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Adnaan Ahmad
Analyst +44 20 3207 7851 adnaan.ahmad@berenberg.com
Jean Beaubois
Specialist Sales +44 20 3207 7835 jean.beaubois@berenberg.com 29 November 2012 Technology Hardware
Tammy Qiu
Analyst +44 20 3465 2673
tammy.qiu@berenberg.com
Daud Khan
Analyst +44 20 3465 2638
daud.khan@berenberg.com
Ali Khwaja
Analyst +44 20 3207 7852
ali.khwaja@berenberg.com
Sebastian Grabert
Analyst +44 20 3207 7834
sebastian.grabert@berenberg.com
For our disclosures in respect of section 34b of the German Securities Trading Act (Wertpapierhandelsgesetz WpHG) and our disclaimer please see the end of this document. Please note that the use of this research report is subject to the conditions and restrictions set forth in the disclosures and the disclaimer at the end of this document.
Table of contents
10 for 13 Prediction #1: Wireless semi industry goes through further consolidation and potential exits Prediction #2: Intel licenses ARMs Cortex technology Prediction #3: Samsung goes captive in modems Prediction #4: Apple launches a MacBook AIR with iOS functionality Prediction #5: Telco infrastructure industry will undergo further restructuring, exits and consolidation Prediction #6: Huawei signs an enterprise distribution agreement with IBM Prediction #7: Handset industry sees further exits, M&A and restructuring Prediction #8: Apple to launch tailored mini iPhone in mid2013 Prediction #9: Windows 8 and Windows Phone 8 stutter Prediction #10: Apple launches smart TVs in H213 What is working ARM Imagination Infineon STM MediaTek Samsung HTC Cisco Ericsson Juniper Alcatel-Lucent Hon Hai Catcher Foxconn Technology What is not working Motorola Solutions Apple RIM TPK Foxconn International ZTE Qualcomm Nokia Price target and valuation changes Disclosures in respect of section 34b of the German Securities Trading Act (Wertpapierhandelsgesetz WpHG) Contacts: Investment Banking 4 8 10 11 12 13 15 16 18 20 22 23 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 37 38 39 40 41 42 43 44 45 46 53
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10 for 13
We have already discussed our framework for global technology
hardware stocks over the past three years in our tech titans and battle of the ecosystems themed notes. We are not erring from these themes, and we still believe that street estimates do not take into account the earnings cliff effect when companies are structurally impaired.
ARM, Apple and Samsung remain our only Buy-rated stocks. We
Apple Buy Closing price: USD 589.5 PT:USD 800.00 26/11/2012 NASDAQ Close Samsung Buy
Closing price: KRW 1,404,000 PT:KRW 1,650,000
make no recommendation changes in this note. We keep our bearish view intact (16 Sell-rated stocks: Nokia, STM, Alcatel-Lucent, Imagination, Cisco, Juniper, MediaTek, HTC, Motorola Solutions, ZTE, Qualcomm, Ericsson, Foxconn Tech, Foxconn International, TPK and Research in Motion) and maintain our cautious views on Infineon, Hon Hai and Catcher (all Hold-rated). We have no idea if QE3 is going to lead to QE4, or how the sovereign debt crisis in Europe is going to play out in 2013, or whether China will hard or soft land, or whether the US will shift to a deficit reduction policy. There are just too many uncertainties and unknowns for even the best macro-professionals to predict. So we have stuck to what we know (or think we know!) our industry and its structural dynamics. And so we lay out 10 predictions for 2013.
Our intent in this note is to provide a framework for assessing which
stocks to back and which ones to avoid if our predictions are to bear fruit. For example, we highlight that Intel has big choices to make in the next 18 to 24 months if a) it continues along its current path to use its manufacturing advantage and financial arsenal to try to catch up with the ARM ecosystem, b) it licenses ARMs Cortex platform, leveraging this technology with its manufacturing capabilities to compete on more equal terms with Qualcomm and Nvidia in the mobile processor market, and/or c) it starts to offer its manufacturing advantage as a service i.e. become a foundry for third-party vendors. All three roads lead to a change in its margin profile, in our view, with option b) extremely positive for ARM.
We also discuss how we think 2013 will lead to further industry
rationalisation in wireless semiconductors, handsets and infrastructure. We have already seen signs of this with ZTE and AlcatelLucent paring back product and regional strategies in the infrastructure market, Texas Instruments de-emphasising applications processors and MediaTek acquiring M-Star; and in handsets, with Apple and Samsung combined accounting for over 100% of industry profits. Mid-term, Qualcomm (in wireless semis) and Ericsson and Huawei (in infrastructure) are the winners, but the journey there is going to be long and volatile with margin pain. In addition, Apple, Samsung and China Inc should continue to dominate the handset space in the next 18 months.
Finally, as we first stated in our Apple and Pairs (Part 2) note in mid-
(Old: KRW 1,450,000) 26/11/2012 Korea Stock Exchange Close ARM Holdings Buy Closing price: GBP 7.4 PT: GBP 10.0 (Old: GBP 7.2) 26/11/2012 London Close Infineon Hold Closing price: EUR 5.8 PT: EUR 6.0 26/11/2012 XETRA Close Hon Hai Hold Closing price: TWD 92.8 PT: TWD 80.0 26/11/2012 Taiwan Close Catcher Hold Closing price: TWD 144.5 PT: TWD 150.0 26/11/2012 Taiwan Close Qualcomm Sell Closing price: USD 62.5 PT: USD 50.0 26/11/2012 NASDAQ Close Imagination Sell Closing price: GBP 4.2 PT: GBP 3.6 (Old: GBP4.0) 26/11/2012 London Close Ericsson Sell Closing price: SEK 59.9 PT: SEK 51.0 (Old: SEK 53.0) 26/11/2012 Stockholm Close Cisco Sell Closing price: USD 19.1 PT: USD 14.0 26/11/2012 NASDAQ Close Motorola Solution Sell Closing price: USD 54.6 PT: USD 40.0 26/11/2012 New York Close MediaTek Sell Closing price: TWD 325.0 PT: TWD 210.0 26/11/2012 Taiwan Close Foxconn Tech Sell Closing price: TWD 99.5 PT: TWD 85.0 26/11/2012 Taiwan Close TPK Sell Closing price: TWD 436.5 PT: TWD 320.0 26/11/2012 Taiwan Close STMicro Sell Closing price: EUR 4.6 PT: EUR 3.5 26/11/2012 Paris Close ZTE Sell Closing price: HKD 11.5 PT: HKD 8.5 26/11/2012 Hong Kong Close Foxconn Intl Sell Closing price: HKD 4.0 PT: HKD 3.0 (Old: HKD 2.0) 26/11/2012 Hong Kong Close Juniper Sell Closing price: USD 16.8 PT: USD 14.0 26/11/2012 New York Close Alcatel-Lucent Sell Closing price: EUR 0.9 PT: EUR 0.7 26/11/2012 Paris Close HTC Sell Closing price: TWD 251.0 PT: TWD 150.0 26/11/2012 Taiwan Close RIMM Sell Closing price: USD 12.0 PT: USD 5.0 26/11/2012 NASDAQ Close Nokia Sell Closing price: EUR 2.7 PT: EUR 1.5 26/11/2012 Helsinki Close
2011, given our negative stance on most stocks in our coverage universe on an absolute basis, we highlight certain pair trades and their performance since inception and in the last quarter. We keep these trades on, and to date they have performed very well. In this note, we also assess, as always, what is working and what is not from a stock perspective. Our detailed, updated models for each company are available on request.
