1. Analysis of Qualcomm's financial report: OPPO/vivo contributed to apple Samsung;
Summary: Looking at Qualcomm's 5-year compound growth rate, revenue fell by 2%, net profit fell by 18%, operating cash flow dropped by 12%, and liabilities increased by 30%. Net margin fell from 28% in 2013 to 11% in 2017 The year 2017 saw YoY’s biggest decline, and it also faced considerable financial problems.
Qualcomm’s profitability in 2017 decreased, while it significantly increased debts, conducted NXP mergers and acquisitions, and sent large cash dividends at the same time. As a result, the company’s cash flow was extremely tight, and its debt ratio rose sharply. Total liabilities exceeded annual revenue, and current liabilities exceeded operating cash. With a two-fold flow, the long-term liabilities increase dramatically, resulting in high interest payment costs. They mainly rely on financing and processing some financial assets to obtain large amounts of cash.
The following is a detailed financial report analysis of Qualcomm:
1. Basic analysis
A. Qualcomm's revenue source is mainly QCT (mainly Xiaolong Series SoC), and the main source of net profit is QTL business (technical authorization). QCT's EBT profit is only 17%.
Qualcomm’s revenue in 2017 was approximately US$23 billion, of which QCT business revenue was US$16.5 billion, accounting for 72% of total revenue, and the pre-tax net margin was only 17%; QTL business revenue was 6.4 billion, accounting for 28% of the total business. The pre-tax net rate is as high as 80%.
C. Revenue growth includes RFFE and connectivity products, as well as revenue growth of high-end products (more than average ASP decline). RFFE revenues are US$670 million, accounting for 4% of QCT business; connectivity products revenue is nearly 500 million, the main sources Growth in the industrial sector, not in the traditional mobile phone field.
D.MSM and corresponding RF transceiver chips, Power management chip product revenue decreased, mainly due to the decline in revenue from Apple's revenue. However, the market share of OEM in China has improved. Apple and Samsung each contributed about 10 Qualcomm % of revenue, OPPO and ViVO together also contributed to more than 10% of Qualcomm's revenue. The decline in handset shipments will have a double negative impact on the QCT and QTL patent licensing business.
Both the vivo X21 and the OPPO R15 have been officially unveiled in March. As the OV flagship models of the year, these two handsets acted as the burden of a new round of sales. They chose Xiaolong 660. Xiaomi mix2s adopted the Xiaolong 845. These mobile phones will become the market explosion model, referring to the past sales, it is easy to impact 10 million sales.
OPPO is a Chinese mobile phone brand factory that was newly released in the past two years. After smoothly shipping more than 80 million units in the previous year, it officially hit 100 million, reaching 111.8 million, ranking fourth in the world. Following Samsung, Apple After Huawei, the fourth mobile phone factory with annual shipments of more than 100 million units. For mobile phone chip factories, Apple, Samsung, Huawei and other top three mobile phone makers have high self-preparation rate of mobile phone chips, and the space of third-party suppliers is Compression, so OPPO, Xiaomi, Vivo and other three major customers but is the most important customers, their contribution to the high-pass revenue is expected to be higher and higher. Qualcomm's new president Ameng even in the past two days even went to OPPO in Shenzhen The headquarters of the meeting.
2. Cash flow profile
A. Cash and Equivalents, Securities worth approximately US$ 38.6 billion, together with approximately US$ 11 billion in debt financing. With the current purchase price of US$ 44 billion, Qualcomm’s cash flow is very tight.
As can be seen from the above table, the amount of debt issuance financing is relatively high. The operating cash flow that reflects the company's core profitability is only US$4.7 billion, which is a decrease of nearly 37% compared to 2016. Mainly due to the Blackberry litigation fees and KFTC fines. 1.8 billion US dollars, and did not receive Apple's royalties.
B. In terms of daily operating expenses, R&D expenditure in 2017 was 5.5 billion, GA expenditure was 2.7 billion, capital expenditure was nearly 700 million, and annual expenditure was nearly 9 billion. The future expenditures that have not yet been recorded in the report are as follows, including 2018 - Spending is expected to exceed US$17.7 billion in 2022, mainly due to long-term liabilities and purchases of inventory. The purchase of inventory in 2018 amounts to US$3.5 billion, which is $846 million, $286 million, $72 million and $27 million for 2019-2022. US$1.9 billion was used to repay long-term liabilities. The expenditure from 2021 to 2022 was relatively low, averaging only US$1.1 billion per year, which was only 18% of 2018.
