MosChip Semiconductor Technology Limited

Transcription

1 19 January 2016 CMP: Rs.7.2 Industry: IT BSE Group/Index: B Promoters Reddy family Year of incorporation 1999 Registered office Plot No.83 & 84, 2nd Floor, Punnaiah Plaza, Road No.2, Banjara Hills, Hyderabad, Telangana Company website Write to us at: equity.research@outlook.com Key Data (as on 23 Dec 15) BSE code ISIN INE935B01025 Face Value (Rs.) 2.0 Mkt Cap (Rs.mn) Current P/E Current P/BV (2.1) 52 week highlow (Rs.) day avg daily trading vol. (shares) 155,636 Equity capital (Rs.mn) 92.1 Net worth (Rs.mn) (123.2) Company Business MosChip Semiconductor Technology Limited is a semiconductor service company with design experience in markets such as aerospace and defense, consumer electronics, audio and video, networking and telecommunications, mobile electronics, security, and software development. MosChip has a service design facility. The company has product development experience with SoC devices, connectivity, software, and systems engineering. MosChip delivers ASIC, firmware, drivers, boards, and platform solutions. Peer group analysis The company s profitability and return ratios (EBITDA margin, PAT margin and ROACE) are lower than that of its peers. Financials Standalone MosChip C T I L Ltd. Commex Shonkh Particulars (FY15, Semiconductor Technology Technologies Rs.mn) Technology Ltd Ltd. Intl. Ltd. Total Income EBITDA (18.5) EBITDA margin (%) PAT (46.4) PAT margin (%) EPS (Rs.) (1.0) Cash accruals (42.4) Debt/EBITDA (x) (8.9) Debt/Equity (x) (1.3) ROANW (%) ROACE (%) (41.7) P/E (TTM) P/BV (TTM) (2.1) Peers based on industry Page 1 of 5

2 Share Price Performance 123.1% Change in Shareholding Pattern (%) As on Promoters DII FII Others 30Sep Jun % 40.1% 31Mar Mar Mar Yr 0.9% 3 Yr 31Mar Mar Moschip Semiconductor Technology Ltd. S&P BSE 500 Top Public Shareholders with >1% shareholding Sl. No. Name of the Shareholder No. of Shares held (in 000s) Shares as % of Total No. of Shares 1 Ess Technology International Inc 2, Paul Sung Lui Chin Shun Yee Julia Chun Yuan Wang Artec Group Ou Sarju C Jhaveri Total 5, Page 2 of 5

3 Key concerns and risks There is pricing pressure in the value added services space within the semiconductor industry as many MNC's are looking at lowering their R&D budgets and have expanded their operations within India and other countries with cheaper labor force. There is lot of dependency on the continued services of key personnel due to their technical expertise Infringement actions could be timeconsuming and expensive to defend. The cyclical nature of the semiconductor industry may lead to significant variances in the demand for MosChip Group's products and could harm its operations. Fluctuation in the value of the rupee against foreign currencies can have impact on the earnings of the company. Global IT industry Indian IT industry Indian semiconductor industry Industry overview Software and computing technology are transforming businesses in every industry around the world. Advances in hardware technologies and the continued reduction in the unit cost of hardware, the explosion of network bandwidth, advanced software technologies and technologyenabled services are fueling the rapid digitization of business processes and information. Traditional business models are being disrupted in every industry, with digital and softwarebased business models. The combination of highperforming and ubiquitous realtime computing, massive data streams, economic bandwidth, hyper connectedness and intelligent software is creating new business opportunities for the world's leading corporations. The Indian IT industry is the topmost offshoring destination for IT companies across the world. Having proven its capabilities in delivering both onshore and offshore services to global clients, emerging technologies now offer an entire new gamut of opportunities for top IT firms in India. The Indian ecommerce segment is USD 12 bn in size and is witnessing strong growth and thereby offers another attractive avenue for IT companies to develop products and services to cater to the high growth consumer segment. Semiconductors find applications across a wide range of industries such as Mobile Devices, Telecommunications, Information Technology & Office Automation (IT & OA), Industrial, Automotive and other industries (Aerospace, Defense and Medical industries). According to the Department of Electronics and Information Technology (DeitY), nearly 2,000 chips are being designed every year in India and more than 20,000 engineers are working on various aspects of chip design and verification. Over the years, the Indian semiconductor design industry has developed significant capabilities and currently works on stateoftheart products. Growing technical competence combined with stringent IP protection environment and trend towards localization of contents will help this segment continue to grow. Considering the continued growth momentum, the Indian semiconductor design market is expected to grow at a CAGR of 29.4 percent to touch US$ 52.6 billion in The key drivers for the semiconductor market in India include telecom infrastructure equipment, wireless handsets, notebooks and other IT and office automation products, settop boxes and smart cards. Page 3 of 5

4 Quarterly results Particulars (Rs. in mn) Jul'15 to Sep'15 Jul'14 to Sep'14 % Change 1 Apr'15 to Jun'15 % Change 2 Total income Total expenditure EBITDA (8.4) (7.6) (9.7) PBT (16.7) (14.0) (16.4) PAT (19.2) (14.0) (16.4) EPS (0.4) (0.3) (16.4) 1 compared to corresponding quarter in the previous year 2 sequential comparison Book Value per share Key ratios (0.50) (1.00) (1.50) (2.00) (2.50) (3.00) (3.50) Dividend per share (Rs.) EPS (Rs.) Profitability (50.00) (100.00) (150.00) Leverage ratios (5.0) (200.00) (250.00) (10.0) 8.9 RONW (%) ROCE (%) Debt/EBITDA (x) Debt/Networth (x) Page 4 of 5

5 Financials Income Statement (Period ended 31 Mar) Balance Sheet (As at 31 Mar) Total income Share Capital EBITDA (67.2) (66.4) (18.5) Share Application Money Pending allotment EBITDA margin (%) Reserves & Surplus (436.9) (523.1) (215.3) Depreciation Net worth 23.4 (62.7) (123.2) EBIT (136.6) (81.8) (22.5) Borrowings Interest Current Liabilities & Provisions PBT (143.9) (98.0) (46.4) Total liabilities Tax Net fixed assets PAT (143.9) (98.0) (46.4) Capital WIP PAT margin (%) Investments Dividend Inventories Dividend payout (%) Sundry Debtors Cash & Bank Cash Flow Statement (Period ended 31 Mar) Other Current Assets PBT (143.9) (98.0) (46.4) Loans and Advances CF from operations (14.3) (4.3) (2.1) Miscellaneous Expenses not w/off CF from investing Deferred Tax Assets/(Liabilities) CF from financing (0.1) Total assets Inc/(dec) in cash (12.0) (0.1) (0.6) Closing Balance Disclaimer The information contained herein is from publicly available data or other sources believed to be reliable, but we do not represent that it is accurate or complete and it should not be relied on as such. Our company shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for any investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document should make such investigation as it deems necessary to arrive at an independent evaluation which may affect their investment in the securities of companies referred to in this document (including the merits and risks involved). The discussions or views expressed may not be suitable for all investors. This information is strictly confidential and is being furnished to you solely for your information. Page 5 of 5