29 November 2012
Adnaan Ahmad
Analyst +44 20 3207 7851 adnaan.ahmad@berenberg.com
Jean Beaubois
Specialist Sales +44 20 3207 7835 jean.beaubois@berenberg.com
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Pair between inception inceptionand and 23/11/2012 Pair trades-return trades-return between 23/11/2012
Long Incepted in Sep 2011: AAPL QCOM CSCO ERIC QCOM IFX ARM AAPL AAPL ERIC Incepted in Jun 2012: Samsung Samsung ARM TPK CATCHER HTC NOK IMG FIH TPK 47.1% -1.3% 61.4% -13.6% -46.1% HTC MTK JNPR ALU STM STM STM NOK RIMM ZTE 116.6% 10.9% 39.7% 49.2% 11.5% -3.7% 22.4% 86.8% 112.8% 31.6% Short Return
Pair between 03/09/2012 03/09/2012 and 23/11/2012 Pair trades-return trades-return between and 23/11/2012
Long AAPL QCOM CSCO ERIC QCOM IFX ARM AAPL AAPL ERIC Samsung Samsung ARM TPK CATCHER Short HTC MTK JNPR ALU STM STM STM NOK RIMM ZTE HTC NOK IMG FIH TPK Return -9.1% 5.4% 4.8% 0.0% 2.7% 10.2% 39.5% -35.8% -90.8% -19.3% 24.2% -2.5% 70.7% -56.8% -13.3%
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9.2 10 Cisco ($) ## ## Motorola Solutions ($) 11 ## ## MediaTek (TWD) 12 ## ## 13 Foxconn Tech ## (TWD) ## 14 TPK (TWD) ## 15 STMicro () ## ## 16 ZTE (HKD) ## 17 Foxconn Intl ## (HKD) ## 18 Juniper ($) ## ## 19 Alcatel Lucent ()
Sell
14.0
19.1
-27%
9.6
Sell
40.0
54.6
-27%
14.9
Sell
210.0
325.0
-35%
16.7
Sell
85.0
99.5
-15%
11.6
Sell
320.0
436.5
-27%
9.8
Sell
3.5
4.6
-24%
42.1
Sell
8.5
11.5
-26%
19.1
Sell
To From
4.0
-26%
n/a
Sell
16.8
-17%
15.0
Sell
0.7
0.9
-22%
n/a
Sell
150.0
251.0
-40%
15.0
Sell
5.0
12.0
-58%
n/a
Increase in competitive intensity in US market. New BB10 platform not a game changer. Playbook dying a slow death Services revenues to come under attack Lumia - too little too late. NSN in harvest mode a positive. Samsung + Android (China Inc) big threat to Nokia's mid-to-low-end emerging market position
Sell
1.5
2.7
-44%
n/a
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Prediction #1: Wireless semi industry goes through further consolidation and potential exits
The winners: Samsung, Qualcomm and MediaTek (but long-term) The losers: ST-Ericsson, Renesas, Marvell, Broadcom and Spreadtrum
The wireless semi industry is not becoming any less competitive. ST-Ericsson is struggling to survive (~$400m quarterly revenue run-rate and $100m-150m operating losses), even after its restructuring earlier this year. Qualcomm is in takemarket-share mode. Broadcom (with Samsung and Nokia exposure), Marvell (TDS-CDMA chips and Research in Motion), Renesas (Nokia and Japanese), Intel/Infineon (Samsung and Nokia low-end), Nvidia, Advanced Micro Devices (AMD), FreeScale, MediaTek/M-Star, Spreadtrum, RDA/Coolsands and HiSilicon (Huaweis in-house semi team) are all competing to win business in wireless semis. Texas Instruments has decided to de-emphasise the wireless vertical. Wireless semi R&D ($bn)
3.0 2.5 2.0 1.5 1.0 0.5 0.0
Intel+Infineon ST-Ericsson Mediatek Qualcomm Broadcom Marvell Renesas Spreadtrum instruments Texas Nvidia
Scale is important, given the R&D needed to invest in next-generation technologies, integration and processes. However, the bigger issue is that Apple and Samsung are also important captive vendors. Apple has its A series chips, which it deploys on the iPad and iPhone. We think that this could also shift to its Mac line-up in the next 24 months, as described above. In addition, the patent battles between Samsung and Apple are leading to a rethink in the foundry relationship between the two vendors. We think that Apple has already given the nod and wink to Taiwan Semiconductor Manufacturing Company (TSMC) to start build-out of capacity to transition Apples internal A series line over to TSMC in the next 24 months. A precursor to this is that TSMC has decided not to hike its dividend in the near term. This leaves Samsung with a gaping hole in capacity to fill, given that Apple ships 150m-200m iPhones and 60m-80m iPads annually and that the Samsung chips which go into its own products only account for 35% of capacity currently. We think that Samsung will a) start to waterfall down its Exynos chip platform to the mid- and low-end over time, b) aggressively start to build more modems inhouse as per its recently launched home-grown modem with HSPA and LTE
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functionality, and c) open up to act as a foundry to other third-parties, such as its recent deal with STMicroelectronics. Long-term, if this strategy proves to be a success, there is no reason why Samsung would not push into the merchant wireless semi market, further increasing competitive intensity. Samsung is very good at making chips that go into its own products and then selling them on to the merchant market it has done this in DRAM and NAND memory and in the nonsemi world in LCD/display technologies. This is not good news at all for the industry. As stated above, we have already seen Texas instruments de-emphasise its apps processor portfolio relevant to the wireless segment. MediaTek has joined forces with its former foe, M-Star. ST-Ericsson has shunted its application processor business back up to its parent, STMicroelectronics. There will be more restructurings, JVs and exits in 2013. Qualcomm is calling for its margins to improve in 2013 to the 19-20% range from 16% last quarter, driven by higher ASPs on its modems and efficiencies and yield improvements at 28nm. But it is still in take share mode, as is MediaTek, which will deliver quad-core products in H113. The Chinese smartphone market is growing strongly as telcos subsidise, users upgrade to 2G and 3G smartphones and vendors entice with a plethora of very good Android-based products. Spreadtrum and RDA (Coolsands) will also join this volume growth party during 2013, but this is not going to be good for pricing. However, it begs the question: what is the future of Marvell in wireless semis? Its CFO has recently resigned, and its TDS-CDMA presence is waning, given upcoming products from Qualcomm, MediaTek and Spreadtrum, which all have a lower cost structure and greater scale. In addition, its former prized customer Research in Motion, is in transition, and even if its BB10 software platform starts to gain traction, it is probably going to be with Qualcomm chips inside. The recent announcement that Intels CEO will retire in May 2013 is also, in our view, a direct result of its absence from any serious debate in the wireless chip world. As we describe in Prediction #2 (see next page), Intel has a few choices to make. Broadcom, through its Beceem acquisition, should have integrated solutions out in H113 and Nvidia should also have similar products out through the Icera deal in the same timeframe. We think that Renesas will de-emphasise the application processor business and focus on the strength of its single die-based modem/baseband.
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Prediction #5: Telco infrastructure industry will undergo further restructuring, exits and consolidation
The winners: Telcos The losers: Ericsson, Huawei, Nokia-Siemens, ZTE and AlcatelLucent
As we stated in our infrastructure industry initiation back in January 2010, there is too much capacity in this industry, even though we have had Ericsson-MarconiRedback-Nortel-LG Electronics, Alcatel-Lucent-Nortel and Nokia-SiemensMotorola deals. In the last 10 years, first Huawei and then ZTE leveraged government and bank funding to gain market share. Huawei is aiming to increase its revenues from $25bn today to $100bn by 2020. ZTE had until recently been the price spoiler, with DSOs in the 200-day range and negative cash margins for its Networks business, but recently it has started to focus on profitability as well as on certain geographic regions (Asia-Pacific and Latin America) for its networks wares. Similarly, Alcatel-Lucent is retrenching from certain regions/products, but the major issue confronting the Franco-American behemoth is its very existence as a going concern. It is losing money, not generating sufficient cash, has a weak balance sheet and a ~2bn under-funded pension. On the flip side, Samsung wants to be a top three LTE infrastructure supplier by the end of 2015 through organic growth and leveraging its end-to-end solutions from chipsets through to base stations and smartphones. Samsung has won deals with Sprint, KDDI and 3UK (which could act as a beachhead into other European telcos) in South Korea and the Middle East. The 3UK deal is the most interesting as it is Samsungs first network deal in Europe and Samsung was very aggressive on price i.e. as ZTE leaves its price spoiler tag behind, Samsung has been picking up the baton. Nokia-Siemens impressive margin improvement to the 9% level in Q312 could also give it ammunition to be more price-aggressive than it has in the last two years, placing further pressure on industry structure. Hence, given industry overcapacity, (still) coupled with slower end-market dynamics due to operator consolidation and macro concerns, we predict that 2013 will bring further exits and/or consolidation in the industry. We have always thought that the Chinese should acquire Nokia Siemens Networks (NSN) or Alcatel-Lucent assets for their installed base, customer relationships and most importantly services/maintenance expertise. The issues here are a) political/security concerns on such deals, and b) whether or not Asian vendors have learnt from the BenQ-Siemens debacle i.e. if Asian vendors acquire these assets, they would want cash-in from the acquired parties and government-backed guarantees that they can reduce headcount drastically. The alternative solution is a European solution i.e. an Alcatel-Lucent-NSN combination. What a mess that would be! But it would also be good news for the rest of the industry. The key question really is what is the end-game for AlcatelLucent and NSN. NSN management continues to talk about a potential exit via an IPO. We just do not know who would want to touch that paper, and yes, its all about price, but if investors want exposure to wireless infrastructure they can gain that via the global leader in Ericsson. On Alcatel-Lucent, 2013 is likely to be the year in which the company continues to try to offload assets to shore up its balance sheet. We believe its submarine, enterprise and vertical industry businesses are up for sale, but these three are
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unlikely to fetch more than 750m-1bn combined. Another option for the company is to file for voluntary bankruptcy (a last resort): this would enable the company to then stop paying creditors, given the 837m debt maturing in 2013, the 462m in 2014 and the 1bn in 2015. In doing so, the company could then try to crystallise value for some of its parts. A less radical option is to use some of the companys assets as collateral for new financing. The question here is, str ucturally, will this refinancing solve the companys revenue and margin profile prospects? We think not. Alcatel-Lucent needs to earn a 6-7% operating margin to be cashflow-neutral. The street estimates 1% for 2013.
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Prediction #7: Handset industry sees further exits, M&A and restructuring
The winners: Apple and Samsung The losers: Research in Motion, Nokia, HTC, LG Electronics, Sony Mobile, MMI (Google), Japan Inc and ZTE
Over the last 20 years, the handset industry has grown to a 1.8bn-unit shipment market per year (or a $225bn market size in revenue terms). However, during this time, there has been much turbulence, with market shares shifting on the back of new product cycles. Back in the early 1990s, Ericsson was the global leader, in the mid-1990s this shifted to Motorola and by the late 1990s, Nokia was dominant. In the early 2000s, Samsung started to gain share on the back of its clamshell and colour phones, followed by Motorola with the RAZR in the mid-2000s. And in the last few years, Apple and (more recently) Samsung have been dominant. At the same time, we have witnessed consolidation, restructuring and exits from the industry. Sony and Ericsson came together 10 years ago and in late 2011 Sony announced its intention to acquire the 50% Ericsson stake in the JV. Philips, Alcatel, Nortel, Lucent, Siemens, BenQ, Palm, Sanyo, Mitsubishi, Pantech, Benefon, Motorola Mobility, Dell and HP have all tried unsuccessfully to sustain positions in this market. In our initiation on the sector in January 2010, we stated that Palm, Research in Motion, Nokia, HTC, Motorola, SonyEricsson and LG Electronics would all be losers in the mid- to long term, given Apples vertical integration model soaking up more than 50% of industry profits and the horizontalisation of the handset industry on the back of Googles Android platform translating into structurally low-margin hardware similar to the PC industry, especially with the advent of Chinese handset OEMs using the Android platform and their competitive price structures. This thesis is playing out but the big curve ball that we did not foresee was a potential Amazon-based smartphone portfolio based on a loss-making hardware strategy, which could still be on the cards for 2013 entry, but is very dependent on sales of the Kindle Fire in the next six to 12 months. We expect the weak to become weaker. HTC margins are already guided to 1% from the mid-teen levels of only a year ago. Nokia continues to lose share in smartphones, but there is still hope that its new Windows Phone 8 products can turn the tide slowly back into its favour. The bigger issue that confronts the company is how will it turn the tide in the mid- to low-end portfolio versus cheap Android smartphones developed and aided by reference designs from Qualcomm and MediaTek? As we have stated before, Research in Motion is becoming increasingly irrelevant, and we do not think that its new BB10 software platform in H113 will change that drastically at all. Yes, there may be some upgrades and some hope, but structurally it is a hope trade that is driving the rebound in its and Nokias share price, in our view. LG Electronics has lost scale but has some decent new products to give it another quarter or two of breathing space. MMI (Google) has some product, but up against the might of Apple and Samsung, it is also losing relevance. Sony Mobile is bleeding red and management is refocusing the portfolio and its channel to market strategy. ZTEs margins are low single-digit given its push to win business with international operators and Lenovo is still losing money in its smartphone business but has definitely gained traction with vendors such as Tianyi, Oppo, XiaoMi and Huawei in its home market.
