Solid AI and auto ASIC progress beyond the near term muted mobile demand

Research evidence excerpt

Solid AI and auto ASIC progress beyond the near term muted mobile demand

iQprofile SM MediaTek

Key Income Statement Data (Dec) 2024A 2025A 2026E 2027E 2028E Company Sector

(NT$ Millions) Semiconductors

Sales 530,586 595,966 651,552 1,066,233 2,168,687

Gross Profit 263,386 283,080 297,229 471,591 917,929

Sell General & Admin Expense (28,981) (31,304) (31,044) (37,814) (48,689) Company Description Operating Profit 102,412 103,470 109,603 239,970 619,696

Net Interest & Other Income 16,590 20,633 16,553 16,541 24,239 MediaTek is a fabless IC design company supplying to

Associates 517 785 0 0 0 wireless communications and digital consumer markets.

Pretax Income 119,519 124,888 126,156 256,511 643,935 Before taking leadership in mobile SoC area, it had built

Tax (expense) / Benefit (12,378) (18,770) (17,615) (36,249) (92,219) solid ground in the TV SoC and optical disk drive markets.

Net Income (Adjusted) 106,387 105,319 107,720 219,455 550,912

The firm invests heavily in R&D to seek better positioning

Average Fully Diluted Shares Outstanding 1,592 1,592 1,592 1,592 1,592

in the 5G cycle, and has a complete offering including ASIC,

Key Cash Flow Statement Data

Wi-Fi, PMIC etc. to address applications beyond

Net Income 106,387 105,319 107,720 219,455 550,912

smartphone, such as IoT and auto. Depreciation & Amortization 20,936 22,974 24,107 24,275 24,459

Change in Working Capital (2,076) (18,295) 1,194 (53,939) (158,714)

Deferred Taxation Charge NA NA NA NA NA

Other Adjustments, Net 30,808 52,794 (16,750) 33,320 (25,118) Investment Rationale

Cash Flow from Operations 156,055 162,793 116,271 223,111 391,539 We have Buy rating on MediaTek as we think MediaTek is

Capital Expenditure (13,771) (15,009) (16,365) (16,470) (16,911) ready and has the strength to brace for the upcoming