摩根士丹利-大中華半導體GaAs射頻產業(yè)近期中國射頻逆風莫20241029

Morganstanley

October24,202402:13PMGMT

RESEARCH

Idea

GreaterChinaSemiconductors|AsiaPacific

GaAs/RFindustry:Nearterm

ChinaRFheadwindmoreseverethanexpected

China'sRFsectorfacessevereheadwindsinto4Q24.AWSC

couldseeastrong4Q24correction(revenuedown30%Q/Q).

KeyTakeaways

WeakerChinasmartphoneRFdemandin4Q24couldleadtodownsidesurpriseWedowngradeAWSCtoEW

WeareOWWINSemiandUWMaxscend

4Q24ChinaRFcorrectionmoreseverethanexpected-downgradeAWSCtoEW:

WeexpectAWSCtosuffer~30%Q/Qrevenuecorrectionin4Q24(afterfalling16%Q/Qin3Q24).OurindustrycheckssuggestthatChinaRFdemandin2H24ismuchweaker,afterstrong1Hbusinessmomentum.Clientsmighthavesomeinventoryonhand,thusmostoftheordersremainsmallvolumerushorders.LansuswasafastgrowingaccountatAWSCduring2H23-1H24(Exhibit10),whileChinaRFICdesignhousesarebecomingmuchmoreconservativeinto4Q24.Wealsolearnedthat

China'smid-to-highendAndroidphoneRF(QCOM)demandisalsoslowingdownin4Q24.WearenotUWAWSCasitskeyclientLansuscouldstillgrowY/Yinto2025-thecompany'smomentumcouldresumeafterthenear-terminventorycorrection.

Non-AIdemandisn’trecovering:BackinJuly,wemovedourindustryviewtoIn-Lineasthenon-AIrecoveryremainsslow(21Jul2024).Threemonthslater,we

haven’tseenanyimprovementasexisting2Q24semiinventorydaysarestillhigh.TheexpectedAIPC&AIsmartphonereplacementcyclehasn’ttakenplacein2H24.

WeslightlyrevisedownWINSemiearningsestimateswhilestayingOW:We

believeWINSemi's4Q24businesscouldalsobedraggeddownbyweakerChinaRFdemand-wenowexpectWINSemi's4Q24revenuetodeclineHSDQ/Q(afterdown12%Q/Qin3Q24).IntheGaAsfoundryspace,wepreferWINSemioverAWSC

(Exhibit7)whenwehaveconcernsonChinaRFdemand-WINSemicouldbea

moredefensiveplay.Moreover,WINSemishouldseebusinessupsidefromSamsungandiPhone(seeWINSemi:MultiplecustomersconfirmedordersfromSamsung).

WeareUWMaxscend-weakerChinamarket,marketsharelossatSamsung

smartphoneremainourconcerns:Weaktop-linemomentum,sharelossat

Samsung,risinginventory(Exhibit3)andGMerosionfrompricingpressureand

depreciationcontinuetodragdownprofitability.WelearnedthatpricingpressurecontinuesasODMsarestilltryingtolowercostsin2H24.WeareUWonMaxscend-thecompanywillhostananalystmeetingonOctober31th.

MorganStanleyTaiwanLimited+

RayWu,CFA

EquityAnalyst

+88622730-2871

Ray.Wu@

CharlieChan

EquityAnalyst

+88622730-1725

Charlie.Chan@

DanielYen,CFA

EquityAnalyst

+88622730-2863

Daniel.Yen@

MorganStanleyAsiaLimited+

DaisyDai,CFA

EquityAnalyst

+8522848-7310

Daisy.Dai@

MorganStanleyTaiwanLimited+

TiffanyYeh

ResearchAssociate

+88627712-3032

Tiffany.Yeh@

GreaterChinaTechnologySemiconductors

AsiaPacific

IndustryViewIn-Line

What’sChanged

From

NT$188.00

To

NT$180.00

WINSemiconductorsCorp(3105.TWO)

PriceTarget

AdvancedWireless

SemiconductorCo

(8086.TWO)

From

To

Rating

Overweight

Equal-weight

PriceTarget

NT$140.00

NT$96.00

MorganStanleydoesandseekstodobusinesswith

companiescoveredinMorganStanleyResearch.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofMorganStanley

Research.InvestorsshouldconsiderMorganStanley

Researchasonlyasinglefactorinmakingtheirinvestmentdecision.