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There is also a shift in business models by certain vendors. Amazon is likely (as stated above) to enter the smartphone space with its hardware-at-a-loss strategy. In China, Tencent, Baidu and others are leveraging this model as they have internet service revenues to cross-subsidise. But with most handset vendors globally either losing money or only slightly breaking even, the future is not bright. Apple and Samsung account for ~50% of smartphone volumes and over 100% of industry profits.
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every additional 50m units sold would add approximately 5% to Apples earnings. But this does not assume any substitution effect. If one in five potential Apple iPhone purchasers decide to buy the mini versus the iPhone, then that would mean that Apple would need to sell 85m-86m minis annually for this to be earningsneutral. In a bullish scenario, with a 20% substitution rate and 250m minis sold annually, earnings should be 15-20% higher than we are currently modelling. In this scenario, there would be 150m iPhones sold, hence a total volume of ~400m (iPhones plus minis) in a smartphone unit base of 1.3bn, i.e. a 30% market share in unit terms.
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backward compatibility to legacy applications. Intel has an Ivy Bridge chip inside that is its laptop chip in tablet form factor! Hence, it is going to be heavier, need more power and an extra fan! It will also be more expensive, given that Intels chip costs ~$100 versus the ARM-based solutions in the $20-25 range. Second, the Windows RT, powered by ARM, will not be backward-compatible to all the software that has been written historically on Windows platforms, and it will not even support Outlook in its initial version. Hence, we do not think it is going to gain much corporate traction. We think the recent departure of Steven Sinofsky (Microsofts software guru) has to be related with early disappointment at the acceptance of this platform. At the same time, the Windows Phone 8 is now out in the market, with decent product from Nokia and HTC. The question is, are they too late to the party? Once again, key for us is what does Samsung do with its Windows Phone 8 platform offering? The issue for Samsung is that it commands a share of between 50-60% in the Android smartphone market globally, which is approximately 50m units+ from Samsung on a quarterly basis versus probably less than 4m total Windows Phones sold each quarter. If Samsung moves aggressively to the Windows Platform, then that will aid the platforms development as more volumes translates into more developer interest and better applications. We just think that the Apple-Samsung IPR spat is going to be resolved (as all these suits are) at a point in time, and that Samsungs economies of scale in Android and the lead and leverage it has in key components will mean that Windows Phone 8 is just a hedge opportunistic, not strategic.
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What is working
ARM
Drivers PD ( '000) Licence revenues Royalty revenues PIPD ( '000) Licence revenues Royalty revenues Group Revenues ( '000) Gross margins (IFRS) Gross margins (ex. special items) Gross margin (ex. special items ex. SBC) R&D (ex. special items) R&D (as % of sales) SG&A (ex. special items) SG&A (as % of sales) Operating margin (IFRS) Operating margin (ex. special items ex. SBC) Operating margin (ex. special items) EPS (IFRS) (pence) EPS (ex. special items ex SBC) (pence) EPS (ex. special items) (pence) Other Financials FCF ( '000) Capex ( '000) Working capital ( '000) Working capital as % of sales DSO DSI DPO Total assets ( '000) Net debt ( '000) Source: Berenberg Bank estimates Source: Berenberg Bank estimates 170,896 6,036 31,098 7.6% 94.7 25.0 60.3 1,084,662 -275,101 181,696 12,112 11,235 2.3% 88.8 32.5 114.2 1,299,790 -345,891 177,655 32,977 5,644 1.0% 84.2 21.0 78.9 1,361,860 -337,142 256,860 24,008 8,670 1.3% 84.0 26.0 80.0 1,638,397 -587,404 298,614 15,785 7,461 0.9% 84.0 26.0 75.0 1,906,431 -823,720 391,104 18,850 9,213 1.0% 84.0 26.0 75.0 2,276,341 -1,152,527 407,290 94.0% 94.0% 93.5% 132,765 32.6% 125,330 30.8% 26.3% 40.3% 26.3% 6.39 9.45 7.17 491,826 95.1% 95.1% 94.4% 153,663 31.2% 146,481 29.8% 30.3% 45.1% 30.3% 8.66 13.16 9.49 561,570 95.0% 95.0% 94.7% 157,239 28.0% 152,747 27.2% 38.2% 45.7% 38.2% 12.00 14.98 12.48 684,402 95.2% 95.2% 95.0% 177,944 26.0% 164,256 24.0% 44.4% 50.4% 44.4% 18.35 21.30 18.80 809,494 95.8% 95.8% 95.6% 206,421 25.5% 190,231 23.5% 46.1% 51.2% 46.1% 22.10 25.05 22.55 966,658 96.0% 96.0% 95.8% 231,998 24.0% 202,998 21.0% 50.4% 54.7% 50.4% 28.64 31.60 29.10 26,645 28,323 31,200 30,200 31,962 34,494 32,911 34,810 33,544 35,443 34,810 37,342 107,613 188,065 149,300 222,200 172,152 261,570 202,532 353,389 221,519 457,595 250,000 581,215 2010 2011 2012E 2013E 2014E 2015E
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Imagination
Drivers Royalty revenues Revenues (m) Licensing revenues Revenues (m) Total units & ASPs Total units ASPs Group Revenues (m) Gross margins R&D (m) R&D (as % of sales) SG&A (m) SG&A (as % of sales) Operating margin (reported) EPS (reported) EPS (adjusted) Other Financials FCF (m) Capex (m) Working capital (m) Working capital as % of sales Days receivables Days payable Days in inventory Total assets (m) Net debt/(cash) (m) Source: Berenberg Bank Estimates Source: Berenberg Bank estimates 8 1 14 16.9% 93 174 73 81 (28.9) (22) 12 16 16.5% 103 309 109 175 (43.8) 17 12 20 15.8% 118 458 94 213 (60.7) 36 14 20 13.0% 110 440 92 251 (89.9) 38 14 22 12.5% 110 440 92 291 (119.8) 44 14 24 12.0% 110 440 92 334 (155.5) 81 69.1% 35 43.7% 10 12.9% 12.5% 5.99 7.44 98 78.8% 45 45.6% 16 16.6% 16.6% 7.47 10.44 127 83.5% 60 46.8% 18 14.5% 22.2% 7.93 11.93 153 82.0% 74 48.0% 24 15.5% 18.5% 8.24 12.12 177 81.5% 85 48.0% 28 15.7% 17.8% 9.18 13.06 204 81.0% 98 48.0% 33 16.0% 17.0% 10.06 13.94 126 0.19 245 0.17 325 0.20 426 0.20 519 0.20 619 0.20 23 28 34 40 44 48 24 41 64 83 102 122 FY2010 FY2011 FY2012 FY2013E FY2014E FY2015E
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Technology Hardware
Infineon
Drivers Automotive Revenues ( m) Operating margin (reported) Industrial Power Control (IPC) Revenues ( m) Operating margin (reported) Power management & Multimarker (PMM) Revenues ( m) Operating margin (reported) Chip card and Security Revenues ( m) Operating margin (reported) Group Revenues ( m) Gross margins (reported) R&D ( m) R&D (as % of sales) SG&A ( m) SG&A (as % of sales) Operating margin (reported) EPS (reported) (from continuing ops) Other Financials FCF ( m) Capex ( m) Working capital ( m) Working capital as % of sales Days receivables Days in inventory Days payable Total assets ( m) Net debt/(cash) (inc. pension liab) ( m) Source: Berenberg Bank estimates Source: Berenberg Bank estimates 650 322 536 16.3% 76 91 118 4,993 (1,331) 407 845 365 9.1% 54 79 115 5,873 (2,387) (189) 832 484 12.4% 50 84 92 5,898 (1,940) 183 659 408 11.6% 50 84 94 5,998 (1,973) 437 527 422 12.1% 52 80 92 6,087 (2,079) 634 418 420 11.9% 52 80 92 6,338 (2,366) 3,295 37.5% 399 12.1% 386 11.7% 10.6% 0.27 3,997 41.4% 399 10.0% 386 9.7% 18.4% 0.60 3,904 36.6% 455 11.7% 475 12.2% 11.7% 0.38 3,514 31.5% 415 11.8% 404 11.5% 7.1% 0.17 3,482 33.5% 331 9.5% 338 9.7% 13.2% 0.33 3,521 35.0% 352 10.0% 352 10.0% 13.9% 0.35 407 5.4% 428 12.6% 457 12.3% 480 10.0% 504 14.0% 529 15.0% 0.0% 0.0% 929 15.3% 873 8.0% 847 15.0% 847 16.0% 0.0% 0.0% 728 16.2% 604 5.0% 574 15.0% 557 16.0% 1,268 15.6% 1,552 18.0% 1,660 13.1% 1,557 6.5% 1,557 12.0% 1,588 12.2% 2010 2011 2012 2013E 2014E 2015E
