Non-Acoustics will be the Main Driver in FY17, Buy 非声学产品将成为 2017 财年的主要驱动力, 买入

Transcription

1 (2618 HK)(2618 HK) 派集团 (2618 HK) GTJA Research 国泰君安研究 Company Report: AAC Tech (218 HK) Ricky Lai 黎柏坚 公司报告 : 瑞声科技 (218 HK) ricky.lai@gtjas.com.hk Non-Acoustics will be the Main Driver in FY17, Buy 非声学产品将成为 217 财年的主要驱动力, 买入 3Q16 results were better than market expectation by 6.% and in line with our expectation. AAC recorded 29.3% yoy growth in net profit, driven by specifications upgrades with the launch of a number of flagship smartphone models by top smartphone providers. We raise FY16-FY18 haptics & RF revenue by 2.7%/ 3.9%/ 4.5%, respectively, due to stronger contributions from Chinese smartphone providers. The non-acoustic components revenue is expected to surpass acoustic components revenue in FY17 thanks to higher contributions from RF mechanical solutions with improvements in production capacity. We expect FY16-FY18 dynamic components revenue to grow by 24.4%/ 11.%/ 14.1%, respectively. The growth rate of dynamic components revenue is supported by Android customers adoption of higher grade speaker boxes, stereo sound solutions and waterproof features. The impact of LeShi s (314 CH) financial difficulty and Samsung s Note 7 incident to AAC is limited because LeShi is not AAC s major customer and AAC has a diversified customer base. We maintain the Company s investment rating of Buy and the TP of HK$9.. Due to the revision of haptics & RF revenue estimations, we revise up FY16-FY18 EPS by.8%/ 1.7%/ 2.4%, respectively. The TP represents 23.1x FY16 PER, 18.1x FY17 PER, 15.2x FY18 PER and 1.4x FY15-FY18 PEG. 第 3 季度业绩好于市场预期 6.% 及符合我们的预期 瑞声第 3 季度净利润同比增长 29.3%, 主要是由智能手机生产商推出多款旗舰智能手机型号, 及规格升级所推动 由于中国智能手机提供商的更大贡献, 我们分别上调 财年的触控马达和无线射 频结构件产品收入 2.7%/ 3.9%/ 4.5% 由于生产能力的提高, 触控马达和无线射频结构件 产品贡献增长, 预计非声学部件收入将在 217 财年超越声学部件收入 我们预计 年的动圈器件的收入分别增长 24.4%/ 11.%/ 14.1% 动圈器件收入 的增长率得到安卓客户采用更高级的扬声器箱 立体声解决方案和防水功能所支持 乐视 (314 CH) 的财务困难和三星 Note 7 事件对公司的影响有限, 因为乐视并不是瑞声 的主要客户, 及瑞声拥有多元化的客户群 我们维持公司的投资评级为 买入 及目标价为 9. 港元 由于触觉和无线产品收入预测 的修订, 我们分别上调 216 财年至 218 财年的每股盈利.8%/ 1.7%/ 2.4% 目标价相 当于 23.1 倍 216 财年市盈率 18.1 倍 217 财年市盈率 15.2 倍 218 财年市盈率及 1.4 倍 财年 PEG Rating: Buy Maintained 评级 : 买入 ( 维持 ) 6-18M TP 目标价 : HK$9. Revised from 原目标价 : HK$9. Share price 股价 : Stock performance 股价表现 (2) % of return HK$71.85 (4) Nov-15 Feb-16 May-16 Aug-16 Nov-16 HSI Index Change in Share Price 股价变动 1 M 1 个月 AAC Tech 3 M 3 个月 1 Y 1 年 Abs. % 绝对变动 % (9.6) (11.4) 27.6 Rel. % to HS index 相对恒指变动 % (5.2) (8.7) 29.3 Avg. Share price(hk$) 平均股价 ( 港元 ) Source: Bloomberg, Guotai Junan International Year End Turnover Net Profit EPS EPS Change PER BPS PBR DPS Yield ROE 年结 收入 股东净利 每股净利 每股净利变动 市盈率 每股净资产 市净率 每股股息 股息率 净资产收益率 12/31 (RMB m) ( RMB m) ( RMB ) ( %) (x) ( RMB ) (x) ( RMB ) (%) (%) 214A 8,879 2, (1.1) A 11,739 3, F 14,398 3, F 18,318 4, F 21,613 5, Shares in issue (m) 总股数 (m) 1,228. Major shareholder 大股东 Ms. Ingrid Chunyuan Wu 4.3% Market cap. (HK$ m) 市值 (HK$ m) 88,231.8 Free float (%) 自由流通比率 (%) month average vol. 3 个月平均成交股数 ( ) 4,766.8 FY16 Net gearing 216 年净负债 / 股东资金 ).6% 52 Weeks high/low (HK$) 52 周高 / 低 9.2 / 43.9 FY16 Est. NAV (HK$) 216 每股估值 ( 港元 ) 95. See the last page for disclaimer Page 1 of 8

