Aiming at the future performance of the domestic IC design factory MediaTek , the latest research report by American foreign capital with the title "bad news gone, good news come" stated that MediaTek is still weak in domestic smartphones, even in the third quarter. There may be unfavorable financial forecasts, but under the stimulus of a healthy pricing environment and the expected entry into Apple’s Apple Watch supply chain, MediaTek is given an investment rating of “better than and ” with a target price of per share NT$880. According to the
report, MediaTek’s revenue in the third quarter of 2022 is expected to decline by 10% compared to the second quarter. This is because although the shipments of the Chinese mobile phone market turned positive in June, it is expected that the annual mobile phone shipments in 2022 will still decline by 10% to 15% compared with the previous year. Especially during the 618 promotion period, when the sales situation is not good, the inventory will still be adjusted in the second half of the year. Under such circumstances, it is expected that MediaTek’s revenue in the third quarter will decline by 8% to 12%, and its gross profit margin will fall between 48% and 50%, which is lower than market expectations. Under such circumstances, MediaTek may have to lower its annual revenue growth target of 20%, which is estimated to fall at 16%.
Although the market conditions are weak, the report emphasizes that this will maintain a healthy pricing environment for MediaTek and Qualcomm , and there is no need to lower prices to grab the market. Among them, there is market news that Qualcomm is canceling the price discount of the new chips, which means that its competition against MediaTek will no longer be responded to by price wars. Moreover, because both MediaTek and Qualcomm use TSMC's wafer foundry services. In the face of TSMC’s increase in wafer prices due to rising costs, MediaTek has the opportunity to pass on the price increase to customers. This is a surprise brought by MediaTek’s 2023 shipment price due to its stable growth. The
report emphasizes that rumors that MediaTek has entered the Apple Watch should be true. Although there is also a baseband chip R&D team within Apple that is developing related products, but as far as the Apple Watch only needs 4G baseband chips, it is believed that adopting a more mature product will be the best choice. Therefore, based on the above news, after believing that MediaTek’s stock price has been undervalued recently, the foreign investor gave MediaTek an investment rating of “outperform” and a target price of NT$880 per share.