25
Global Technology
Technology Hardware
STM
Drivers APG Revenues ($ m) Operating margin (reported) AMM Revenues ($ m) Operating margin (reported) Wireless Revenues ($ m) Operating margin (reported) Group Revenues ($ m) Gross margins (reported) Gross margins (adjusted) R&D (ex. special items) R&D (as % of sales) SG&A (ex. special items) SG&A (as % of sales) Operating margin (reported) Operating margin (adjusted) EPS (reported) EPS (adjusted) EPS (reported) () EPS (adjusted) () Other Financials FCF ($ m) Capex ($ m) Working capital ($ m) Working capital as % of sales DSO DSI DPO Total assets ($ m) Net debt/(cash) (incl. pension liab) ($ m) Source:Berenberg Berenberg Bank estimates Source: Bank estimates 760 1034 1,494 16.5% 50 85 71 13,349 (925) (180) 1060 1,921 19.7% 39 89 39 12,094 (439) 252 598 1,655 19.8% 42 89 45 10,998 (891) 364 600 1,641 19.7% 42 91 48 11,839 (2,204) 382 550 1,701 19.2% 42 90 48 13,493 (1,401) 520 500 1,817 19.2% 42 90 48 13,000 (1,921) 9,049 30.0% 30.0% 2,350 26.0% 1,174 13.0% -9.1% -7.9% -0.51 -0.11 -0.38 -0.08 9,735 36.7% 32.7% 2,351 24.1% 1,210 12.4% -3.5% -2.8% 0.29 -0.02 0.21 -0.01 8,350 33.2% 33.2% 2,380 28.5% 1,119 13.4% -7.7% -7.7% 0.01 -0.36 0.01 -0.29 8,343 32.0% 32.0% 2,378 28.5% 1,035 12.4% -7.9% -7.9% 0.04 0.06 0.03 0.04 8,853 35.0% 35.0% 2,479 28.0% 1,151 13.0% -5.1% -5.1% 0.26 0.28 0.18 0.19 9,458 35.0% 35.0% 2,459 26.0% 1,229 13.0% -3.2% -3.2% 0.42 0.44 0.29 0.30 2,220 -21.8% 1,552 -52.4% 1,335 -62.0% 1,268 -55.0% 1,268 -55.0% 1,306 -50.0% 2,663 20.8% 2,974 19.6% 3,063 12.5% 3,124 12.0% 3,374 11.0% 3,644 11.0% 4,107 10.0% 3,534 9.9% 1,560 8.9% 1,622 8.3% 1,768 8.5% 1,945 8.5% 2010 2011 2012E 2013E 2014E 2015E
26
Global Technology
Technology Hardware
MediaTek
Drivers Group Revenues (TW$m) (GAAP) 113,522 86,858 105,265 119,329 138,375 172,797 2010 2011 2012E 2013E 2014E 2015E
53.7%
45.3%
41.3%
40.0%
38.0%
38.0%
R&D (TW$m) R&D (as % of sales) SG&A (TW$m) SG&A (as % of sales) Operating margin (GAAP) EPS (GAAP) Other Financials FCF(TW$m) Capex(TW$m) Working capital(TW$m) Working capital as % of sales(TW$m) Days receivables Days in inventory Days payable Total assets(TW$m) Net Cash (TW$m)
27
Global Technology
Technology Hardware
Samsung
Drivers Revenue(won bn) Semiconductor DP IM Digital media Smartphones Units in million ASP($) Operating Margin in % Semiconductor DP IM Digital media Group Group Revenues(won bn) Gross margins R&D (won bn) R&D (as % of sales) SG&A (won bn) SG&A (as % of sales) Operating margin EPS EPS - diluted Other Financials FCF(won bn) Capex(won bn) Working capital (won bn) Working capital as % of sales(won bn) 2,206 -21,621 7,408 4.8% 150 -21,963 9,989 6.1% 10,850 -24,287 15,916 7.9% 18,468 -22,171 22,310 9.2% 13,497 -29,994 29,165 10.5% 17,906 -32,169 32,656 10.7% 154,630 33.6% 9,099 5.9% 26,243 17.0% 11.2% 106,577 105,755 165,002 35.9% 9,391 5.7% 26,493 16.1% 14.5% 96,386 95,645 202,728 37.0% 12,164 6.0% 35,275 17.4% 14.0% 162,175 160,937 242,976 37.3% 14,579 6.0% 42,764 17.6% 14.0% 202,310 200,766 277,722 35.5% 15,275 5.5% 46,102 16.6% 13.7% 218,910 217,239 306,369 35.0% 16,850 5.5% 50,857 16.6% 13.2% 233,356 231,575 26.8% 6.7% 10.6% 0.8% 26.5% 4.4% 8.4% 0.1% 14.0% 9.0% 19.2% 4.0% 15.0% 9.5% 19.5% 2.0% 12.0% 8.0% 18.0% 4.0% 12.0% 8.0% 18.0% 4.0% 24 343 98 304 218 309 314 287 424 264 572 232 37,640 29,912 40,830 57,613 36,993 29,232 55,545 59,004 35,180 33,892 108,138 46,532 38,662 35,083 142,623 46,608 43,211 36,866 168,061 49,583 45,103 37,056 191,623 52,587 2010 2011 2012E 2013E 2014E 2015E
Days receivables Days in inventory Days payable Total assets(won bn) Net Cash (won bn)
45 48 33 134,289 13,416
48 54 34 155,631 13,541
48 62 38 186,462 23,792
47 59 33 224,726 36,028
47 58 33 247,280 50,102
47 55 33 267,445 64,974
28
Global Technology
Technology Hardware
HTC
Drivers Global smartphone market (m units) HTC market share Handsets Units shipped (m) ASP (NT$) Revenues (NT$ m) Group Revenues (NT$ m) Gross margins R&D (NT$ m) R&D (as % of sales) SG&A (NT$ m) SG&A (as % of sales) Operating margin EPS Other financials FCF (NT$ m) Capex (NT$ m) Working capital (NT$ m) Working capital as % of sales Days receivables Days in inventory Days payable Total assets (NT$ m) Net debt (NT$ m) 41,057 4,991 24,895 8.9% 82 49 120 190,382 75,355 80,096 8,411 15,127 3.2% 50 31 84 254,592 90,656 2,000 6,140 5,998 2.2% 49 30 85 174,881 52,681 3,008 3,682 4,966 2.1% 46 30 79 174,423 60,298 4,800 2,692 3,201 1.5% 47 29 80 173,724 65,098 (191) 1,801 2,728 1.5% 45 31 78 167,273 64,907 278,761 30.1% 12,940 4.6% 26,796 9.6% 15.8% 47.89 465,795 28.3% 15,961 3.4% 47,049 10.1% 14.8% 73.76 274,175 24.6% 13,709 5.0% 36,191 13.2% 6.4% 19.19 235,739 21.5% 14,144 6.0% 30,646 13.0% 2.5% 7.06 207,044 19.0% 10,352 5.0% 24,845 12.0% 2.0% 5.20 180,074 17.0% 9,004 5.0% 21,609 12.0% 0.0% 0.81 24.6 11,003 270,680 45.5 10,000 455,000 29.6 9,000 266,175 27.2 8,370 227,739 25.0 7,952 199,044 22.8 7,554 172,074 2010 281 8.8% 2011 461 9.9% 2012E 603 4.9% 2013E 911 3.0% 2014E 1,200 2.1% 2015E 1,400 1.6%
29
Global Technology
Technology Hardware
Cisco
Drivers Product Revenues($m) YoY growth Service Revenues($m) YoY growth Group Revenues ($m) (GAAP) YoY growth Gross margins 43,218 7.9% 63.3% 46,061 6.6% 62.4% 47,800 3.8% 62.1% 48,200 0.8% 61.3% 48,700 1.0% 60.4% 8,692 5.6% 9,735 12.0% 9,950 2.2% 10,300 3.5% 10,500 1.9% 34,526 6.5% 36,326 5.2% 37,850 4.2% 37,900 0.1% 38,200 0.8% 2011 2012 2013E 2014E 2015E
R&D ($m) R&D (as % of sales) SG&A ($m) SG&A (as % of sales) Operating margin (GAAP) Operating margin (adj. Non-GAAP) EPS (GAAP) EPS (adjusted non-GAAP) Other Financials FCF($m) Capex($m) Working capital($m) Working capital as % of sales($m) Deferred revenues($m) Deferred CoGS($m) Days receivables Days in inventory Days payable Total assets($m) Net Cash ($m) Source: Berenberg Bank estimates Source: Berenberg Bank estimates
30
Global Technology
Technology Hardware
Ericsson