Foranalystcertificationandotherimportantdisclosures,refertotheDisclosureSection,locatedattheendofthisreport.

+=Analystsemployedbynon-U.S.affiliatesarenotregisteredwithFINRA,maynotbeassociatedpersonsofthememberandmaynotbesubjecttoFINRArestrictionson

communicationswithasubjectcompany,publicappearancesandtradingsecuritiesheldbyaresearchanalystaccount.

2

Morganstanley

RESEARCH

Idea

Previewtoearnings

FocusKPIFocusKPISurpriseLikelyimpacttoconsensusEPS*

AdvancedWirelessSemiconductorCo8086.TWO

4Q24EarningsVerylikelydownsidesurpriseMeaningfulrevisionlower

MaxscendMicroelectronicsCoLtd300782.SZ

4Q24EarningsLikelydownsidesurprise

sModestrevisionlower

WINSemiconductorsCorp3105.TWO

4Q24EarningsLikelydownsidesurpriseMeaningfulrevisionlower

*LikelyimpacttoconsensusEPSisforthenext12monthsSource:Companydata,MorganStanleyResearch

Morganstanley

RESEARCH

Idea

KeyChartsforGaAsfoundries

Exhibit1:WeexpectGaAsfoundryplayers'UTRtoimproveinto2025e

120%

100%

80%

60%

40%

20%

1Q20

2Q20

3Q20

4Q20

1Q21

2Q21

3Q21

4Q21

1Q22

2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

1Q24

2Q24

3Q24e

4Q24e

1Q25e

2Q25e

3Q25e

4Q25e

AWSCUTR

WINsemiUTR

Source:Companydata,MorganStanleyResearch(e)estimates

600

500

400

300

200

100

0

SkyworksQorvoWINVPECVanchipRichWaveMaxscend

Exhibit3:RFdesignhouses'slowdownininventorydigestion(DOI)

SemiAWSC

2019-2020averageDOI1Q21w2Q213Q21w4Q21w1Q222Q22w3Q224Q221Q232Q23w3Q23w4Q23.1Q24w2Q24

Source:Companydata,MorganStanleyResearch

Exhibit5:Appleannualsmartphoneshipmentscouldgrowto231mnunitsin2025

Exhibit2:WeexpectWINSemitoshowmarginimprovementinto2025e

50%

40%30%20%10% 0%-10%-20%

-30%

WINSemiGM(LHS)WINSemiOpM

Source:Companydata,MorganStanleyResearch(e)estimates

Exhibit4:SamsungmovingRFcomponentpurchasestoGreaterChinaRFplayersisapotentiallylargebusiness

opportunity

ODM'sdecision24%

Samsung'sdirect

purchase

76%

Source:Companydata,MorganStanleyResearchestimates

Exhibit6:WINSemiisexpectedtohave16%revenueexposuretoWiFiin2024

250

200

150

100

50

0

2020A2021A2022A2023A2024E2025EmmiPhoneshipment(mnunits)iPhoneshipmentY/Y

Source:Companydata,MorganStanleyResearchestimates

3D

25%

20%

sensing/Others

13%

15%

10%

Cellular45%

5%

Infrastructure26%

0%

-5%

Wi-Fi

-10%

16%

Source:Companydata,MorganStanleyResearchestimates

MorganStanleyResearch3

4

Morganstanley

RESEARCH

Idea

WepreferWINSemioverAWSC

Exhibit7:WepreferWinSemioverAWSCgiventhenear-termChinaRFcorrection

90%

iPhonedemand

ChinaRFcorrectin+

SamsungRFshareshift

=>preferWinSemi

moresteadywhileChinasmartphonecorrection

60%

=>preferWinSemi

30%

0%

-30%

Chinasmartphonedoublebooking

=>preferAWSC

Specdowngradecycle

low-endsmartphone

inventoryhealthier

=>preferAWSC

-60%

2018201920202021202220232024e2025e2026e

WinSemirevenueY/YAWSCrevenueY/Y

Source:Companydata,MorganStanleyResearch

Exhibit8:AWSCwillsuffermoresevererevenuedeclinenear

term

QuarterlyRevenueY/YComparison

110%

80%

50%

20%

-10%

-40%

1Q232Q233Q234Q231Q242Q243Q24e4Q24e1Q25e2Q25e3Q25e4Q25eWinSemirevenueY/YAWSCrevenueY/Y

