2018 Interim Result Presentation

Transcription

1 2018 Interim Result Presentation 1

2 01 Introduction Content Interim Financial Analysis Market Analysis and Outlook 04 Q&A 2

3 1. Introduction 01 Company Profile 02 Primary Business 03 Company Framework 3

4 Company Profile OUR COMPANY MOBI Development Co., Ltd. ( MOBI ) is one of the one-stop providers of wireless communication antennas and base station Radio Frequency ( RF ) subsystems in China. Most of our customers are Network operators and equipment manufacturers from China and overseas. Our business includes a full range of products for base station equipment construction and related supplementary coverage. Besides, we are especially professional in base station antenna R&D and RF technologies. MOBI is listed in HKEx on 17 December, 2009 (Stock Code: 0947.HK). MOBI Development Co., Ltd. has four R&D and manufacture bases, located in Nanshan District in Shenzhen, Guangming District in Shenzhen, Ji'an in Jiangxi Province, and Xi'an in Shaanxi Province, separately. The total area of manufacture bases is around 110,000m2. 4

5 Primary Business Antenna System 1 Antenna System Main products are base station antennas and microwave antennas, such as TD/TD-LTE antennas, WCDMA/FDD-LTE antennas, multi-frequency and multi-system antennas, low-band refarming and IoT antennas, pre-5g antennas, microcell antennas, etc. Radio Frequency ( RF ) Subsystems Coverage Extension Solution 2 RF Subsystems Main products are RF devices including filters, diplexers and combiners, such as low-band refarming/iot RF devices, GSM/CDMA RF devices, WCDMA/FDD-LTE RF devices, TD/TD- LTE RF devices, etc. 3 Coverage Extension Solution Main products are aesthetic antenna and indoor coverage solutions. 5

6 Company Framework 100% MOBI Communication (JiAn) Base Station Production Microwave Antenna Production RF Feeder R&D and Production 100% MOBI Antenna (Shenzhen) RF Subsystem R&D Antenna R&D Aesthetic Antenna R&D Product Sales 100% 100% 100% MOBI Technology (Xi An) MOBI Technology (Shenzhen) MOBI Industry (Shenzhen) Die-casting and CNC Processing RF Subsystem R&D and Production Antenna R&D RF Subsystem R&D and Production Antenna R&D and Production Aesthetic Antenna R&D and Production 15.1% Shenzhen Borynet (Equity Investment) 100% MOBI Technology (Hong Kong) 12% Leteng Wireless (Equity Investment) WIFI Acceleration Self-owned Property Leasing 100% MOBI Technology (Wuhan) Cloud WIFI Antenna R&D RF Subsystem R&D Aesthetic Antenna R&D International Trade and Funding 6

7 Interim Financial Analysis Financial Introduction Revenue Analysis 03 Expense Analysis 7

8 Financial Introduction Revenue (RMB million) Gross Profit Margin % 22.1% H H Net Profit (RMB million) H H Net Profit Margin % 1.2% H H H H 8

9 Revenue Analysis 2018 Interim revenue and proportion (by customer type) (RMB million) Further Optimization of Client Structure International operators 79.8% International equipment manufacturers 66.7% 2.2% 14.6% 25.9% 22.7% 34.6% 206 PRC operators 8.2% H H PRC equipment manufacturers 52.0% PRC equipment manufacturers PRC operators International equipment manufacturers International operators Others 9

10 Revenue Analysis 2018 Interim revenue (by product type) Revenue of antenna system increased compared with the same period last year. (RMB million) Antenna System 3.9% Multi-frequency and multi-system antennas rapidly increased by 67.3%; WCDMA/FDD-LTE antennas rapidly increased by 70.3%; TD/TD-LTE antennas increased by approximately 16.0% compared with the same period last year. RF Subsystems 35.4% WCDMA/FDD-LTE RF devices rapidly increased by 79.1%; Gross profit rose gradually compared with Coverage Extension 19.6% H H Coverage Extension Solution RF Subsystems Antenna System Revenue decreased because of the temporary fluctuation caused by operator procurement in 2018; Needs of aesthetic antenna will continue increasing due to the lack of base station site and the operation of China Tower. 10