Drivers Networks Revenues (SKr bn) Operating margin (adjusted) Professional Services Revenues (SKr bn) Operating margin (adjusted) Multimedia Revenues (SKr bn) Operating margin (adjusted) ST Ericsson Revenues (US$ m) Operating margin (adjusted) Group Revenues (SKr bn) Gross margins R&D (SKr bn) R&D (as % of sales) SG&A (SKr bn) SG&A (as % of sales) Operating margin (adj.) EPS reported EPS (adjusted) Other Financials Restructuring charges (SKr bn) FCF (SKr bn) Capex (SKr bn) Working capital Working capital as % of sales Days receivables Days in inventory Days payable Total assets (SKr bn) Net debt (SKr bn) ex. Pensions Source: Berenberg Bank estimates Source: Berenberg Bank estimates 7.3 23.0 3.6 18.3 9.0% 114 87 72 282 56 3.7 5.9 4.6 29.0 12.8% 101 83 63 280 50 4.0 0.6 5.2 44.8 19.4% 108 87 61 283 38 3.0 32.6 3.6 31.4 13.3% 92 76 62 315 82 3.0 20.4 3.5 33.8 14.0% 90 81 62 350 113 3.0 21.7 3.7 37.0 14.6% 90 81 62 388 146 203.3 38.2% 29.9 14.7% 25.3 12.4% 11.7% 3.48 5.09 226.9 35.7% 30.1 13.2% 27.3 12.0% 9.5% 3.97 4.82 230.3 33.0% 32.7 14.2% 26.7 11.6% 5.2% 2.45 2.50 235.8 32.0% 32.5 13.8% 25.9 11.0% 6.3% 2.97 3.22 241.6 33.0% 32.6 13.5% 25.9 10.7% 8.1% 4.04 4.20 253.0 33.0% 33.4 13.2% 26.1 10.3% 8.8% 4.70 4.81 2,292 -19.0% 1,650 -44.3% 1,353 -45.0% 1,353 -30.0% 1,380 -15.0% 1,449 -8.0% 10,517 -4.1% 10,642 -3.4% 14,047 8.3% 14,750 5.0% 15,487 5.0% 16,262 5.0% 58,529 15.2% 58,834 14.7% 69,424 13.5% 79,143 13.0% 88,641 13.5% 97,505 13.8% 112,708 14.5% 132,395 14.3% 116,508 5.5% 115,343 7.0% 116,496 8.0% 119,991 8.5% 2010 2011 2012E 2013E 2014E 2015E
31
Global Technology
Technology Hardware
Juniper
Drivers Product Revenues ($'000) Gross Margin Service Revenues ($000) Gross Margin Group Revenues ($'000) Gross margins R&D ($'000) R&D (as % of sales) SG&A ($'000) SG&A (as % of sales) Operating margin (GAAP) Operating margin (adjusted) EPS (GAAP) EPS (adjusted) Other Financials FCF($'000) Capex($'000) Working capital($'000) Working capital as % of sales($'000) Days receivables Days payable Total assets($'000) Net Cash ($'000) 492,717 185,291 705,542 17.2% 53 79 8,467,851 2,286,401 918,275 266,314 733,095 16.5% 47 75 9,983,820 3,551,743 365,495 322,731 816,656 18.9% 41 61 10,198,989 3,281,895 664,771 322,731 1,095,085 23.7% 42 59 2,151,686 3,315,452 561,562 351,053 1,132,590 22.6% 45 60 11,788,440 4,571,764 663,928 379,857 1,215,998 22.4% 45 60 12,660,047 5,235,692 4,093,300 68% 837,188 20.5% 945,970 23.1% 21.1% 24.0% 1.15 1.32 4,445,400 65% 925,711 20.8% 1,071,465 24.1% 16.4% 20.6% 0.78 1.19 4,324,221 63% 1,016,192 23.5% 1,145,919 26.5% 6.2% 13.0% 0.35 0.73 4,612,857 61% 1,014,829 22.0% 1,143,989 24.8% 9.7% 13.9% 0.62 0.88 5,015,047 60% 1,003,009 20.0% 1,178,536 23.5% 12.3% 16.1% 0.85 1.10 5,426,523 59% 976,774 18.0% 1,275,233 23.5% 14.0% 17.5% 1.04 1.30 834,600 59.7% 967,200 57.8% 994,571 59.5% 1,060,957 58.0% 1,253,762 58.5% 1,410,896 59.0% 3,258,700 69.6% 3,478,200 67.6% 3,329,650 64.0% 3,551,900 61.5% 3,761,285 60.0% 4,015,627 59.0% 2010 2011 2012E 2013E 2014E 2015E
32
Global Technology
Technology Hardware
Alcatel-Lucent
Drivers Carrier Revenues (mn) Operating margin (ex. restructuring) Application Software Revenues (mn) Services Revenues (mn) Group Revenues (bn) Gross Margins (pro-forma) R&D (pro-forma) (bn) R&D (as % of sales) SG&A (pro-forma) (bn) SG&A (as % of sales) Operating margin (pro-forma ex. restructuring) EPS (pro-forma) excl restruct. pension & discont. ops. Other Financials Free cash flow (m) Capex (m) Working capital (m) as % of sales Days receivable Days in inventory Days payable Total assets (m) Net debt Source: Berenberg Bank estimates Source: Berenberg Bank estimates 818 692 1,634 10.2% 84 80 151 24,876 -311 477 570 1,490 9.7% 81 74 145 24,203 146 1,002 542 1,320 9.2% 89 85 163 24,426 197 1,087 502 1,243 8.9% 87 82 158 23,081 1,284 581 489 1,246 8.9% 85 78 150 22,261 1,865 420 480 1,261 8.9% 85 78 150 21,881 2,284 16.00 34.8% 2.5 15.6% 2.8 17.4% 1.8% 0.09 15.33 36.3% 2.4 15.4% 2.7 17.4% 3.4% 0.45 14.40 29.0% 2.4 16.8% 2.3 16.0% -2.9% -0.16 13.95 28.0% 2.0 14.5% 2.1 15.0% -1.5% -0.09 13.97 27.5% 2.0 14.0% 1.9 13.5% 0.0% 0.00 14.10 27.6% 1.9 13.5% 1.8 13.0% 1.1% 0.05 9,603 1.9% 9,654 2.7% 8,608 -5.0% 7,834 -4.0% 7,562 -3.5% 7,403 -2.0% 2010 2011 2012E 2013E 2014E 2015E
1,917
498
483
498
512
528
3,733
3,963
4,201
4,411
4,631
4,863
33
Global Technology
Technology Hardware
Hon Hai
Market share (of COGS in %) Apple Hon Hai market share of COGS (in %) HP Hon Hai market share of COGS (in %) Sony Hon Hai market share of COGS (in %) Group Revenues (NT$m) Gross margins 2,997,205 8.1% 3,452,681 7.7% 3,879,514 8.3% 4,254,214 8.4% 4,834,982 8.2% 5,236,216 7.7% 77.7% 78.0% 78.0% 78.0% 78.0% 78.0% 15.1% 15.5% 15.5% 15.5% 15.5% 15.5% 53.1% 56.0% 60.0% 60.0% 60.0% 62.0% 2010 2011 2012E 2013E 2014E 2015E
R&D (NT$m) R&D (as % of sales) SG&A (NT$m) SG&A (as % of sales) Operating margin (reported) EPS (basic) EPS (diluted) Other Financials FCF (NT$m) Capex (NT$m) Working capital (NT$m) Working capital as % of sales Days receivables Days payable Days in inventory Total assets (NT$m) Net debt /(cash) (NT$m) Source: Berenberg Bank estimates Source: Berenberg Bank estimates
34
Global Technology
Technology Hardware
Catcher
Drivers Apple Catcher market share of COGS (in %) Dell Catcher market share of COGS (in %) HTC Catcher market share of COGS (in %) 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 2010 2011 2012E 2013E 2014E 2015E
Group Revenues (NT$m) Gross margins R&D (NT$m) R&D (as % of sales) SG&A (NT$m) SG&A (as % of sales) Operating margin (reported) EPS (basic) EPS (diluted) Other Financials FCF (NT$m) Capex (NT$m) Working capital (NT$m) Working capital as % of sales Days receivables Days payable Days in inventory Total assets (NT$m) Net debt/(cash) (NT$m) Source: Berenberg estimates Source: Berenberg BankBank estimates (719) 5,192 8,439 38.6% 159 83 55 58,094 2,408 3,462 8,031 11,771 32.8% 127 62 49 89,278 (14,792) 4,757 7,628 11,140 32.1% 127 62 45 97,691 (19,548) 3,838 8,501 12,279 31.8% 127 62 43 107,653 (23,386) 4,483 8,699 13,797 31.7% 127 62 43 118,404 (27,869) 6,007 7,891 13,885 31.7% 127 62 43 127,494 (33,876) 21,845 35.5% 759 3.5% 1,906 8.7% 23.3% 6.66 6.21 35,914 47.0% 781 2.2% 2,897 8.1% 36.8% 14.22 14.14 34,672 42.8% 832 2.4% 2,843 8.2% 32.2% 11.06 10.99 38,643 42.0% 966 2.5% 3,169 8.2% 31.3% 12.69 12.61 43,493 41.0% 1,305 3.0% 3,566 8.2% 29.8% 13.58 13.51 43,840 40.0% 1,315 3.0% 4,822 11.0% 26.0% 11.96 11.89
35
Global Technology
Technology Hardware
Foxconn Technology
Drivers Apple Apple revenues % of total revenues Nintendo Nintendo revenues % of total revenues Group Revenues (NT$m) Gross margins R&D (NT$m) R&D (as % of sales) SG&A (NT$m) SG&A (as % of sales) Operating margin (reported) EPS (basic) EPS (diluted) Other Financials FCF (NT$m) Capex (NT$m) Working capital (NT$m) Working capital as % of sales Days receivables Days payable Days in inventory Total assets (NT$m) Net debt/(cash) (NT$m) Source: Berenberg Bank estimates Source: Berenberg Bank estimates 8,037 3,662 14,872 10.9% 74 55 16 92,552 (15,032) 3,675 3,851 17,932 13.6% 95 64 14 97,723 (23,472) 6,895 10,870 13,143 10.9% 84 64 14 102,118 (29,197) 7,415 6,938 14,071 10.1% 81 64 14 112,069 (35,443) 8,608 6,867 13,839 10.1% 81 64 14 119,229 (42,883) 7,297 7,466 15,048 10.1% 81 64 14 129,096 (49,011) 136,724 10.8% 1,290 0.9% 4,070 3.0% 6.9% 6.85 6.81 131,498 9.0% 1,132 0.9% 3,612 2.7% 5.4% 6.84 6.80 120,781 10.2% 1,208 1.0% 3,503 2.9% 6.3% 6.12 6.12 138,761 11.2% 1,110 0.8% 4,024 2.9% 7.5% 6.94 6.94 137,331 11.0% 1,099 0.8% 3,708 2.7% 7.5% 6.87 6.87 149,326 11.0% 1,195 0.8% 4,032 2.7% 7.5% 7.45 7.45 90,330 66.1% 76,186 57.9% 59,400 49.2% 70,035 50.5% 57,190 41.6% 54,825 36.7% 22,234 16.3% 30,161 22.9% 34,971 29.0% 37,035 26.7% 42,111 30.7% 48,865 32.7% 2010 2011 2012E 2013E 2014E 2015E