Source:Companydata,MorganStanleyResearchestimates

Exhibit9:WINSemiGMmayholdbetternearterm

GrossMarginPerformanceComparison

40%

30%

20%

10%

2Q233Q234Q231Q242Q243Q24e4Q24e1Q25e2Q25e3Q25e4Q25eWinSemiGMAWSCGM

Source:Companydata,MorganStanleyResearchestimates

Morganstanley

RESEARCH

Idea

Exhibit10:LansusisafastgrowingaccountatAWSC,whilegrowthmomentumsloweddownrecently

5,000

4,000

3,000

2,000

1,000

0

20232024e2025e2026e

Vanchiprevenue(Rmbmn)Lansus

Source:Companydata,Bloomberg

MorganStanleyResearch5

6

Morganstanley

RESEARCH

Idea

WINSemi3Q24and4Q24outlook

Exhibit11:WinSemi–3Q24earningsoutlook

Source:Companydata,Bloomberg,MorganStanleyResearch(e)estimates

Exhibit12:WinSemi–4Q24earningsoutlook

Source:Companydata,Bloomberg,MorganStanleyResearch(e)estimates

Morganstanley

RESEARCH

Idea

AWSC3Q24and4Q24outlooks

Exhibit13:AWSC–3Q24earningsoutlook

Source:Companydata,Bloomberg,MorganStanleyResearch(e)estimates

Exhibit14:AWSC–4Q24earningsoutlook

Source:Companydata,Bloomberg,MorganStanleyResearch(e)estimates

MorganStanleyResearch7

8

Morganstanley

RESEARCH

Idea

Maxscend3Q24and4Q24outlooks

Exhibit15:Maxscend–3Q24earningsoutlook

Source:Companydata,Bloomberg,MorganStanleyResearch(e)estimates

Exhibit16:Maxscend–4Q24earningsoutlook

Source:Companydata,Bloomberg,MorganStanleyResearch(e)estimates

Morganstanley

RESEARCH

Idea

WINSemi:EarningsEstimateRevisionsAndQuarterlyFinancials

Welowerour2024e,2025eand2026eEPSby14%,5%and2%,respectively:We

factorinweakdemandfromRFin2H24andahigherexpensesratioforthefollowing

years,whichwillimpactrevenuegrowthandmargins.Therefore,wecutourgrossmarginestimatesfor2024,2025and2026by0.8ppts,0.5pptsand0.3ppts,respectively,andouroperatingprofitmarginforecastsby1.3ppts,0.5pptsand0.1ppts.Westillanticipateasolidrevenuegrowthin2025and2026,giventheWiFi7migration.

Exhibit17:WINSemi:Estimaterevisions

Source:MorganStanleyResearch(e)estimates

Exhibit18:WINSemi:Quarterlyfinancials

Source:Companydata,MorganStanleyResearch(e)estimates

MorganStanleyResearch9

10

WINSemi:ValuationMethodology

Welowerourpricetarget(basecasevalue)toNT$180fromNT$188:ThisfactorsinourEPSforecastchangesfor2024to2026.

Wecontinuetoderiveourpricetargetfromaresidualincomemodelaswebelieveitbestpresentsthevalueofthecompany.Allofourkeyassumptionsareunchanged,includingacostofequityof9.2%(Betaof1.2,Equityriskpremiumof6%andrisk-freerateof2%),anintermediategrowthrateof9.5%andaterminalgrowthrateof4.0%.

OurbullcasevalueisalsoloweredfromNT$334toNT$320andourbearcasevaluefromNT$118toNT$113,implying46xand16x2025eEPS.