11 Cost Analysis Operating expenses to sales revenue ratio Administration, Selling and R&D expenses decreased compared with the same period of last year. 1.0% 1.3% 7.8% 7.6% 6.7% 6.8% 8.4% 7.8% H H Administration Expenses Decreased by approximately 20.2% and accounted for about 7.8% of revenue due to (1) the decrease in the average number of employees, which led to the decrease in expenses such as wages, surcharge on wages and rents; (2) the decrease in expenses such as business expenditures, travelling fees, maintenance costs, audit, consulting and advisory fees and legal costs; and (3) the depreciation of RMB against HK dollar, US dollar and Euro, which leads to a significant increase in the Group s asset exchange income denominated in those foreign currencies.. Selling Expenses Decreased by approximately 12.9% and accounted for about 6.8% of revenue due to the decrease in wages, surcharge on wages, rents and charges of water and electricity, business expenditures, travelling expenses and agency fees resulting from the decrease in sales products. R&D Expenses Decreased by approximately 15.5% and accounted for about 7.6% of revenue due to the decrease in salaries for research and development activities, surcharge on wages, communication cost, business expenditures, transportation costs and research and development materials cost. Financial Expenses Increased by approximately 7.5% and accounted for about 1.3% of revenue. 11

12 3. Market Analysis and Outlook Industry Status Company Highlights 03 Three-year Strategy 12

13 Industry Status- Current Low Operator Capital Expenditure is Expected to Rebound Capital Expenditure Of the 3 Largest Chinese Operators Year 2007 to 2018E (RMB hundred million) % China Telecom China Unicom China Mobile Overall Growth 44.08% 9.68% 10.24% 7.27% 20.47% 11.38% 16.37% 50.00% 40.00% 30.00% 20.00% 10.00% 2018 Under the background of basically completing 4G network coverage and speed reduction, the three largest Chinese operators will keep investment reduction strategies in % % % % E 0.00% % % % Looking forward to 2019, capital expenditures are expected to start to pick up as 5G pre-commercial networks will begin construction and carrier network equipment will begin to purchase. Source: Company Announcement, Cinda Securities Communications Industry Research Report, 13

14 Industry Status-A Periodic Cycle Revenue changes of antenna and RF device manufacturers Year 2009 to Year 2017 (RMB hundred million) 80 3G Cycle In the early 3G of 2009 and the early 4G of 2014, the revenue growth rate of enterprises which operate base station RF and antenna business reached the peak. The periodic feature is obvious and 5G investment peak is expected to come between Year 2019 and Year G Cycle 160.0% Source: Company Announcement, Essence Securities Communications Industry Research Report 140.0% 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% -20.0% -40.0% Company A Company B Company C Company D MOBI Reveue Growth Rate of Company A Reveue Growth Rate of Company B Reveue Growth Rate of Company C Reveue Growth Rate of Company D Reveue Growth Rate of MOBI 14

15 Industry Status-A Periodic Cycle Net profit changes of antenna and RF device manufacturers Year 2009 to Year 2017 (RMB hundred million) 10 3G Cycle Most companies peaked at the beginning of the cycle and reached a low point during the transition period. Then Profits gradually declined after reaching the high point in the initial stage of investment. 4G Cycle % % Company A Company B % Company C % Company D MOBI % 0.0% % % Net Profit Growth Rate of Company A Net Profit Growth Rate of Company B Net Profit Growth Rate of Company C Net Profit Growth Rate of Company D Net Profit Growth Rate of MOBI -6 Source: Company Announcement, Essence Securities Communications Industry Research Report % 15

16 Industry Status 5G Speeds up Global Operators 5G Schedule Basic commercial schedule will be executed in , China, USA and South Korea lead the group 01. Europe Russia Megafon/Yota: deployed 5G testing network in 2018 and plan for full deployment; Rostelecom: to launch commercial 5G network across Russia in 2019; MTS: to launch 5G in UK EE/BT: to provide 5G services in UK in 2019; Vodafone/ O2: to launch 5G in UK in Germany Deutsche Telekom: to fully deploy 5G in 2020; France SFR: to deploy 5G network across France in 2019 and to launch commercial 5G in 2020; Orange:to deploy 5G across France by North America 02. Asia Pacific USA AT&T: to launch 5G in over 10 cities in America by the end of 2018; Verizon: to launch commercial 5G services in around 3-5 cities in America in 2018; Sprint: to launch commercial 5G service in 2019; T-Mobile: to deploy 5G network in 2019 and cover the nation in Canada Telus: to deploy 5G between 2019 and South America and Africa South Africa: Comsol: to launch 5G in 2019; Brazil Claro: to launch 5G in China China Mobile: to launch 5G in 2019; China Telecom/China Unicom: to launch commercial 5G in Japan SoftBank: to deploy 5G by 2020; NTT Docomo: to launch 5G in Tokyo Olympics South Korea SK Telecom/KT/ LG Uplus : to launch 5G in March, Australia Optus: to deploy the first 5G fixed wireless network in the beginning of 2019; Telstra: to deploy 5G through three phases and realize full deployment by Source: 16