36
Global Technology
Technology Hardware
Motorola Solutions
Drivers Government Revenues ($bn) 5.1 5.4 6.1 6.4 6.5 6.6 2010 2011 2012E 2013E 2014E 2015E
Enterprise Mobility Solutions Revenues ($bn) 2.7 2.9 2.6 2.6 2.7 2.7
Group Revenues ($bn) Gross margins R&D ($bn) R&D (as % of sales) SG&A ($bn) SG&A (as % of sales) Operating margin (adj.) EPS (reported) EPS (adjusted) Other Financials FCF ($m) Capex ($m) Working capital ($m) Working capital as % of sales Days receivables Days in inventory Days payable Total assets ($ bn) Net debt ($ bn) Source: Berenberg Bank estimates Source: Berenberg Bank estimates 2,120 192 1,487 18.9% 79 24 68 19 (6.2) 687 167 1,701 20.4% 82 22 60 14 (3.6) 1,156 183 1,822 21.1% 81 22 54 13 (2.5) 1,002 180 1,857 20.7% 80 23 55 14 (3.5) 962 183 1,888 20.7% 80 23 55 15 (4.4) 984 185 1,914 20.7% 80 23 55 16 (5.4) 7.9 50.2% 1.0 13.1% 1.8 22.5% 14.7% 1.88 2.34 8.3 50.7% 1.0 12.2% 1.8 21.8% 16.6% 1.87 2.60 8.7 50.5% 1.0 11.8% 1.9 21.5% 17.2% 2.72 3.05 9.0 50.0% 1.1 12.3% 1.9 21.3% 16.4% 3.13 3.22 9.1 50.0% 1.1 12.3% 1.9 21.2% 16.5% 3.45 3.55 9.3 50.0% 1.1 12.3% 1.9 21.0% 16.7% 3.55 3.64
37
Global Technology
Technology Hardware
Apple
Drivers Mac Units ('000) Desktops Portables ASP ($) Desktops Portables Revenue ($m) iPOD Units ASP ($) Revenue ($m) iPhone Global Smartphone shipments (units m) iPhone shipments (units m) Apple's market share ASP ($) Revenue ($m) iPhone gross margins iPAD Units ASP ($) Revenue ($m) Group Revenues ($bn) Gross margins R&D ($bn) R&D (as % of sales) SG&A ($bn) SG&A (as % of sales) Operating margin EPS (non-GAAP) Other financials FCF ($m) Capex ($m) Working capital ($m) Working capital as % of sales Days receivable Days in inventory Days payable Total assets ($m) Net debt ($m) Source:Company data, Berenberg Bank Source: Company data, Berenberg Bank 16,590 2,005 -5,454 -8.4% 31 10 111 75,183 -51,011 33,269 4,260 -8,487 -7.8% 18 4 83 116,371 -81,570 42,561 8,295 -9,454 -6.0% 25 3 88 176,064 -121,251 57,305 12,766 -12,922 -6.7% 26 5 90 243,616 -178,556 62,759 16,708 -17,791 -7.1% 26 5 90 319,644 -241,014 62,541 18,765 -19,981 -7.1% 26 5 90 394,243 -303,255 65.2 39.4% 1.8 2.7% 5.5 8.5% 28.2% 16.41 108.2 40.5% 2.4 2.2% 7.6 7.0% 31.2% 29.79 156.5 43.9% 3.4 2.2% 10.0 6.4% 35.3% 47.86 191.9 40.5% 4.6 2.4% 12.5 6.5% 31.6% 51.06 251.2 39.0% 5.5 2.2% 16.3 6.5% 30.3% 63.70 282.1 39.0% 6.2 2.2% 18.3 6.5% 30.3% 71.48 7,458 665 4,958 32,394 628 20,358 58,310 556 32,424 75,000 473 35,449 95,000 425 40,412 105,000 404 42,432 281 40 14% 630 25,179 52.6% 461 72 16% 651 47,057 52.8% 603 125 21% 644 80,477 56.7% 911 169 19% 642 108,318 52.0% 1200 219 18% 635 139,405 49.0% 1400 263 19% 629 165,613 49.0% 50,342 164 8,274 42,620 175 7,453 35,165 160 5,615 28,000 144 4,024 22,000 132 2,909 20,000 124 2,486 4,627 9,035 4,669 12,066 4,656 13,502 4,609 14,852 4,563 16,040 4,563 17,003 2010 2011 2012 2013E 2014E 2015E
38
Global Technology
Technology Hardware
RIM
Drivers CY Global smartphone market (m units) RIMM's market share 2010 2009 172 2011 2010 281 2012 2011 461 2013E 2012E 603 2014E 2013E 911 2015E 2014E 1,200
21.4%
18.6%
10.6%
4.2%
2.0%
1.2%
Hardware Units shipped (m) ASP ($) Revenues ($m) Services Subscriber base Net additions ARPU ($) Revenues ($m) Group Revenues ($m) Gross margins R&D ($m) R&D (as % of sales) SG&A ($m) SG&A (as % of sales) Operating margin EPS (reported) EPS (adjusted) Other financials FCF ($m) Capex ($m) Working capital ($m) Working capital as % of sales Days receivables Days in inventory Days payable Total assets ($m) Net cash ($m) 2,025 1,009 2,600 17.4% 57 27 27 10,204 1,911 2,970 1,039 3,741 18.8% 60 20 27 12,875 2,121 2,010 902 3,345 18.2% 70 32 23 13,731 1,774 985 471 1,862 18.1% 85 37 32 11,904 2,153 (612) 364 1,773 23.4% 80 41 33 10,919 1,542 (104) 282 1,461 23.3% 80 41 33 10,356 1,437 14,953 44.0% 965 6.5% 1,811 12.1% 21.7% 4.41 3.63 19,907 44.3% 1,351 6.8% 2,400 12.1% 23.3% 6.36 6.36 18,400 35.6% 1,559 8.5% 2,604 14.2% 7.9% 2.22 1.54 10,308 28.0% 1,546 15.0% 1,835 17.8% -10.8% -1.64 -1.64 7,577 30.0% 1,137 15.0% 1,288 17.0% -8.0% -0.89 -0.89 6,273 31.0% 1,066 17.0% 1,255 20.0% -11.0% -1.01 -1.01 41,300 16,917 5.2 2,159 60,900 19,600 5.0 3,197 77,850 16,950 4.7 4,086 76,850 -1,000 4.1 3,849 75,650 -1,200 3.8 3,498 74,350 -1,300 3.6 3,240 36.7 331 12,154 52.3 305 15,956 49.0 282 13,794 25.5 225 5,738 17.8 191 3,414 14.3 163 2,322
39
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TPK
Drivers SFF touch module Revenue from SFF touch module 14,771 17,128 12,987 16,173 17,664 19,416 2010 2011 2012E 2013E 2014E 2015E
LFF touch module Revenue from LFF touch module 19,305 49,790 56,025 77,675 86,760 104,652
Touch display Revenue from touch display Apple market share Group Revenues (NT$m) Gross margins R&D (NT$m) R&D (as % of sales) SG&A (NT$m) SG&A (as % of sales) Operating margin (reported) EPS (basic) EPS (diluted) Other Financials FCF (NT$m) Capex (NT$m) Working capital (NT$m) Working capital as % of sales Days receivables Days payable Days in inventory Total assets (NT$m) Net debt /(cash) (NT$m) Source: Berenberg Bank estimates Source: Berenberg Bank estimates (4,770) 10,711 1,128 1.9% 73 103 22 41,929 1,697 (5,482) 23,458 (6,370) -4.7% 20 80 36 92,953 12,838 (3,460) 23,177 (7,478) -4.8% 20 75 30 105,479 16,300 (2,297) 27,442 (11,278) -6.2% 20 78 28 124,426 18,597 (2,909) 28,084 (11,669) -6.2% 20 78 28 137,584 21,506 (2,024) 31,570 (13,262) -6.3% 20 78 28 152,736 23,530 59,699 16.8% 1,574 2.6% 2,210 3.7% 10.5% 22.69 21.93 135,784 16.9% 3,491 2.6% 4,751 3.5% 11.4% 48.22 48.22 154,512 16.3% 4,635 3.0% 4,867 3.2% 10.2% 36.84 36.84 182,948 15.0% 5,854 3.2% 5,488 3.0% 8.8% 37.58 37.58 187,224 14.5% 5,991 3.2% 5,617 3.0% 8.3% 37.25 37.25 210,468 14.0% 6,735 3.2% 6,314 3.0% 7.8% 39.37 39.37 25,623 60.0% 68,867 55.0% 85,500 45.0% 89,100 45.0% 82,800 45.0% 86,400 45.0%
40
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Foxconn International
Market share (of COGS in %) Nokia FIH market share of COGS (in %) Motorola FIH market share of COGS (in %) Sony Ericsson FIH market share of COGS (in %) Group Revenues (USDm) Gross margins R&D (USDm) R&D (as % of sales) SG&A (USDm) SG&A (as % of sales) Operating margin (reported) Operating margin (adj.) EPS (basic) EPS (diluted) Other Financials FCF (USDm) Capex (USDm) Working capital (USDm) Working capital as % of sales Days receivables Days payable Days in inventory Total assets (USDm) Net debt (USDm) Source: Berenberg Bank estimates Source: Berenberg Bank estimates (360) 254 995 15.0% 91 81 43 6,017 (762.1) 310 178 805 12.7% 81 74 37 5,612 (1,439.0) (61) 210 683 12.4% 81 74 37 4,863 (968.1) (9) 193 640 12.6% 81 74 37 4,657 (959.6) (19) 184 607 12.6% 81 74 37 4,512 (941.1) (24) 174 575 12.5% 81 74 37 4,365 (917.4) 6,626 4.3% 220 3.3% 279 4.2% -3.3% 6,354 5.3% 194 3.1% 275 4.3% -2.1% 5,528 2.2% 171 3.1% 238 4.3% -5.2% 5,086 4.5% 147 2.9% 209 4.1% -2.5% 4,831 4.3% 140 2.9% 198 4.1% -2.7% 4,590 4.0% 133 2.9% 188 4.1% -3.0% 2010 2011 2012E 2013E 2014E 2015E