Exhibit19:WINSemi:Residualincomemodel

Source:MorganStanleyResearch(e)estimates.

Exhibit20:WINSemi's1-yearforwardP/Eband

Source:FactSet,MorganStanleyResearchestimates

Morganstanley

RESEARCH

Idea

RiskReward–WINSemiconductorsCorp(3105.TWO)

BestGaSfoundryplayduringWiFi7migration;keepOW

PRICETARGETNT$180.00

Base-case,residualincomemodel.Keyassumptions:costofequityof9.2%(betaof1.2),intermediategrowthrateof9.5%andterminalgrowthrateof4.0%.

NT$151.58

ConsensusPriceTargetDistribution

Source:Re?nitiv,MorganStanleyResearch

NT$100.00◆NT$188.00

MSPT

Mean◆MorganStanleyEstimates

RISKREWARDCHART

TWD

NT$320.00(+147.10%)

320

240

r"\

NT$180.00(+39.00%)

160

NT$113.00(-12.74%)

80

0

OCT'23APR'24OCT'24OCT'25

key:一HistoricalStockPerformanceCurrentStockPricePriceTarget

Source:Re?nitiv,MorganStanleyResearch

OVERWEIGHTTHESIS

.WebelieveWiFi7migrationmaybene?tWINSemi'sfoundrybusinessthankstoitsleadingpositioninGaS.

.Samsung'sGreaterChinaRFICdesignhousesuppliers(Vanchip,OnMicroandRichWave)areexpectedtostartplacingordersatWINSemiin4Q24.

.WeexpecttoseemoreGaAswafer

consumptionaswemigrateintotheWiFi7,asWiFi7hasthreebands(2.4GHz,5GHz,and6GHz)vs.WiFi6atjusttwo(2.4GHz,5GHz).

.WeareOWWINSemiasitsvaluationistradingbelowitshistoricalaverage,whichlooksattractivetous.

ConsensusRatingDistribution

33%Overweight50%Equal-weight17%Underweight

MSRating

Source:Re?nitiv,MorganStanleyResearch

RiskRewardThemes

NewDataEra:Positive

PricingPower:Positive

SecularGrowth:Positive

ViewdescriptionsofRiskRewardsThemeshere

NT$320.00

BULLCASE

46x2025eEPS

3Dsensing,wiFi7and5Gtakeoff:AR

adoptionratebeatsexpectationsin2024andbeyond.Smartphonedemandappearstobestrongerthanexpected,while5GandWiFi7implementationstartsatahealthyspeed.Majorcommunicationspower

ampli?er(PA)customers,suchasMurataandBroadcom,continuetoworkwithWINSemi,whilePAcustomerQualcomm'sRFdemandbeatsourexpectationsandWINSemigainssubstantialmarketshare.

NT$180.00

BASECASE

26x2025eEPS

ordersfromchinesesmartphonecustomers

andiphonestarttopickup:WiFi7demandgrowsasforecastin2024andbeyond.KeycommunicationsPAcustomerscontinuetoworkwithWINSemi,whileChinese

smartphonedemandstartstoshow

recovery.Wecontinuetosee?ercepricingcompetitionfromitspeers.Utilizationrateremainsataround60-70%in2024.

NT$113.00

BEARCASE

16x2025eEPS

3Dsensing,5GandwiFi7adoptionfreeze

ARadoptionratedeclineswithoutkiller

applicationsin2024.EMsmartphone

demanddoesnotrecover,while5GandWiFi7commercializationisfurtherdelayed.

MajorcommunicationsPAcustomers?ndalternativepartnerswithsimilarGaAs

technologies,whilePAcustomer

Qualcomm'sRFdemandmissesourbasecaseexpectationssigni?cantly.