2 3Q16 Results Review 3Q16 results were better than market expectation by 6.% and in line with our expectation. AAC recorded 29.3% yoy growth in net profit, driven by specifications upgrades with the launch of a number of flagship smartphone models by top smartphone providers. AAC s acoustics business benefited from smartphone specifications upgrades with increasing adoption of higher grade speaker boxes, stereo sound solutions and waterproof features. Non-acoustics accounted for 45% of the Company s total revenue in 3Q16, driven by higher adoption of haptics components and antennaes with better casting solutions. AAC is expected to benefit from the integration of 3D glass with its casting solutions for improving services and solutions and meeting customer needs in product designs. The Company expects non-acoustics will surpass acoustics as the major revenue driver in FY17 due to stronger sales in the haptics & RF mechanical business with improvement in production capacity. The Company is expected to reduce CAPEX in FY17 to FY18 thanks to the completion of CNC machines expansion plan in FY16. AAC has around 4,-5, CNC machines and is expected to reach 7, in FY17, contributed by the capacity expansion plan in FY16. The Company projects strong business growth in the coming several quarters due to a seasonal peak in 4Q16 and benefit from customer diversification in FY17. Table-1: AAC s Income Statement Analysis RMB (Million) 3Q16 3Q15 YoY Comments Total revenue 4,27 3, % Cost of revenue (2,448) (1,859) 31.7% Gross profit 1,759 1, % Contributed by strong growth in haptics & RF products with improvement of ASP Other income % Distribution & selling expenses (85) (67) 26.9% Admin expenses (13) (187) (3.5%) R&D expenses (331) (25) 61.5% Share of results of associates (3) (1) 2.% Exchange gain 3 26 (88.5%) Finance costs (19) (5) 28.% Profit before tax 1, % Income tax (166) (86) 93.% Shareholders profit 1, % EPS (RMB) % Gross profit margin 41.8% 41.6% (.2ppt) Net profit margin 26.1% 26.7% (.6ppt) Higher R&D expenses for launching new products and improvement Stabilized GPM thanks to diversification of product contributions amid fiercer market competition We revise up FY16-FY18 haptics and RF business revenue by 2.7%/ 3.9%/ 4.5%, respectively. The shipments of RF mechanical products are expected to reach 4 million to 5 million, on the back of a higher adoption rate for the latest smartphones. AAC is launching 3D glass solutions to its casting customers which can improve services with an all in one solution. There are several smartphone providers that are providing 3D glass smartphones including Samsung s Edge series and Vivo s Xplay 5 Elite. AAC may introduce its 3D glass solution to its Android customers. We see more and more smartphones deploying the 3D glass driven by customers preferences and market trend. The monthly shipment of 3D glass in FY17 is forecasted to be 5,. AAC s haptics shipments are expected to benefit from the launch of the new iphone in 217. We forecast that Chinese smartphone providers can show a stronger contribution to AAC for the RF mechanical solutions in FY17 driven by higher domestic demand with the increase of handset subsidies by Chinese telecom operators. We revise up FY16-FY18 hatpics and RF business revenue by 2.7%/ 3.9%/ 4.5%, respectively. Non-acoustic products revenue contribution See the last page for disclaimer Page 2 of 8

