【行业研究报告】卓胜微-Long-term positive outlook unchanged despite short term fluctuation

Maxscend(300782CH)announcedFY21preliminaryresults.FY21netprofitis
expectedtogrow91-101%YoYtoRMB2.05bn-2.157bn,implying4Q21netprofit
ofRMB576mnwith62%YoYand12%QoQgrowth.Mid-pointofFY21earnings
is2%/1%aboveconsensus/ourforecasts.Excludingone-timegainof
RMB196mn,FY21adjustednetprofitwillbeRMB1.87bn,+81%YoY,and4Q21
adjustednetprofitwillbeRMB361mn,+9%YoY/-30%QoQ.ReiterateBUY.
CompanydeliveredaqualityearningtocloseFY21despitetoughmacro
environmentandextendedCOVIDoutbreak.Wenoticedthat4Qadj.NP
environmentandextendedCOVIDoutbreak.Wenoticedthat4Qadj.NP
woulddecline30%QoQifexcludingone-timegain.Ourview:1)Q4is
normallyrelativelyweakcomparingtoQ3forseminames;2)thecompany
continuestoinvestheavilyinR&Dforfutureproducts,3)higherone-timeloss
duetohighinventory(AndroidphonesfacedintensecompetitionfromApple)
and4)constrainedfiltercapacitylimitedcompany’ssales.Lookingforward,
wemayseeanotherQoQdeclinein1Q22E,considering1Q21highbasedue
tobuild-upinventorybyOEMsduringchipshortage.
Inlongerterm,weremainpositiveonMaxscend.ForFY22E,catalystsfor
thestockinclude:1)favorableproductmixasmodulerevenuewillcontinue
growthwithopportunitiesintopAndroidOEMs;2)launchofnew
receiver/transmittermodules;3)progressinnewmanufacturingplant:
ongoingpilotproductionandinitiationofsmallbatchproductionlaterthisyear.
MaintainBUYwithTPofRMB450.0.OurTPisbasedon50xFY22EP/E.
Maxscendiscurrentlytrading1-SDbelowhistoricalP/E.Webelievethisvaluation
isattractivegiven1)itsleadingpositioninChina’sRFFEmarket,2)broadin-house
designedproductofferings,and3)transitingintofab-litemodeltosecure
productioncapacityandtakefullcontrolofitsmanufacturingprocess.Weview
recentweaknessinstockasanattractiveopportunityforinvestorstogain
exposuretoqualityChineseseminamesthatcanridestrategictrends.
Potentialrisksinclude1)slower-than-expectedR&Dprogressandcommercial
launchofnewproducts,2)intensifiedcompetitionthaterodebothtopandbottom
linesand3)furtherdeterioratedMarcoenvironment.