Alibaba was originally a subsidiary of Acer (2353). Its main business was DVD chip design. It was sold to Mediatek (2454) in 2004 and transferred to STB chipset business. At present, MediaTek holds a share of 7.96%. In terms of revenue, 50~55% of retail set-top boxes, 40~45% of pay-TV operators' set-top boxes, and others (such as audio and RF chips) are 5~10%.
The main markets of set-top boxes for pay-TV operators are all marked by the nature of the label. Currently, they mainly come from the demand for analog-to-digital conversion in India. ALi has shipped since the third quarter of last year, but it has faced memory shortages in the fourth quarter. The goods were severely deferred. As of June this year, after customers changed their plans, they started to pull goods into Yangzhi, which is expected to bring a lot of revenue to the camp.
In addition to India's bid, India will re-open the bid in October, mainly for the conversion signal from SD to HD in urban areas. ALi said that if the client wins the bid, it should be able to start small shipments by the end of the year. According to reports, this is the first shipment of HD pay-TV operators' set-top boxes, all of which used to be SD products. Compared with SD, HD has a slightly higher gross profit margin, plus urban areas. The signal conversion is often faster than in rural areas. It should bring greater momentum to Yang Zhi next year's revenue and gross profit margin.
In addition, ALi also launched a 4K pay-TV operator set-top box at the end of last year. Currently, it is actively negotiating with customers and is expected to make continuous contributions from next year.
Yang Zhi stated that pay-TV operators’ set-top boxes had made breakthroughs in India’s reporting last year, with revenue growth of 5 to 10%, and the proportion of revenue increased from 35 to 40% the previous year to 40 to 45%. Still optimistic about this product line this year.
In addition, in terms of retail set-top boxes, ALi won the bid to convert the terrestrial broadcasting system in Brazil last year. This year it will conduct bid competitions in another district in Brazil. Originally, it is expected that the second season will be awarded. However, it is still unknown. Therefore, Yang Zhi also Look at the decline in this product line compared to last year.
Looking forward to the second quarter, the legal person expects that the resumption of merchandising triggered by India's bids should bring about double-digit growth in the second quarter compared to the first quarter, but it should still be recessed compared to the same period of last year, although the gross profit margin remains stable. 30%, but the cost is still high, it is difficult to turn the whole quarter.
Looking forward throughout the year, the legal person estimates that since ALi has been actively deploying the pay-TV market for a long time, the peak season is also concentrated in the second half of the year. Therefore, the follow-up observation of the timetable for pull-out and the progress of the labeling in Brazil, plus the retail STB market On the other hand, due to the low technical threshold and the saturation of the market, the revenue should gradually decline. In terms of profitability, pay-TV products with higher gross margins can boost retail STBs with higher gross margin pressures. The interest rate can be maintained at a water level of around 30%, but the cost is still high, so this year it will be more difficult to turn around.