3 is expected to surpass the acoustic products in FY17 driven by stronger Chinese customer demand for RF mechanical solutions, glass and lenses with higher production capacity. Figure-1: AAC s Annual Haptics & RF Revenue and YoY Growth Figure-2: Revenue Proportion of Different Products RMB (Million) Haptics & RF components revenue (LHS) 12, YoY growth (RHS) 11,312 1, 165.8% 9,189 8, 5,891 6, 4,441 4, 1,67 56.% 2, 35.% 23.1% 18% 15% 12% 9% 6% 3% % 1% 8% 6% 4% 2% % 4.4% 1.3%.9%.6%.5% 3.6% 1.6% 1.1% 9.6% 8.4% 18.8% 67.2% 37.8% 4.9% 52.4% 54.6% 5.2% 52.3% 47.6% 46.1% Others MEMS components Haptics & RF Dynamic components Acoustic business to be propelled by upgrades from Chinese smartphone makers. 3Q16 dynamic components revenue grew 38% yoy and accounted for 51% of the Company s total revenue. The dynamic component business benefited from speaker box upgrades by Chinese smartphone makers. Speaker boxes have a higher ASP compared to traditional speakers, and AAC is expected to improve its ASP. Higher grade speaker boxes, stereo sound solutions and waterproof features among Chinese smartphone makers are expected to sustain AAC s dynamic product demand in FY17. We forecast dynamic component revenue to grow 7.8% QoQ in 4Q16 and 11.%/ 14.1% in FY17-FY18, respectively. We think price competition will intensify in the MEMS speaker market owing to similar products available among suppliers, which has resulted in little product differentiation and a commodity effect. We expect AAC s major GoerTek to affect AAC s market share due to their aggressive pricing strategy for acoustic products. Due to stronger competition in the MEMS components market, we expect AAC s FY16-FY18 MEMS component revenue to decline by 3.5%/ 45.%/ 19.3%, respectively. Figure-3: AAC s Dynamic Components Revenue and YoY Growth Figure-4: AAC s MEMS Components Revenue and YoY Growth RMB (Million) Dynamic components revenue (LHS) 12, YoY growth (RHS) 1, 24.4% 9,958 8,727 7,863 8, 5,967 6,152 6, 14.1% 11.% 3.1% 4, 2, -7.% 3% 2% 1% % -1% RMB (Million) MEMS components revenue (LHS) 1,2 16.2% YoY growth (RHS) 2% 1, 4.5% 99 1% % -1% % -2% % -3.5% 2-4% -45.% -5% Gross profit margin to be stabilized by better product ASP with specifications upgrades. 3Q16 gross profit margin declined by.2 ppt yoy to 41.8% due to higher margin non-acoustic contributions amid fierce competition in the acoustic market. R&D costs as a percentage of revenue in 3Q16 was 7.9%, up 1.5 ppt yoy due to higher costs for launching new products and technology. Administrative expenses as a percentage of revenue declined in recent quarters thanks to the See the last page for disclaimer Page 3 of 8

4 economies of scale effect. Distribution and selling expenses in 3Q16 remained stable at 2.%, which was similar to last year s 2.1%. We forecast operating expenses to grow moderately and stabilize at a percentage of revenue due to the Company s expenses control policy and benefiting from economies of scale. Thanks to stable gross profit margin and operating expenses, AAC s FY17-FY18 net profit margin is expected to improve by.1 ppt/.2 ppt to 26.1%/ 26.2%, respectively. AAC expected limited impact from LeShi and Note 7 incidents. There was news regarding LeShi facing financial difficulty, which will affect its supplier chain. AAC explained that LeShi is not the Company s major customer. Samsung has launched a recall for its Note 7 smartphone model due to a battery problem. We expect that the original customers of Samsung may shift to other brands such as Apple or Huawei, which are still AAC s customers. We think the Note 7 recall has little influence to the Company s products shipments. Higher contribution from Chinese customers. Chinese smartphone makers accounted for over 4% of AAC s total revenue in the first three quarters in 216, compared with 32% last year. Sales from Chinese customers surged 57% yoy in the first three quarters in 216, contributed by speaker box and RF mechanical solutions. Chinese customers accounted for more than 4% of the Company s total revenue in the first three quarters in 216, compared with 32% last year, in line with the market trend, with Chinese smartphone providers shipment growth in 3Q16 (Huawei s 23.