MorganStanleyResearch11

12

Morganstanley

RESEARCH

Idea

RiskReward–WINSemiconductorsCorp(3105.TWO)

KEYEARNINGSINPUTS

Drivers

Wafershipments(6"equiv)(NT$,mn)

2023

222

2024e

304

2025e

352

2026e

387

BlendedwaferASP(US$)(NT$,mn)

1,877

1,845

1,827

1,808

Utilizationrate(%)(%)43.059.068.275.0

INVESTMENTDRIVERS

·3Dsensingadoptioninsmartphonesorfasterdeploymentfor5G

·Sharegainsforkeyfablesscustomersatamoresigni?cantspeed

·Chinesesmartphonedemand

GLOBALREVENUEEXPOSURE

APAC,exJapan,Mainland

●0-10%

●0-10%●0-10%●20-30%●60-70%

ChinaandIndiaEuropeexUK

UK

NorthAmericaMainlandChina

Source:MorganStanleyResearchEstimate

Viewexplanationofregionalhierarchieshere

RISKSTOPT/RATING

RISKSTOUPSIDE

·WINSemiisabletoraiseASPmorethan10%in2024.

·Grossmarginimprovementisstrongerthanexpected.

·SeemoreordersfromApplefornext-geniPhoneRF.

RISKSTODOWNSIDE

·Noadoptionof3DsensingandARapplicationswithoutkillerapplications.

·Slowdowninoutsourcingtrendamongintegrateddevicemanufacturers.

·Build-upofcomponentinventoriesamidpoorsmartphonedemand.

OWNERSHIPPOSITIONING

61.4%

Inst.Owners,%Active

Source:Re?nitiv,MorganStanleyResearch

MSESTIMATESVS.CONSENSUS

FYDec2024e

Sales/Revenue

(NT$,mn)

17,809◆

19,059

18,718

EBITDA

(NT$,mn)

5,233

5,816

6,510

6,191

Netincome

(NT$,mn)

1,236

1,397

1,956

1,708

EPS

(NT$)

2.91

3.29

5.65

4.14

MeanMorganStanleyEstimates

Source:Re?nitiv,MorganStanleyResearch

Morganstanley

RESEARCH

Idea

WINSemi:FinancialSummary

Exhibit21:WINSemi:Financialsummary

Source:Companydata,MorganStanleyResearch.E=MorganStanleyResearchestimates.

MorganStanleyResearch13

Morganstanley

RESEARCH

Idea

14

AWSC:EarningsEstimateRevisionsAndQuarterlyFinancials

Welowerour2024,2025and2026EPSestimatesby20%,38%and19%,

respectively:Toreflecttheslower-than-expectrecoveryofsmartphonePAdemandandweakChinaRFdemand,welowerourrevenuegrowthforecastsforAWSCin2024-2026e.Inaddition,weanticipatethematerialcosts,suchasgold,tocontinuerising,whichwill

furtherharmthegrossmargin.Wealsoexpectahigherexpensesratiofor2024-2026egivenrisingR&Dinvestment.Therefore,welowerour2024-26grossmarginforecastsby1.5ppts,3.1pptsand1.6ppts,andouroperatingmarginforecastsby2.2ppts,4.5pptsand2.2ppts.

Exhibit22:AWSC:Estimaterevisions

Source:MorganStanleyResearch(e)estimates.

Exhibit23:AWSC:Quarterlyearningssummary

Source:Companydata,MorganStanleyResearch.e=MorganStanleyResearchestimates.

AWSC:ValuationMethodology

Welowerourpricetarget(basecasevalue)fromNT$140toNT$96:Thisreflectstheourchangestotheearningsforecasts.Wealsorolloverourmodelfrom2024to2H24-1H25.

Wecontinuetoderiveourpricetargetfromaresidualincomemodel,whichwebelievebestcapturesthestock'slong-termvalue.Ourkeyassumptionsareunchanged:acostofequityof9.2%(betaof1.2,equityriskpremiumof6.0%andrisk-freerateof2.0%),

intermediategrowthrateof16%,andaterminalgrowthrateof4%.

WealsolowerourbullcasevaluefromNT$200toNT$137,implying3.7x2025eBVPS.OurbearcasevaluefallsfromNT$72toNT$49,implying1.3x2025eBVPS.

Exhibit24:AWSC:Residualincomemodel

Source:MorganStanleyResearchestimates.

