【招银国际】闻泰科技（600745）-Valuation to improve on ODM business spin-off-250103（6页）.pdf

1、 PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG:RESP CMBR OR http:/.hk 1 MN 3 Jan 2025 CMB International Global Markets|Equity Research|Company Update Wingtech(600745 CH)Valuation to improve on ODM business spin-off On December 31,2024,Wingte

2、ch signed a“Letter of Intent for Sale”for nine wholly-owned ODM subsidiaries with Luxshare Limited in an all-cash deal.This move follows its recent addition to the US trade blacklist(news).According to mgmt.,this transaction serves two primary purposes:(1)to align with the risk preferences of certai

3、n ODM clients,and(2)to mitigate potential risks to its semiconductor leg.The deal reflects a broader 2025 trend of event-driven M&A opportunities in Chinas semiconductor sector amid strategic geopolitical shifts and favourable policies,as indicated in our 2025 outlook report as a new investment them

4、e(link).Maintain BUY on Wingtech,with TP unchanged at RMB52.The sale exclusively involves its Android-focused ODM business,a burden on the companys financial performance and valuation.Together,these subsidiaries held a total asset value of RMB28.2bn as of 9M24,representing 36.1%of the companys total

5、 assets and over 50%of total revenue(triggering one of CSRCs asset restructuring regulations)in 3Q24.In 9M24,the ODM segment contributed 79%of total revenue but recorded a substantial net loss of RMB1.2bn.Wingtech will focus on its high-margin semiconductor business,Nexperia.In 9M24,semi segment gen

6、erated RMB10.9bn in sales(20%of total revenue),with GPM at 37%(RMB4bn)and NPM at 16%(RMB1.7bn),outperforming the companys overall 9%GPM and 1%NPM during the same period.In 2Q/3Q24,semi segment saw sequential growth of 6%/6%,driven by 1)strong domestic auto sales,recovering consumer electronics and r