%, OPPO s 121.6%, Vivo s 12.5%) outpacing those of overseas providers (Samsung s -13.5%, Apple s -5.3%). Figure-5: 3Q16 Smartphone Shipments and YoY Growth Figure-6: AAC s Gross Profit Margin Million 9 Smartphone shipments (LHS) YoY growth (RHS) 15% 42.% % 12.5% 12% 9% 6% 41.5% 41.4% 41.5% 41.6% 41.5% 41.4% % -5.3% 23.% % % Source: IDC. Samsung Apple Huawei OPPO Vivo -3% 41.% Profit Revision FY16-FY18 EPS is revised up by.8%/ 1.7%/ 2.4%, respectively. We revise up FY16-FY18 haptics & RF revenue forecasts by 2.7%/ 3.9%/ 4.5%, respectively. Due to the revision of revenue forecasts, we revise up FY16-FY18 EPS by.8%/ 1.7%/ 2.4%, respectively. Table-2: Financial Estimation Revisions OLD RMB (Million) 216F 217F 218F 216F NEW 217F 218F 216F CHANGE 217F Total revenue 14,185 17,819 2,822 14,398 18,318 21, % 2.8% 3.8% Dynamic components revenue 7,863 8,727 9,958 7,863 8,727 9,958.%.%.% Haptics & RF revenue 5,736 8,844 1,825 5,891 9,189 11, % 3.9% 4.5% MEMS components revenue %.%.% Others revenue %.%.% Net profit 3,78 4,7 5,545 3,738 4,78 5,678.8% 1.7% 2.4% EPS (RMB) % 1.7% 2.4% Source: Guotai Junan International. 218F See the last page for disclaimer Page 4 of 8

5 Valuation Maintain the investment rating of Buy and the TP of HK$9.. We expect that AAC can benefit from the upgrade cycles of smartphone specifications and the introduction of new smartphone features. A number of flagship smartphones (such as Apple s iphone 7, Huawei s Mate series and P9 series) will support AAC s component business demand. AAC is also expanding its business and services in non-acoustic products such as 3D glass and lenses to provide full production solutions to meet customer needs and services. Non-acoustic products are expected to be AAC s major profit contributor due to higher growth in the haptics & RF products demand compared with the highly competitive acoustics market. We maintain the Company s TP of HK$9., which implies 23.1 FY16 PER, 18.1x FY17 PER, 15.2x FY18 PER and 1.4x FY15-FY18 PEG. Figure-7: AAC s PE Graph SD Average SD Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Source: Bloomberg. Figure-8: AAC s PB Graph SD 5 4 Average 3-1 SD 2 1 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Source: Bloomberg. See the last page for disclaimer Page 5 of 8

6 Table-3: Peers Comparison PER PB ROE (%) D/Y (%) ROA (%) Company Ticker Currency Price 16F 17F 18F 16F 17F 18F 16F 16F 16F AAC Tech 218 HK HKD Sunny Optical Tech 2382 HK HKD Truly Electronics Ltd 732 HK HKD Primax Electronics Ltd 4915 TT TWD Merry Electronics Co Ltd 2439 TT TWD Largan Precision Co Ltd 38 TT TWD Lite-On Tech Corp 231 TT TWD Knowles Corp KN US USD n.a. n.a. n.a. 5.2 n.a. 5. Overall Average Overall Weighted Average Jinlong Machinery & Elect-A 332 CH CNY GoerTek Inc CH CNY Overall Average Overall Weighted Average Source: Bloomberg. Appendix Table-4: Technical Terms Glossary Abbreviation Definitions 定义 CMOS Complementary Metal-Oxide Semiconductor 互补金属氧化半导体 ; CCD Charge-Coupled Device 电荷耦合装置 SNR Signal To Noise ratio 信噪比 ERM Eccentric Rotating Mass Motor 偏心旋转质量电机 LRA Linear Resonant Actuator 线性谐振致动器 VCM Voice Coil Motor 音圈驱动器 NFC Near Field Communication 近场通讯 RF Radio Frequency 无线射频 MEMS Micro Electro Mechanical Systems 微电子机械系统 Source: the Company. See the last page for disclaimer Page 6 of 8

