External reports (aggregated public sources), Value Investors Club

Value Investors Club

External reports (aggregated public sources)

Equity Bottom-Up

<ul><li>Power Integrations (POWI) is facing persistently low earnings quality over the past five quarters due to a channel inventory adjustment, which they claim is almost complete</li><li>Revenues have dropped by 37% since 2021, casting doubt on whether the adjustment fully explains the decline</li><li>Financial performance in 2024 could lead to a shift in the investment narrative towards normalized revenues below recent peaks and increased competition from Chinese semiconductor vendors, potentially affecting earnings and forward multiples</li></ul>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Power Integrations (POWI) is facing persistently low earnings quality over the past five quarters due to a channel inventory adjustment, which they claim is almost completeRevenues have dropped by 37% since 2021, casting doubt on whether the adjustment fully explains the declineFinancial performance in 2024 could lead to a shift in the investment narrative towards normalized revenues below recent peaks and increased competition from Chinese semiconductor vendors, potentially affecting earnings and forward multiplesThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Power Integrations Inc (POWI) - Wednesday, Mar 20, 2024

Asia and Global Semiconductor and Tech Research

Andrew Lu

<ul>
<li>Microchip used to be the bellwether for semiconductor demand After many semis guided weaknesses in automotive, industrial, and digital consumer much earlier, Microchip's 19% miss in 1Q24 gives no surprise.</li>
<li>
Why the worst among all? We attributed Microchip to over 85% of its products on automotive, industrial, and digital consumer. Other semis have higher exposure on PC and comm.</li>
<li>
Priced in? We estimate over 20% y/y decline in 2024 sales vs. Bloomberg's -8% y/y. 2024E EPS of US$2.94 is likely below US$1. Price is only 10% below historical peak.</li>
</ul>


Microchip used to be the bellwether for semiconductor demand After many semis guided weaknesses in automotive, industrial, and digital consumer much earlier, Microchip's 19% miss in 1Q24 gives no surprise.

Why the worst among all? We attributed Microchip to over 85% of its products on automotive, industrial, and digital consumer. Other semis have higher exposure on PC and comm.

Priced in? We estimate over 20% y/y decline in 2024 sales vs. Bloomberg's -8% y/y. 2024E EPS of US$2.94 is likely below US$1. Price is only 10% below historical peak.


From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All?

Thematic (Sector/Industry)

<ul>
<li>Continuous weaknesses to be seen in industrial and general non-AI server semi demand starting 3Q23 and lasting into 1Q24 and some weaknesses in digital consumer semi demand starting 4Q23.</li>
<li>Memory semiconductor vendors see strengths in 4Q23 and continuous improvement in DRAM/NAND price in 1Q24.</li>
<li>We see a healthy mid single digit q/q and y/y decline on 4Q23 MOI but suggest vendors to avoid in next 1-2 months before they guide down the market.</li>
</ul>


Continuous weaknesses to be seen in industrial and general non-AI server semi demand starting 3Q23 and lasting into 1Q24 and some weaknesses in digital consumer semi demand starting 4Q23.
Memory semiconductor vendors see strengths in 4Q23 and continuous improvement in DRAM/NAND price in 1Q24.
We see a healthy mid single digit q/q and y/y decline on 4Q23 MOI but suggest vendors to avoid in next 1-2 months before they guide down the market.


First Run of Tech/Semis' Guidance Tells Us What Industries and Companies to Avoid

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>This is our first report on analog and mixed-signal integrated circuits manufacturer, Power Integrations.</li><li>The company' Q3 2021 Financial Results depict a mixed picture with modest sequential growth but a contraction in sales year-over-year.</li><li>For Q4, Power Integrations expects a sequential decrease to $90 million at the midpoint of the range, largely reflecting broad-based weakness echoed by industry peers amid challenging macroeconomic conditions.</li></ul>

This is our first report on analog and mixed-signal integrated circuits manufacturer, Power Integrations.The company' Q3 2021 Financial Results depict a mixed picture with modest sequential growth but a contraction in sales year-over-year.For Q4, Power Integrations expects a sequential decrease to $90 million at the midpoint of the range, largely reflecting broad-based weakness echoed by industry peers amid challenging macroeconomic conditions.

Power Integrations: Initiation of Coverage – Design Wins Defying Odds! How Power Integrations Is Capturing the Tech Market Amidst Challenges! - Major Drivers

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Leader Energy Holdings / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/leader-energy-holdings" target="_blank" data-smartkarma-citation="entities:39938:1" rel="noopener">Leader Energy Holdings (1814173D MK)</a> is looking to raise up to US$215m in its upcoming Malaysia IPO. </li>
<li>Leader Energy Holdings (LE) is an independent power producer (IPP) primarily engaged in the development, ownership, O&amp;M of power assets and projects.</li>
<li>LE’s revenue has grown on the back of higher power generation as well as coal price increases over the track record period, which drove profitability up. </li>
</ul>



Leader Energy Holdings (1814173D MK) is looking to raise up to US$215m in its upcoming Malaysia IPO. 
Leader Energy Holdings (LE) is an independent power producer (IPP) primarily engaged in the development, ownership, O&amp;M of power assets and projects.
LE’s revenue has grown on the back of higher power generation as well as coal price increases over the track record period, which drove profitability up. 


Leader Energy Holdings Pre-IPO - Still Too Early for an ESG Angle

United States

Power Integrations, Inc. designs, develops, and markets analog integrated circuits for use in alternating current (AC) to direct current (DC) power conversion.  The Company sells its products to original equipment manufacturers in the cellular telephone, consumer electronics, personal computer, and industrial electronics industries.

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Power Integrations (POWI US)

Power Integrations Inc (POWI) - Wednesday, Mar 20, 2024

Power Integrations (POWI) is facing persistently low earnings quality over the past five quarters due to a channel inventory adjustment, which they...

Value Investors Club

From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All?

From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All? For next six months, we like both Intel and Qualcomm more...

Andrew Lu

First Run of Tech/Semis' Guidance Tells Us What Industries and Companies to Avoid

First Run of Tech/Semis' Guidance Tells Us What Industries and Companies to Avoid; Weaknesses to be seen in industrial, general non-AI server semi,...

Andrew Lu

Power Integrations: Initiation of Coverage – Design Wins Defying Odds! How Power Integrations Is Capturing the Tech Market Amidst Challenges! - Major Drivers

This is our first report on analog and mixed-signal integrated circuits manufacturer, Power Integrations. The company' Q3 2021 Financial Results...

Baptista Research

Leader Energy Holdings Pre-IPO - Still Too Early for an ESG Angle

Leader Energy Holdings (1814173D MK) is looking to raise up to US$215m in its upcoming Malaysia IPO. LE’s revenue has grown on the back of higher...

Ethan Aw

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