Exhibit25:AWSC'shistoricalforwardP/Bband

Source:FactSet,MorganStanleyResearchestimates

MorganStanleyResearch15

16

Morganstanley

RESEARCH

Idea

RiskReward–AdvancedWirelessSemiconductorCo(8086.TWO)

Slower-than-expectsmartphonePAdemandrecovery;EW

PRICETARGETNT$96.00

Basecase,residualincomemodel.Ourkeyassumptionsincludeacostofequityof9.2%(betaof1.2,equityriskpremiumof6.0%andrisk-freerateof2.0%),medium-termgrowthrateof16%,andaterminalgrowthrateof4%.

EQUAL-WEIGHTTHESIS

.WedoubtthatAWSCcangainmarketsharefromWINSemigivenweakdemandfromcustomers.

.China'sAndroidphoneRFdemandis

slowingin2H24;althoughinventorylevelsarestillmanageable.

.WebelieveAWSC'scustomersstillpreferrushordersduetolowbusinessvisibility.

.Weexpectspecmigration(suchasWiFi7)

ConsensusPriceTargetDistribution

Source:Re?nitiv,MorganStanleyResearch

NT$142.00

NT$96.00◆NT$168.00

MSPT

Mean◆MorganStanleyEstimates

RISKREWARDCHART

TWD

andsharegainopportunitytosustaingrowthin2024and2025.

.Ourpricetargetimplies2025eP/Bof2.6x,vs.1.6-9.2xsince2012,whichwethinkitisfairgivendecliningdemandinthenear

term.

160

120

80

40

',o

NT$137.00(+39.23%)

NT$96.00(-2.44%)

NT$49.00(-50.20%)

ConsensusRatingDistribution

50%Overweight50%Equal-weight0%Underweight

MSRating

Source:Re?nitiv,MorganStanleyResearch

RiskRewardThemes

0

OCT'23APR'24OCT'24

key:HistoricalStockPerformanceCurrentStockPrice

Source:Re?nitiv,MorganStanleyResearch

OCT'25

◆PriceTarget

SecularGrowth:Positive

SpecialSituation:Positive

ViewdescriptionsofRiskRewardsThemeshere

NT$137.00

BULLCASE

3.7x2025eBVPS

strongersalesgrowthwithfasteroperating

marginimprovement:1)RevenueCAGRof>30%in2023-26e,with?atgrowthin2025;2)grossmarginincreasesto>30%in2025from23.4%in2024and15.2%in2023;3)

upsideifChina'ssmartphonedemandpicksupmoresigni?cantlyin2H24and2025.

NT$96.00

BASECASE

2.6x2025eBVPS

Revenuetodeclinemorein2025with

marginerosion:1)Revenuetodeclineby13%Y/Yin2025withCAGRof17%in2023-26e;2)grossmarginlowerto22.1%in2025from23.4in2024,butupfrom15.2%in2023;3)enddemandshowsslowrecoveryin2H24and2025vs.severecorrectionin2022and2023.

NT$49.00

BEARCASE

1.3x2025eBVPS

slowersalesgrowthwithsofteroperating

margin:1)RevenueCAGRof10%in2023-26e,with>20%Y/Ydeclinein2025;2)

grossmarginlowerto16%in2025from23.4%in2024and15.2%in2023;3)enddemandbecomesweakerthanexpectedin2025.

Morganstanley

RESEARCH

Idea

RiskReward–AdvancedWirelessSemiconductorCo(8086.TWO)

KEYEARNINGSINPUTS

Drivers

Wafershipments(6"equiv)(NT$,mn)

2023

95

2024e

153

2025e

141

2026e

156

BlendedwaferASP(US$)(NT$,mn)926929943953

Utilizationrate(%)(%)37.557.953.259.0

INVESTMENTDRIVERS

·Revenuemomentum,drivenbydemandtrends·Structuraldemandbackedbykeyclients'

businessmomentum

·China'sRFlocalizationdemand

GLOBALREVENUEEXPOSURE

●0-10%●0-10%

●20-30%

●20-30%●30-40%

EuropeexUKUK

APAC,exJapan,Mainland

ChinaandIndiaNorthAmericaMainlandChina

Source:MorganStanleyResearchEstimate

Viewexplanationofregionalhierarchieshere

RISKSTOPT/RATING

RISKSTOUPSIDE

·AWSCisabletomaintainASP.