7 Financial Statements and Ratios Income Statement Balance Sheet Year end Dec 31, RMB m Year end Dec 31, RMB m Dynamic components revenue 5,967 6,152 7,863 8,727 9,958 PP&E 5,285 7,8 9,69 11,277 12,9 Haptics & RF revenue 1,67 4,441 5,891 9,189 11,312 Available for sale investments MEMS components revenue prepay lease payments Others revenue Intangible assets Total revenue 8,879 11,739 14,398 18,318 21,613 Others Total non-current assets 6,529 8,239 1,782 12,272 13,811 Cost of sales (5,21) (6,867) (8,48) (1,716) (12,665) Gross profit 3,678 4,872 5,989 7,62 8,948 Inventory 1,267 1,718 1,821 1,985 2,164 Trade and other receivables 3,85 4,196 4,615 4,77 4,82 Other income & gains Bank deposit and cash 1,63 2,224 1,933 2,672 3,735 Distribution & selling expenses (199) (257) (32) (366) (411) Others Administrative expenses (338) (546) (54) (65) (67) Total current assets 6,75 8,181 8,414 9,412 1,75 R&D costs (656) (859) (1,137) (1,411) (1,643) Total assets 13,279 16,42 19,196 21,684 24,561 Others (6) 71 (1) 2 Finance costs (14) (22) (48) (38) (24) Trade and note payables 2,388 2,919 3,386 3,555 3,733 Short term loans 1,418 1,159 1,263 1,11 66 Profit before tax 2,581 3,435 4,162 5,341 6,344 Others Tax (27) (325) (42) (555) (66) Total current liabilities 4,1 4,326 4,967 4,924 4,726 Profit for the year 2,31 3,11 3,11 3,11 3,11 Shareholders' profit 2,318 3,17 3,738 4,78 5,678 Long term loans Non-controlling interest (7) Government grants EPS (RMB) Deferred tax liabilities Others 11 Cash Flow Statement Total non-current liabilities Year end Dec 31, RMB m Total liabilities 4,88 5,66 5,777 5,574 5,226 Profit before tax 2,581 3,435 4,162 5,341 6,344 Adjustments for Share capital Interest income (24) (15) (16) (17) (19) Reserves 9,38 11,27 13,263 15,943 19,155 Interest expenses Total shareholders' equity 9,138 11,37 13,363 16,42 19,255 D&A ,419 1,184 Non-controlling interests Others Total equity 9,192 11,354 13,418 16,19 19,335 Change in working capital (94) (286) (6) (91) (97) BPS (RMB) Tax paid (248) (277) (42) (555) (66) Cash flow from operations 1,967 3,76 4,85 6,268 6,95 Financial Ratios Year end Dec 31 CAPEX (2,152) (2,344) (3,6) (3,) (2,8) Gross margin Pledged bank deposit change (2) 4 Net margin Others 1 (129) (3) (27) (2) ROA Cash flow from investment (2,153) (2,469) (3,63) (3,27) (2,82) ROE Bank loan change (422) (565) Receivable days Dividend paid (1,52) (94) (1,682) (2,13) (2,498) Inventory days Others (23) (82) (48) (38) (23) Payable days Cash flow from financing (569) (721) (1,567) (2,563) (3,87) Cash conversion cycle Change in cash & bank balance (755) 57 (347) Current ratio (x) Cash balance at year begin 2,354 1,63 2,224 1,933 2,672 Quick ratio (x) Effect of FX Debt to equity ratio (x) Cash balance at year end 1,63 2,224 1,933 2,672 3,735 Net gearing (%) Net cash Net cash.6 Net cash Net cash See the last page for disclaimer Page 7 of 8

8 Company Rating Definition The Benchmark: Hong Kong Hang Seng Index Time Horizon: 6 to 18 months Rating Definition Buy Relative Performance >15%; or the fundamental outlook of the company or sector is favorable. Accumulate Relative Performance is 5% to 15%; or the fundamental outlook of the company or sector is favorable. Neutral Relative Performance is -5% to 5%; or the fundamental outlook of the company or sector is neutral. Reduce Relative Performance is -5% to -15%; or the fundamental outlook of the company or sector is unfavorable. Sell Relative Performance <-15%; or the fundamental outlook of the company or sector is