01 May 2015 Asia Pacific/Taiwan Equity Research Semiconductor Devices MediaTek Inc. (2454.TW / 2454 TT) Rating NEUTRAL* Price (30 Apr 15, NT$) 395.00 RESULTS Target price (NT$) 405.00¹ Upside/downside (%) 2.5 Mkt cap (NT$ mn) 708,117 (US$ 23,121) 2Q lacks growth, but a high bar is set for 2H Enterprise value (NT$ mn) 544,619 ■ 1Q15 results in line with CS, but below street. 1Q15 sales were already Number of shares (mn) 1,792.70 Free float (%) 89.1 reported at NT$47.5 bn, -14.3% QoQ. Smartphone shipments were 85 mn 52-week price range 535.0 - 390.0 (30mn LTE), down from 95-100mn in 4Q14 due to seasonality and emerging ADTO - 6M (US$ mn) 101.0 market weakness. GMs met our 47.3% vs 46-48% guidance and OpM was also *Stock ratings are relative to the coverage universe in each analyst's or each team's respective sector. in line at 16.1% on cost controls. Lower non-op income kept EPS only in line ¹Target price is for 12 months. with our NT$4.62 and below street's NT$4.97. Research Analysts ■ 2Q15 guidance below, inventory elevated. Sales were guided -5% to +3% Randy Abrams, CFA QoQ, below CS/street's +9%/+18% QoQ on 3G price pressure and 4G mix 886 2 2715 6366
[email protected] skewed to the entry level. Margins are in line, with GMs at 45.5-47.5% and Nickie Yue OpM at 12.5-16.5%. Inventory is elevated, at 102 days and guided to stay 886 2 2715 6364 98-110 days in 2Q15, requiring 2H15 acceleration.