2454 TT

MediaTek Incorporation

TMT


Presented:04/19/2017
Price:NT$214.00
Cap:$10.72B
Current Price:NT$1,300.00
Cap:$65.95B

Presented

Date04/19/2017
PriceNT$214.00
Market Cap$10.72B
Ent Value$7.77B
P/E Ratio14.13x
Book ValueNT$155.48
Div Yield0.05%
Shares O/S1,574.32M
Ave Daily Vol6,186,914
Short IntN/A

Current

PriceNT$1,300.00
Market Cap$65.95B
MediaTek, Inc. engages in the manufacture and sale of integrated circuit (IC) chip. It focuses on multimedia IC, computer peripheral IC, consumer electronics IC, and special application of IC. Its products include mobile communication chipset, tablet personal computer chip, bluetooth chip, wireless local area network chip, global positioning system chip, near field communication single-chip, multi-functional single-chip, multi-mode wireless charging chip, wearable devices Single-chip, wisdom home networking Chip, biosensor analog front-end wafers, optical storage chipset, digital video disc player single chip, blu-ray player chipset, high integration digital television control chip, United States and Europe regulation television decoding and demodulation chipset, digital subscriber loop terminal communications chipset, automotive electronic chipset power management and control chips for variety of electronic products, and universal serial bus power delivery type-c control chip. The company was founded on May 28, 1997 and is headquartered in Hsinchu, Taiwan.

Publicly traded companies mentioned herein: Apple Inc (AAPL), Intel Corp (INTC), MediaTek Inc (2454 TT), QUALCOMM Inc (QCOM), Samsung Electronics Co Ltd (005930 KS)

Highlights

The presenter is short shares of Taiwanese fabless semiconductor company MediaTek at ~214 (TWD), and sees the potential for competitive dynamics in the industry to negatively impact its future results. Qualcomm’s Snapdragon 835 is known to be a better chip than those that MediaTek offers, but Intel’s new XMM 7560 chip will lead to a loss of sockets on iPhones for Qualcomm. This could lead to more aggressive behavior pricing in the market near term. If the presenter’s assessment of the situation is accurate, MediaTek’s earnings could potentially come in 10% to 25% below Street estimates next year (2018), with the magnitude of the shortfall dictated by Qualcomm’s level of aggressiveness in the market. If he is correct, the multiple would likely contract to 10x and the stock would be more fairly valued in the 130-155 range.

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