15.6%
14.0%
12.0%
12.0%
12.0%
12.0%
30.0%
27.0%
25.0%
25.0%
25.0%
25.0%
20.2%
16.0%
16.0%
16.0%
16.0%
16.0%
-0.03 -0.03
-0.01 -0.01
-0.03 -0.03
-0.01 -0.01
-0.01 -0.01
-0.01 -0.01
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ZTE
Drivers Networks Revenues (CNY '000) YoY growth Handsets Revenues (CNY '000) YoY growth Others Revenues (CNY '000) YoY growth Group Revenues (CNY '000) Gross margins R&D R&D (as % of sales) SG&A SG&A (as % of sales) Operating margin (reported) Operating margin (adjusted) EPS (reported) CNY EPS (adjusted) CNY EPS (reported) (HK$) EPS (adjusted) (HK$) Other Financials FCF (CNY '000) Capex (CNY '000) Working capital (CNY '000) Working capital as % of sales Days receivables Days in inventory Days payable Total assets (CNY '000) Net debt (CNY '000) Source: Berenberg estimates Source: Berenberg BankBank estimates (2,125) 3,067 19,668 28.0% 172 91 192 85,509 (1,530) (5,877) 4,065 15,135 17.5% 139 91 198 105,368 1,039 (3,625) 2,283 19,025 20.8% 140 83 170 102,072 6,699 (75) 2,410 20,166 20.9% 140 84 170 104,998 6,774 (198) 2,566 21,474 20.9% 140 84 170 108,263 6,972 1,075 2,697 22,573 20.9% 140 84 170 112,172 5,896 70,263 30.8% 7,092 10.1% 11,414 16.2% 7.2% 3.4% 1.17 1.25 1.35 1.44 86,254 30.3% 8,493 9.8% 13,385 15.5% 5.7% 3.3% 0.61 0.66 0.70 0.76 91,303 26.5% 8,309 9.1% 13,376 14.7% 1.5% 1.1% 0.05 0.05 0.06 0.06 96,392 26.0% 8,675 9.0% 13,495 14.0% 2.5% 2.1% 0.26 0.26 0.32 0.32 102,644 26.0% 9,238 9.0% 14,370 14.0% 2.5% 2.1% 0.30 0.30 0.37 0.37 107,897 26.0% 8,632 8.0% 15,106 14.0% 3.5% 3.2% 0.56 0.56 0.69 0.69 10,346 24.5% 12,799 23.7% 14,591 14.0% 14,883 2.0% 15,329 3.0% 15,789 3.0% 17,927 37.1% 26,934 50.2% 32,051 19.0% 34,615 8.0% 38,076 10.0% 41,884 10.0% 41,990 5.0% 46,522 10.8% 44,661 -4.0% 46,894 5.0% 49,239 5.0% 50,224 2.0% 2010 2011 2012E 2013E 2014E 2015E
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Qualcomm
Drivers Integrated Circuits Unit shipped(m) ASP($) Revenue($m) 399 17 6,701 483 18 8,840 590 21 12,160 710 21 14,910 850 19 16,150 1,000 16 16,000 2010 2011 2012 2013E 2014E 2015E
Technology Licensing Handset Sales(m) Handset ASP($) Market size($m) Blended royalty rate Revenue($m) Group Revenues ($m) (GAAP) 10,981 14,958 19,121 22,734 24,593 24,461 569 186 105,976 3.5% 3,709 726 207 149,919 3.5% 5,247 853 220 187,276 3.5% 6,555 1,006 217 218,302 3.3% 7,204 1,100 216 237,600 3.3% 7,793 1,150 209 240,350 3.3% 7,811
71.0%
68.0%
64.5%
62.8%
62.0%
61.0%
R&D ($m) R&D (as % of sales) SG&A ($m) SG&A (as % of sales) Operating margin (GAAP) Operating margin (adj. Non-GAAP) EPS (GAAP) EPS (adjusted non-GAAP) Other Financials FCF($m) Capex($m) Working capital($m) Working capital as % of sales($m)
Days receivables Days in inventory Days payable Total assets($m) Net Cash ($m)
24 60 87 30,572 18,402
16 44 40 36,422 19,107
28 55 70 43,012 26,837
27 53 64 49,104 27,564
29 55 60 51,878 34,825
29 55 60 54,967 37,538
43
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Nokia
Drivers Global handset market size (m units) Global smartphone market (m units) 2010 1,427 2011 1,511 2012E 1,600 2013E 1,887 2014E 2,000 2015E 2,200
281
461
603
911
1,200
1,400
Nokia Device and Services Nokia's market share Units shipped (m) ASP () Revenues (m) Operating margin (adjusted) NSN Revenues (m) Operating margin (adjusted) Location & Commerce Revenues (m) Operating margin (adjusted) Group Revenues ( bn) Gross margins (adjusted) R&D (adjusted) (bn) R&D (as % of sales) SG&A (adjusted) ( bn) SG&A (as % of sales) Operating margin (IFRS) Operating margin (adjusted) EPS (IFRS) EPS (adjusted) Other Financials FCF (bn) Capex (m) Working capital (bn) Working capital as % of sales Days receivable Days in inventory Days payable Total assets (bn) Net debt (bn) Source: Berenberg Bank estimates Source: Berenberg Bank estimates 4.10 679 4.0 9.4% 64 31 75 39.1 (7.0) 0.54 597 4.0 10.3% 67 31 73 36.2 (5.8) (0.54) 395 2.4 8.2% 69 27 78 29.5 (4.9) (1.92) 391 3.2 11.1% 72 30 73 27.4 (3.1) (0.82) 325 3.0 11.1% 72 30 73 24.8 (1.4) (0.75) 312 2.9 11.0% 72 30 73 23.2 (0.6) 42.5 30.6% 5.3 12.5% 4.5 10.6% 6.0% 7.5% 0.50 0.61 38.7 29.4% 5.2 13.4% 4.4 11.5% -2.7% 4.7% 0.15 0.29 29.4 23.8% 4.4 15.0% 3.9 13.4% -8.7% -4.6% 0.73 0.40 28.5 24.0% 3.7 13.0% 3.4 12.0% -3.1% -1.0% 0.28 0.11 27.1 24.0% 3.3 12.0% 3.0 11.0% -1.2% 1.0% 0.15 0.03 26.0 23.0% 2.9 11.0% 2.9 11.0% -1.3% 1.0% 0.15 0.03 1,003 26.4% 1,050 19.4% 1,100 13.0% 1,300 11.0% 1,400 10.0% 1,500 9.0% 12,661 0.8% 14,041 1.6% 13,300 3.5% 13,500 4.0% 13,300 4.3% 13,300 3.0% 31.7% 453 62.8 29,137 10.9% 27.6% 417 56.9 23,943 6.6% 21.1% 338 45.5 15,383 -8.0% 17.4% 328 41.9 13,724 -9.0% 15.6% 311 39.8 12,386 -8.0% 13.4% 296 37.8 11,178 -7.0%
44
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45
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Please note that the use of this research report is subject to the conditions and restrictions set forth in the General investment-related disclosures and the Legal disclaimer at the end of this document. For analyst certification and remarks regarding foreign investors and country-specific disclosures, please refer to the respective paragraph at the end of this document.
Disclosures in respect of section 34b of the German Securities Trading Act (Wertpapierhandelsgesetz WpHG)
Company ARM Holdings Alcatel-Lucent Apple Catcher Technology Cisco Ericsson Foxconn International Foxconn Technology HTC Hon Hai Precision Imagination Technologies Infineon Technologies Juniper Networks MediaTek Motorola Solutions Nokia Qualcomm Research in Motion STMicroelectronics Samsung Electronics TPK Holding ZTE (1) (2) (3) (4) (5) (6) Disclosures no disclosures no disclosures 5 no disclosures 5 no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures
Berenberg Bank or its affiliate(s) was Lead Manager or Co-Lead Manager over the previous 12 months of a public offering of this company. Berenberg Bank acts as Designated Sponsor for this company. Over the previous 12 months, Berenberg Bank and/or its affiliate(s) has effected an agreement with this company for investment banking services or received compensation or a promise to pay from this company for investment banking services. Berenberg Bank and/or its affiliate(s) holds 5% or more of the share capital of this company. Berenberg Bank holds a trading position in shares of this company. Berenberg Bank and/or its affiliate(s) holds a net short position of 1% or more of the share capital of this company, calculated by methods required by German law as of the last trading day of the past month.