·Grossmarginisbetterthanfeared.

RISKSTODOWNSIDE

·Keyclientdemandisweakerthanexpected.

·AWSC'spricingpowerwithcustomersbecomesweakerthanweexpect.

·AWSCshowsweaker-than-expectedexecution.

OWNERSHIPPOSITIONING

64.7%

Inst.Owners,%Active

Source:Re?nitiv,MorganStanleyResearch

MSESTIMATESVS.CONSENSUS

FYDec2025e

Sales/Revenue

(NT$,mn)

3,899◆

6,170

5,428

EBIT

(NT$,mn)

475

1,345

982

Netincome

(NT$,mn)

410

1,110

857

EPS

(NT$)

2.09

5.65

4.12

ROE

(%)

5.5

11.6

10.3

Mean◆MorganStanleyEstimates

Source:Re?nitiv,MorganStanleyResearch

MorganStanleyResearch17

18

Morganstanley

RESEARCH

Idea

AWSC:FinancialSummary

Exhibit26:AWSC:Financialsummary

Source:Companydata,MorganStanleyResearch.E=MorganStanleyResearchestimates.

Morganstanley

RESEARCH

Idea

Maxscend:EarningsEstimateRevisionsAndQuarterlyFinancials

WelowerourEPSforconsensusestimatesby4%for2024,8%for2025,and9%for2026:WeexpecttheweakChinaRFdemandwillputpressureonMaxscend'srevenue

growth.AsMaxscend'sinventorycontinuestobuildup,wealsoanticipategrossmargintofaceheadwindswithpotentialinventorywrite-offrisk.Inaddition,weexpecttheexpenseratioofMaxscendtofurtherincreaseduetointensifiedcompetitioninRFswitches,LNA,etc.Therefore,welowerouroperatingmarginforecastsby0.4ppts,0.9pptsand1.0ppts.

Exhibit27:Maxscend:Estimaterevisions

Source:MorganStanleyResearch(e)estimates.

MorganStanleyResearch19

20

Morganstanley

RESEARCH

Idea

Exhibit28:Maxscend:Quarterlyearningssummary

Source:Companydata,MorganStanleyResearch.e=MorganStanleyResearchestimates.

Morganstanley

RESEARCH

Idea

Maxscend:ValuationMethodology

OurpricetargetisunchangedatRmb57:WefactorinourEPSestimatechangesfor2024-26.Werolloverourmodelfrom20224to2H24-1H25,whichoffsetstheimpactfromEPScutsonthepricetarget.

Wederiveourpricetargetfromaresidualincomemodel.Webelievethismethodologybestreflectsastock'slong-termvalue.Ourkeyassumptionsareunchanged:a9.2%costofequity(beta1.2,risk-freerate2.0%andriskpremium6%),intermediategrowthrateof14%,andterminalgrowthrateof5.5%.

Accordingly,weremainourbullandbearcasevaluesatRmb95andRmb35,respectively.

Exhibit29:Maxscend:ResidualIncomemodel

Source:Companydata,MorganStanleyResearch(e)estimates

MorganStanleyResearch21

22

Morganstanley

RESEARCH

Idea

Exhibit30:Maxscend'sP/Evaluationchart

Source:FactSet,MorganStanleyResearch(e)estimates

Morganstanley

RESEARCH

Idea

RiskReward–MaxscendMicroelectronicsCoLtd(300782.SZ)

Outlookremainschallenging;UW

PRICETARGETRmb57.00

Basecase,residualincomemodel.Weassumeacostofequityof9.2%(beta1.2,risk-freerate2.0%andriskpremium5.5%),amedium-termgrowthrateof14.0%,aterminalgrowthrateof5.5%.

Rmb93.04

ConsensusPriceTargetDistribution

Source:Re?nitiv,MorganStanleyResearch

Rmb55.00◆◆Rmb166.00

MSPT

Mean◆MorganStanleyEstimates

RISKREWARDCHART

CNY

160

Rmb95.00(-7.61%)

120

80

Rmb57.00(-44.57%)

40

Rmb35.00(-65.96%)

0

OCT'23