20220112-招银国际-卓胜微-300782.SZ-Long-term_positive_outlook_unchanged_despite_short_term_fluctuation_6页_1mb

Maxscend (300782 CH) Company Update Summary

Core Content

Maxscend (300782 CH) has reported its FY21 preliminary results, showing strong net profit growth of 91-101% YoY to RMB2.05bn-2.157bn, with 4Q21 net profit expected to reach RMB576mn, representing 62% YoY and 12% QoQ growth. Excluding a one-time gain of RMB196mn, FY21 adjusted net profit is projected at RMB1.87bn, a 81% YoY increase, and 4Q21 adjusted net profit at RMB361mn, a 9% YoY increase but a 30% QoQ decline.

The company delivered a quality performance in FY21 despite challenging macroeconomic conditions and the ongoing impact of the pandemic. The analysts maintain their BUY rating with a target price of RMB450.0, which represents a 42% upside from the current price.

Key Financial Highlights

Earnings Summary (YE 31 Dec)

Share Performance

Main Viewpoints

• Long-term positive outlook remains unchanged: Despite short-term volatility, the analysts are confident in Maxscend's long-term growth prospects.
• 4Q21 performance: The company's 4Q21 net profit is expected to grow 62% YoY and 12% QoQ, but adjusted net profit is likely to decline 30% QoQ due to one-time gains.
• Valuation: Maxscend is currently trading 1-SD below its historical P/E, which is seen as attractive given its leading position in the RFFE market, broad product offerings, and transition to a fab-lite model.
• Catalysts for FY22E: Favorable product mix, new receiver/transmitter modules, and progress in a new manufacturing plant are key growth drivers.
• Risks: Potential risks include slower-than-expected R&D progress, intensified competition, and worsened macroeconomic conditions or trade tensions.

Key Information

• Target Price: RMB450.0, based on 50x FY22E P/E.
• Investment Strategy: The company continues to invest heavily in R&D to develop future products.
• Market Position: Maxscend holds a leading position in the RFFE market and has a broad range of in-house designed products.
• Manufacturing Transition: The company is transitioning to a fab-lite model to secure production capacity and enhance its technological capabilities.
• Shareholding Structure:
  • WX HUIZHI UNITED INVENT: 12.8%
  • Feng Chenhui: 7.87%
  • Tang Zhuang: 7.67%

Financial Forecasts

P&L Forecast

Balance Sheet

Analyst Ratings

• BUY: For stocks with potential return of over 15% over the next 12 months.
• HOLD: For stocks with potential return of +15% to -10% over the next 12 months.
• UNDERPERFORM: For stocks with potential loss of over 10% over the next 12 months.

Conclusion

Maxscend is viewed as a quality semi-fabless company with a strong long-term outlook. The analysts believe the recent stock weakness presents an attractive opportunity for investors to gain exposure to a company poised to benefit from strategic trends in the technology sector. The company's transition to a fab-lite model and its broad product portfolio are key strengths, supporting its growth potential. However, potential risks include R&D delays, increased competition, and macroeconomic uncertainties.