Qualcomm has borrowed heavily for the acquisition of NXP. The long-term liabilities increased 94% year-on-year in 2017, increasing from 10 billion in 2016 to 19.3 billion in 2017.
The increase in long-term liabilities has led to higher interest costs. As can be seen from the following data, the interest coverage ratio decreased from 63 in 2015 to 7 in 2017, a sharp drop of 9 times. This resulted in high interest payment costs for enterprises and a decline in profits. The current margin of security is not high.
Current liabilities increased by 50% in 2017 compared to 2016, from 7.3 billion to 10.9 billion. The operating cash flow is only around 4.7 billion (even if the fine of 1.8 billion is added, it is far below the amount of short-term debt).
Qualcomm’s current ratio remained at around 3, but its cash and equity components accounted for 80% of its current assets in 2017. The main source of this increase was investment cash flow.
The ability of operating cash flow to pay current liabilities declined year by year, from 1.7 in 2013 to 0.4, representing that the company’s operating cash was not enough to cover its current liabilities until 2017, mainly through the return on investment to make up for the cash portion.
The investment cash flow and financing cash flow analysis are as follows:
Before 2017, Qualcomm’s investment cash flow was negative, and in 2017 it increased rapidly to 18.8 billion, which was not derived from the main business, but dealt with some financial assets (Proceeds from sales and maturities of available-for-sale securities). , causing a substantial increase in investment cash flow.
Stock rate and stock repurchase
In 2017, net profit fell by 57% compared to 2016. Operating cash flow dropped by 37%. While preparing to acquire NXP, it still sent a large amount of dividends, which amounted to nearly 3.3 billion, and even exceeded net profit for the year. Cash dividends per share also reached new highs.
Qualcomm sent a large amount of cash dividends to increase its dividend yield. Although it increased the value of its stocks, its actual profitability was declining.
At the same time, the amount of stock repurchases was US$1.3 billion, which was the lowest in the past five years. In 2015, a large number of repurchased stocks amounted to US$11.2 billion, and in 2016, US$4 billion.
2. MediaTek's revenue will grow in the second quarter;
According to the micro-network news, MediaTek was affected by the price war on mobile phone chips and the appreciation of the Taiwan dollar against the US dollar last year. Consolidated revenue decreased by 13.5% year-on-year to NT$238.216 billion, and the net profit after tax attributable to the parent company was 24.333 billion yuan, a slight increase of 2.7% from the previous year. , Net profit of 15.56 yuan per share.
MediaTek was still affected by the off-season effect in the first quarter of this year. In the first two months, the consolidated revenue was 29.534 billion yuan, a 16.2% decrease from the same period of last year, but it is optimistic that the second quarter revenue will return to growth.
MediaTek launched the Helio P60 mobile phone chip with a new generation of built-in artificial intelligence computing cores, which has been adopted by OPPO, Vivo, Xiaomi and other mobile phone manufacturers. It will boost the second quarter and third quarter revenue growth.
3. TSMC: Revenue in March will usher in a big rebound;
According to Taiwan’s Electronics Times’ report, industry sources revealed that due to the increase in orders for 16nm and 12nm chips from NVIDIA and Bitmain, TSMC expects TSMC’s revenue to rebound to NT$100 billion (US$3.43 billion) in March.
Sources said that TSMC will achieve revenue growth in the second quarter, mainly because Apple and its fabless customers 7nm chip began shipping, it is understood that Qualcomm, Hass and Xilinx are TSMC's fabless major customers.
Throughout 2018, TSMC’s annual revenue will increase by at least 10% year-on-year, mainly driven by orders for smartphone SoCs and encrypted electronic currency mining chips.
Sources pointed out that TSMC plans to push its 7nm FinFET technology into production in June. At that time, TSMC will achieve a 100% market share for the 7nm chip. The project's revenue will also begin to show up in the second quarter.
In addition, strong 16nm and 12nm chip orders from GPU supplier NVIDIA and China's dedicated mining ASIC supplier Bitmain have started to drive sales of TSMC in March. Sources added that the strong demand for Bitcoin mining chips made Bitmain a Foundry's top customers.
Sources said that Bitmain has reportedly ordered orders for its mining ASICs from Taiwan Semiconductor Manufacturing Co.'s 12-inch fab in Nanjing, China, which is one of the drivers of growth in wafer foundry revenue in the second quarter of 2018. According to sources, TSMC’s Nanjing plant is expected to allocate 16,000 nanometers to 20,000 wafers for 12-inch wafers for Bitmain's order.
