% in FY22
• EPS (Diluted): RMB6.52 in FY21, expected to be RMB8.30 in FY22

Strategic Focus for FY2022

• New Products: The company is focusing on the development and launch of new products.
• Filter Production: Expansion into filter production is a key growth area.
• Manufacturing Plant: The new plant is in pilot production; performance and yield will be closely monitored.
• Product Mix: Improved profitability is expected from a favorable product mix, particularly in the Android OEM segment.

Valuation and Investment Outlook

• P/E Ratio: 6.30x for FY21, with a 50x P/E for FY22E.
• Valuation: Currently trading at 1-SD below historical P/E, considered attractive due to:
  1. Leading position in China's RFFE market
  2. Broad in-house designed product offerings
  3. Transition to a fab-lite model for production control and capacity security
• Ratings: Maintain BUY rating with a new TP of RMB415.0.

Risks and Upsides

Risks

• R&D Delays: Slower progress in R&D and commercialization of new products
• Intensified Competition: Increased competition could erode both revenue and profit
• Macro Environment: Further deterioration in the macroeconomic environment may affect performance

Upsides

• M&A Opportunities: Potential for strategic acquisitions to drive growth

Shareholder and Market Data

• Market Cap: RMB81.459 million
• Avg 3 Mths Turnover: RMB1,136 million
• 52-Week High/Low: RMB544.68 / RMB238.25
• Total Issued Shares: 333.6 million
• Shareholding Structure:
  • WX HUIZHI UNITED INV ENT: 12.8%
  • Feng Chenhui: 7.87%
  • Tang Zhuang: 7.67%

Share Performance

• 1-Month Return: -7.0%
• 3-Month Return: -16.6%
• 6-Month Return: -40.2%

Balance Sheet and Cash Flow

• Total Assets: Expected to grow from RMB5,004 million in FY21 to RMB10,824 million in FY23
• Total Liabilities: Expected to increase from RMB410 million in FY21 to RMB914 million in FY23
• Net Cash from Operating Activities: Expected to be RMB2,919 million in FY22 and RMB2,372 million in FY23
• Net Change in Cash: Expected to be RMB1,732 million in FY22 and RMB790 million in FY23

Key Ratios

• Growth:
  • Revenue: 66.1% YoY
  • Gross Profit: 79.4% YoY
  • Operating Profit: 82.6% YoY
  • Net Profit: 99.4% YoY
• Profitability:
  • Gross Margin: 57.1%
  • Operating Margin: 48.0%
  • Net Profit Margin: 46.1%
• Balance Sheet:
  • Current Ratio: 9.5x in FY21, expected to decrease to 7.6x in FY22
  • Inventory Turnover Days: 146 days
  • Payable Turnover Days: 37 days
• ROE: 46.5% in FY21, expected to decrease to 39.4% in FY22

Analysts and Contact

• Analysts: Lily Yang, Ph.D., Alex Ng, Lana Lin
• Contact Information:
  • Lily Yang: (852) 3916 3716 / lilyyang@cmbi.com.hk
  • Alex Ng: (852) 3900 0881 / alexng@cmbi.com.hk
  • Lana Lin: (852) 3761 8912 / lanalin@cmbi.com.hk

Disclaimer

• The report is for informational purposes only and not intended as investment advice.
• CMBIS does not guarantee the accuracy or completeness of the information.
• The information is based on publicly available data and may be subject to change.
• CMBIS may have conflicts of interest and is not liable for any losses incurred from reliance on this report.