unfavorable. Sector Rating Definition The Benchmark: Hong Kong Hang Seng Index Time Horizon: 6 to 18 months Rating Definition Outperform Relative Performance >5%; or the fundamental outlook of the sector is favorable. Neutral Relative Performance is -5% to 5%; or the fundamental outlook of the sector is neutral. Underperform Relative Performance <-5%; or the fundamental outlook of the sector is unfavorable. DISCLOSURE OF INTERESTS (1) The Analysts and their associates do not serve as an officer of the issuer mentioned in this Research Report. (2) The Analysts and their associates do not have any financial interests in relation to the issuer mentioned in this Research Report. (3) Except for SMI Holdings Group Limited (198 HK), Guotai Junan International Holdings Limited (1788 HK), Binhai Investment Company Limited (2886 HK) and Link Holdings Limited (8237 HK), Guotai Junan and its group companies do not hold equal to or more than 1% of the market capitalization of the issuer mentioned in this Research Report. (4) Guotai Junan and its group companies have not had investment banking relationships with the issuer mentioned in this Research Report within the preceding 12 months. (5) Guotai Junan and its group companies are not making a market in the securities in respect of the issuer mentioned in this Research Report. (6) Guotai Junan and its group companies have not employed an individual serving as an officer of the issuer mentioned in this Research Report. There is no officer of the issuer mentioned in this Research Report associated with Guotai Junan and its group companies. DISCLAIMER This Research Report does not constitute an invitation or offer to acquire, purchase or subscribe for securities by Guotai Junan Securities (Hong Kong) Limited ("Guotai Junan"). Guotai Junan and its group companies may do business that relates to companies covered in research reports, including investment banking, investment services, etc. (for example, the placing agent, lead manager, sponsor, underwriter or invest proprietarily). Any opinions expressed in this report may differ or be contrary to opinions or investment strategies expressed orally or in written form by sales persons, dealers and other professional executives of Guotai Junan group of companies. Any opinions expressed in this report may differ or be contrary to opinions or investment decisions made by the asset management and investment banking groups of Guotai Junan. Though best effort has been made to ensure the accuracy of the information and data contained in this Research Report, Guotai Junan does not guarantee the accuracy and completeness of the information and data herein. This Research Report may contain some forward-looking estimates and forecasts derived from the assumptions of the future political and economic conditions with inherently unpredictable and mutable situation, so uncertainty may contain. Investors should understand and comprehend the investment objectives and its related risks, and where necessary consult their own financial advisers prior to any investment decision. This Research Report is not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation or which would subject Guotai Junan and its group companies to any registration or licensing requirement within such jurisdiction. 216 Guotai Junan Securities (Hong Kong) Limited. All Rights Reserved. 27/F., Low Block, Grand Millennium Plaza, 181 Queen s Road Central, Hong Kong. Tel.: (852) Fax: (852) Website: See the last page for disclaimer Page 8 of 8