17 Industry Status 5G Speeds up 5G Process of International Equipment Manufacturers Operators are actively involved in testing and R&D of 5G, while commercial equipment are ready in the first half of The latest progress of the technology R&D test of the equipment manufacturers in the third phase of the 5G test led by the Ministry of Industry and Information Technology: NSA core net NSA base station function 3.5GHz RF 4.9GHz RF NSA outdoors Huawei R16 Pre-research ZTE ERICSSON Nokia DTT Source: IMT-2020(5) Promotion group, Sinolink Securities Communication Industry Research Report, 17

18 Industry Status 5G Technologies Generate Market Volume High Barriers to Entry:limited participants Certification The demand for the construction of new 5G base station The demand for reconstruction of the roof of existing base station Technology Fund 03 The demand for special antenna and high quality aesthetic antenna 04 Increase the value of antenna and RF devices Source: Essence Securities Communication Industry Research Report 18

19 Company Highlights Overseas Golden Opportunities Revenue Growth of Overseas Export in Recent Five Years H H ( 000 RMB) Asia Europe America Total H H H H H Overall Situation Revenues of overseas export s continuous growth brought in golden opportunities for global markets. In the first half of 2018, the revenue generated from export of the Group recorded 92.5% growth in Asian, European as well as American markets. In 2017, many overseas client, especially European clients offered opportunities to the Group for the products with high price-to-performance ratio. In the first half of 2018, the Group also becomes core supplier or even the whole-network exclusive antenna supplier, apart from the significant yearon-year increase in the business scale of international direct sales. 19

20 Company Highlights Customer Structure Optimized National Operator The implementation of the bidding for China Mobile and China Telecom has been well implemented; The Group still maintains powerful cooperation with China Unicom, and was recorded as the biggest winner in China Unicom antenna centralized procurement plan. 34.6% National Operator 25.9% National Equipment Manufacturer National Equipment Manufacturer The Group still possess advantage as a leading supplier with its leading advantage in aspects such as product technologies and customer communications. International Operator The Group s revenue of direct sales to international operators significantly increased by 79.8% as compared to the previous year and continued to maintain growth momentum. International Operator 14.6% International Equipment Manufacturer 22.7% International Equipment Manufacturer In the first half of 2018, the Group continued to maintain its overall growth momentum in sales of antenna and RF subsystem products to Nokia, with an overall increase of approximately 66.7%. The signed order with Ericsson will be executed in the second half of

21 Business Strategy of Three Years Three Strategic Direction: Market Exploration & R&D & Cost Management 01 Seize the overseas golden opportunities Further enhance the business development strategy with international client and advocates internationalization, meanwhile optimizing national client structure Accumulation of R&D and Technologies Actively develop 5G technologies; develop miniaturized, integrated, and MIMO products; enlarge product series, and control product quality and reliability. Effective Cost Management Optimize both product and customer structures through effective internal cost management, in order to improve overall net profit margin. 21

22 4. Q&A 22

23 Disclaimer This report is drafted and audited by MOBI Development Co., Ltd. ("Company"). The information contained in this report shall only be disclosed under the permission of relevant laws, regulations and rules and for the sole purpose of providing information and shall not constitute any advertisement. The material, comment and forecast (if any) contained in this report merely reflects Company's situation or opinion at the date of initial disclosure of this report. Company may revise the information contained in this report and suggest investors to independently pay attention to related updates or amendments. This report may contain some forward-looking statements. Such statements are the description, analyzing or prospect of Company employees with respect to Company or relating industries. Company makes no promise or guaranty that the contents of such statements will be consistent with Company or relating industries future performance. 23