Sources said Bitmain will also use the capacity provided by the TSMC Nanjing facility to provide ASICs for Ethereum Mining and plans to ship in the second quarter. Sources said Bitmain expects to launch its Ethereum ASIC in April.
At the same time, in addition to gaming devices, NVIDIA has added chip orders for cryptocurrency mining, of which TSMC is one of the beneficiaries.
In addition, the growth of MediaTek's 12nm chip orders also brought profits to TSMC. MediaTek will launch the Helio P60 with AI function in April. It is now adopted by OPPO and Meizu, and it is rumored that millet will use it in the future.
In addition, the growth of MediaTek's 12nm chip orders also contributed to TSMC's profits. MediaTek will launch Helio P60 with AI function in April. It is now adopted by OPPO and Meizu. Millet will also be adopted in the future.
4.SEMI: Automotive compound annual growth of 5.8%;
As a result of the development of smart cars, smart network information, including ADAS advanced driving assistance systems, electric energy-saving, and automatic driving, all rely on the support of advanced automotive equipment, resulting in a significant increase in the number of semiconductor components contained in automobiles. SEMI said According to the latest research report, the output value of global automotive semiconductors will increase by 5.8% compound annual growth rate in 2020, reaching 48.78 billion US dollars.
This positive growth momentum also makes the automotive market become a semiconductor and microelectronics related manufacturer, becoming the most attractive industry focus.
In recent years, the autopilot system has been widely used in autonomous detection of exterior environments, such as optical sensors, radar sensors, ultrasonic sensors, imaging systems, and navigation (GPS). Semiconductors and microelectronics are also used in innovative autopilots. Technically, such as advanced driver assistance systems, image processors, application processors, sensors, DRAM and NAND Flash.
A recent report by Yole Développement states that by 2032, the production of self-driving cars will grow from 7,000 to 1.8 million vehicles this year, driving a significant growth in the relevant sensing components and systems market, with a view to a market value of 90 billion yuan. Yole further pointed out that the demand for high efficiency and low power consumption of electric vehicles or hybrid vehicles also drives the growth of new power semiconductor components, such as SiC and GaN, and will reach a value of more than US$20 billion in five years.
5. Shipments of electronic parts in Japanese factories increased for 14 months, the largest increase in three years
According to the statistics released by the Japan Electronics and Information Technology Industry Association (JEITA) on the 30th, due to smart phones, strong demand for automotive electronic components, plus from the semiconductor manufacturing equipment, factory automation (FA; Factory Automation) machines, machine tools and other industries The demand for machinery was also good. In January 2018, Japan’s electronic parts factory’s global shipments increased by 15.2% from the same month of last year to 360.4 billion yen, showing an increase for the 14th month in a row. Monthly shipments were higher for the 20th consecutive month. In the 300 billion yen mark, and the record increase in three years (January 2015, the month has increased by 17%) the largest increase.
In terms of regional shipments, the Japanese factory’s shipments of electronic components in Japan increased by 15% to 88 billion yen in January from the same month last year; shipments to the Americas grew by 11% to 35.2 billion yen; The volume of goods increased by 19% to 39.10 billion yen. Shipments of smartphones and other electronic equipment assembly plants in China increased by 17% to 121.3 billion yen. Shipments to other regions in Asia grew by 11% to 77 billion yen.
In terms of major items, in January, the Japanese factory's capacitor shipments increased by 33% from the same month last year to 94.5 billion yen; resistance grew by 14% to 13.2 billion yen; transformer shipments grew by 16% to 3.8 billion yen; The volume of goods grew by 13% to 22.3 billion yen; connector shipments grew 6% to 50.6 billion yen.
Sales volume of Switch components including touch panels grew by 3% to 40.8 billion yen, and actuators used for anti-vibration such as smartphone cameras increased by 34% to 28.2 billion yen. Shipments of audio components including headphones for smartphones grew 12% to 22.6 billion yen; shipments of radio frequency (RF) components including TV tuners, filters, and wireless modules grew 9% to 28.9 billion yen.
Japan's major electronic parts manufacturers include Kyocera, TDK, Nidec, Hitachi Metals, Nitto Denko, Alps Electric, Murata Mfg, Hosiden, Japan Nippon Electric Glass, Rohm.