Historical price target and rating changes for ARM Holdings in the last 12 months (full coverage) Date 16 March 12 29 November 12 Price target - GBP 7.20 10.00 Rating Buy Buy Initiation of coverage 06 January 10
Historical price target and rating changes for Alcatel-Lucent in the last 12 months (full coverage) Date 16 March 12 08 June 12 04 September 12 Price target - EUR 1.20 1.00 0.70 Rating Sell Sell Sell Initiation of coverage 06 January 10
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Historical price target and rating changes for Apple in the last 12 months (full coverage) Date 16 March 12 04 September 12 Price target - USD 750.00 800.00 Rating Buy Buy Initiation of coverage 06 January 10
Historical price target and rating changes for Catcher Technology in the last 12 months (full coverage) Date 09 December 11 16 March 12 08 June 12 04 September 12 Price target - TWD 190.00 250.00 180.00 150.00 Rating Buy Buy Hold Hold Initiation of coverage 09 December 11
Historical price target and rating changes for Cisco in the last 12 months (full coverage) Date Price target - USD Rating Initiation of coverage 07 June 10 Historical price target and rating changes for Ericsson in the last 12 months (full coverage) Date 08 June 12 29 November 12 Price target - SEK 53.00 51.00 Rating Sell Sell Initiation of coverage 06 January 10
Historical price target and rating changes for Foxconn International in the last 12 months (full coverage) Date 09 December 11 16 March 12 08 June 12 04 September 12 29 November 12 Price target - HKD 3.72 4.70 2.50 2.00 3.00 Rating Sell Sell Sell Sell Sell Initiation of coverage 09 December 11
Historical price target and rating changes for Foxconn Technology in the last 12 months (full coverage) Date 09 December 11 16 March 12 08 June 12 Price target - TWD 86.00 100.00 85.00 Rating Hold Sell Sell Initiation of coverage 09 December 11
Historical price target and rating changes for HTC in the last 12 months (full coverage) Date 08 June 12 Price target - TWD 150.00 Rating Sell Initiation of coverage 06 January 10
Historical price target and rating changes for Hon Hai Precision in the last 12 months (full coverage) Date 09 December 11 16 March 12 08 June 12 Price target - TWD 96.00 125.00 80.00 Rating Buy Buy Hold Initiation of coverage 09 December 11
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Historical price target and rating changes for Imagination Technologies in the last 12 months (full coverage) Date 14 December 11 12 January 12 16 March 12 08 June 12 29 November 12 Price target - GBp 580.00 580.00 660.00 400.00 360.00 Rating Buy Hold Hold Sell Sell Initiation of coverage 20 October 11
Historical price target and rating changes for Infineon Technologies in the last 12 months (full coverage) Date 16 March 12 08 June 12 04 September 12 Price target - EUR 8.00 6.50 6.00 Rating Hold Hold Hold Initiation of coverage 06 January 10
Historical price target and rating changes for Juniper Networks in the last 12 months (full coverage) Date 08 June 12 Price target - USD 14.00 Rating Sell Initiation of coverage 07 June 10
Historical price target and rating changes for MediaTek in the last 12 months (full coverage) Date Price target - TWD Rating Initiation of coverage 03 September 10
Historical price target and rating changes for Motorola Solutions in the last 12 months (full coverage) Date 16 March 12 08 June 12 Price target - USD 43.00 40.00 Rating Sell Sell Initiation of coverage 24 January 11
Historical price target and rating changes for Nokia in the last 12 months (full coverage) Date 16 March 12 08 June 12 04 September 12 Price target - EUR 3.20 1.80 1.50 Rating Sell Sell Sell Initiation of coverage 06 January 10
Historical price target and rating changes for Qualcomm in the last 12 months (full coverage) Date 16 March 12 08 June 12 Price target - USD 65.00 50.00 Rating Hold Sell Initiation of coverage 03 September 10
Historical price target and rating changes for Research in Motion in the last 12 months (full coverage) Date 16 March 12 08 June 12 04 September 12 Price target - USD 11.00 7.00 5.00 Rating Sell Sell Sell Initiation of coverage 06 January 10
Historical price target and rating changes for STMicroelectronics in the last 12 months (full coverage) Date 16 March 12 08 June 12 Price target - EUR 4.50 3.50 Rating Sell Sell Initiation of coverage 06 January 10
48
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Historical price target and rating changes for Samsung Electronics in the last 12 months (full coverage) Date 08 June 12 29 November 12 Price target - KRW 1450000.00 1650000.00 Rating Buy Buy Initiation of coverage 08 June 12
Historical price target and rating changes for TPK Holding in the last 12 months (full coverage) Date 09 December 11 16 March 12 08 June 12 04 September 12 Price target - TWD 400.00 400.00 360.00 320.00 Rating Hold Sell Sell Sell Initiation of coverage 09 December 11
Historical price target and rating changes for ZTE in the last 12 months (full coverage) Date 08 June 12 04 September 12 Price target - HKD 13.00 8.50 Rating Sell Sell Initiation of coverage 06 January 10
Berenberg distribution of ratings and in proportion to investment banking services Buy Sell Hold 51.28 % 14.47 % 34.26 % 68.00 % 8.00 % 24.00 %
49
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(regular updates provided); and those under screening coverage (updates provided as and when required at irregular intervals). The functional job title of the person/s responsible for the recommendations contained in this report is Equity Research Analyst unless otherwise stated on the cover. The following internet link provides further remarks on our financial analyses: http://www.berenberg.de/research.html?&L=1&no_cache=1
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Analyst certification
I, Adnaan Ahmad, hereby certify that all of the views expressed in this report accurately reflect my personal views about any and all of the subject securities or issuers discussed herein. In addition, I hereby certify that no part of my compensation was, is, or will be, directly or indirectly related to the specific recommendations or views expressed in this research report, nor is it tied to any specific investment banking transaction performed by Berenberg Bank or its affiliates. I, Tammy Qiu, hereby certify that all of the views expressed in this report accurately reflect my personal views about any and all of the subject securities or issuers discussed herein. In addition, I hereby certify that no part of my compensation was, is, or will be, directly or indirectly related to the specific recommendations or views expressed in this research report, nor is it tied to any specific investment banking transaction performed by Berenberg Bank or its affiliates. I, Daud Khan, hereby certify that all of the views expressed in this report accurately reflect my personal views about any and all of the subject securities or issuers discussed herein. In addition, I hereby certify that no part of my compensation was, is, or will be, directly or indirectly related to the specific recommendations or views expressed in this research report, nor is it tied to any specific investment banking transaction performed by Berenberg Bank or its affiliates. I, Ali Khwaja, hereby certify that all of the views expressed in this report accurately reflect my personal views about any and all of the subject securities or issuers discussed herein. In addition, I hereby certify that no part of my compensation was, is, or will be, directly or indirectly related to the specific recommendations or views expressed in this research report, nor is it tied to any specific investment banking transaction performed by Berenberg Bank or its affiliates.
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I, Sebastian Grabert, hereby certify that all of the views expressed in this report accurately reflect my personal views about any and all of the subject securities or issuers discussed herein. In addition, I hereby certify that no part of my compensation was, is, or will be, directly or indirectly related to the specific recommendations or views expressed in this research report, nor is it tied to any specific investment banking transaction performed by Berenberg Bank or its affiliates.
The preparation of this document is subject to regulation by German law. The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.
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Disclosures
no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures no disclosures
Berenberg Capital Markets LLC owned 1% or more of the outstanding shares of any class of the subject company by the end of the prior month.* Over the previous 12 months, Berenberg Capital Markets LLC has managed or co-managed any public offering for the subject company.*
51
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Berenberg Capital Markets LLC is making a market in the subject securities at the time of the report. Berenberg Capital Markets LLC received compensation for investment banking services in the past 12 months, or expects to receive such compensation in the next 3 months.* There is another potential conflict of interest of the analyst or Berenberg Capital Markets LLC, of which the analyst knows or has reason to know at the time of publication of this research report.
* For disclosures regarding affiliates of Berenberg Capital Markets LLC please refer to the Disclosures in respect of section 34b of the German Securities Trading Act (Wertpapierhandelsgesetz WpHG) section above.
Copyright
Berenberg Bank reserves all the rights in this document. No part of the document or its content may be rewritten, copied, photocopied or duplicated in any form by any means or redistributed without Berenberg Banks prior written consent. June 2012 Berenberg Bank
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+44 (0) 20 3207 7882 +44 (0) 20 3207 7917 +44 (0) 20 3465 2636 +44 (0) 20 3207 7920
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Sales
Specialist Sales CONSUMER Rupert Trotter INSURANCE Trevor Moss LONDON Miel Bakker John von Berenberg-Consbruch Ronald Bernette Matt Chawner Toby Flaux Sean Heath David Hogg Ben Hutton James Matthews Andrew McNally David Mortlock Peter Nichols George Smibert Max von Doetinchem Paul Walker Peter Young +44 (0) 20 3207 7815 HEALTHCARE Frazer Hall TECHNOLOGY Jean Beaubois HAMBURG Susette Mantzel Marco Weiss PARIS Christophe Choquart Dalila Farigoule Clmence La Clavire-Peyraud Olivier Thibert ZURICH Stephan Hofer Carsten Kinder Gianni Lavigna Benjamin Stillfried CRM LONDON Greg Swallow Laura Cooper HAMBURG Sandra Bode CORPORATE ACCESS LONDON Patricia Nehring E-mail: firstname.lastname@berenberg.com; Internet www.berenberg.de UTILITIES +44 (0) 20 3207 7875 Benita Barretto +44 (0) 20 3207 7829 INDUSTRIALS Chris Armstrong Kaj Alftan Sales Trading HAMBURG Paul Dontenwill Christian Endras Gregor Labahn Fin Schaffer Lars Schwartau Marvin Schweden Tim Storm Philipp Wiechmann LONDON Stewart Cook Chris McKeand Simon Messman Stephen O'Donohoe PARIS Sylvain Granjoux EVENTS LONDON Natalie Meech Charlotte Kilby Hannah Whitehead
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+33 (0) 1 5844 9508 +33 (0) 1 5844 9510 +33 (0) 1 5844 9521 +33 (0) 1 5844 9512
+49 (0) 40 350 60 563 +49 (0) 40 350 60 359 +49 (0) 40 350 60 571 +49 (0) 40 350 60 596 +49 (0) 40 350 60 450 +49 (0) 40 350 60 576 +49 (0) 40 350 60 415 +49 (0) 40 350 60 346
+41 (0) 44 283 2029 +41 (0) 44 283 2024 +41 (0) 44 283 2038 +41 (0) 44 283 2033
+44 (0) 20 3465 2752 +44 (0) 20 3207 7938 +44 (0) 20 3465 2754 +44 (0) 20 3465 2753
FRANKFURT Michael Brauburger Nina Buechs Andr Grosskurth Boris Koegel Joachim Kopp
+49 (0) 69 91 30 90 741 +49 (0) 69 91 30 90 735 +49 (0) 69 91 30 90 734 +49 (0) 69 91 30 90 740 +49 (0) 69 91 30 90 742
+44 (0) 20 3207 7831 +44 (0) 20 3207 7832 +44 (0) 20 3207 7922
US Sales
BERENBERG CAPITAL MARKETS LLC Member FINRA & SIPC Andrew Holder Colin Andrade Burr Clark Julie Doherty +1 (617) 292 8222 +1 (617) 292 8230 +1 (617) 292 8282 +1 (617) 292 8228
+1 (617) 292 8288 +1 (617) 292 8292 +1 (646) 445 7204 +1 (646) 445 7202
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HAMBURG BIELEFELD BRAUNSCHWEIG BREMEN DSSELDORF FRANKFURT MUNICH STUTTGART WIESBADEN LONDON LUXEMBOURG PARIS SALZBURG SHANGHAI VIENNA ZURICH
54