Alpha and Omega Semiconductor Limited CAPEX surged on 279% and Revenue increased on 10.0%
08/08/2018 • About Alpha and Omega Semiconductor Limited (
$AOSL) • By InTwits
Alpha and Omega Semiconductor Limited reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Alpha and Omega Semiconductor Limited has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.1%. At the same time it's a lot of higher than industry average of 7.6%.
- CAPEX is quite volatile: $178m in FY2018, $47m in FY2017, $22m in FY2016, $21m in FY2015, $9m in FY2014
- The company has potentially unprofitable business model: ROIC is 2.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 10.0%. Revenue growth showed acceleration in FY18Q4 - it increased 12.1% YoY. Revenue decline was slowing down on average by 4.3 pp per annum in the last 5 years. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.95 pp from 5.6% to 6.5% in 2018.
Gross Margin increased on 2.6 pp from 24.0% to 26.6% in FY2018. Gross Margin followed a growing trend at 2.1 pp per annum in FY2014-FY2018. SG&A as a % of Revenue increased on 3.0 pp from 12.7% to 15.7% in FY2018. SG&A as a % of Revenue grew at 1.1 pp per annum in FY2014-FY2018.
Net Income margin showed almost no change in FY2018.
Investments (CAPEX, working capital and M&A)
Alpha and Omega Semiconductor Limited's CAPEX/Revenue was 42.2% in FY2018. Alpha and Omega Semiconductor Limited's CAPEX/Revenue surged on 35.6 pp from 6.6% in FY2015 to 42.2% in FY2018. For the last three years the average CAPEX/Revenue was 20.3%. The company maintained rich investment policy and has spent a lot to CAPEX (470% of EBITDA).
Return on investment
The company operates at low ROIC (2.1%) and ROE (5.2%). ROIC decreased on 2.7 pp from 4.8% to 2.1% in FY2018. ROE showed almost no change in FY2018.
Leverage (Debt)
Debt level is -1.0x Net Debt / EBITDA and 2.4x Debt / EBITDA. Debt jumped on 5,324% while cash surged on 13.7%.
Alpha and Omega Semiconductor Limited has no short term refinancing risk: cash is higher than short term debt (1,584.4%).
Valuation and dividends
Alpha and Omega Semiconductor Limited's trades at EV/EBITDA 7.7x and P/E 23.2x.
Management team
Mike F Chang is a Alpha and Omega Semiconductor Limited's CEO. Mike F Chang is a founder and has spent 6 years with the company. The company's CFO is Yifan Liang. Yifan Liang has 5 years tenure at the company.
Financial and operational results
FY ended 06/30/2018
Alpha and Omega Semiconductor Limited ($AOSL) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 318.1 | 327.9 | 335.7 | 383.3 | 421.6 | 10.0% |
| Gross Profit | 59.1 | 60.5 | 65.8 | 91.8 | 111.9 | 21.9% |
| SG&A | 34.9 | 37.6 | 37.9 | 48.8 | 66.2 | 35.5% |
| EBITDA | 27.7 | 23.3 | 28.8 | 40.3 | 37.8 | -6.2% |
| Net Income | -3.3 | -7.8 | -2.9 | 13.8 | 14.3 | 3.1% |
Balance Sheet
|
|---|
| Cash | 117.8 | 106.1 | 87.8 | 115.7 | 131.5 | 13.7% |
| Short Term Debt | 14.9 | 0.9 | 0.8 | 0.8 | 8.3 | 902.7% |
| Long Term Debt | 1.0 | 0.1 | 1.7 | 0.9 | 83.6 | 9,550.9% |
Cash flow
|
|---|
| Capex | 9.4 | 21.5 | 21.9 | 46.9 | 177.7 | 279.4% |
Ratios
|
|---|
| Revenue growth | -5.7% | 3.1% | 2.4% | 14.2% | 10.0% | |
| EBITDA growth | -1.4% | -15.7% | 23.5% | 40.0% | -6.2% | |
|
|---|
| Gross Margin | 18.6% | 18.4% | 19.6% | 24.0% | 26.6% | 2.6% |
| EBITDA Margin | 8.7% | 7.1% | 8.6% | 10.5% | 9.0% | -1.5% |
| SG&A, % of revenue | 11.0% | 11.5% | 11.3% | 12.7% | 15.7% | 3.0% |
| Net Income Margin | -1.0% | -2.4% | -0.9% | 3.6% | 3.4% | -0.2% |
| CAPEX, % of revenue | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% | 29.9% |
|
|---|
| ROIC | -0.1% | -1.5% | 0.6% | 4.8% | 2.1% | -2.7% |
| ROE | -1.2% | -2.8% | -1.1% | 5.4% | 5.2% | -0.2% |
| Net Debt/EBITDA | -3.7x | -4.5x | -3.0x | -2.8x | -1.0x | 1.8x |
Alpha and Omega Semiconductor Limited ($AOSL) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 105 | 104 | 103 | 110 | | 7.7% | 9.7% | 10.3% | 12.1% |
| EBITDA | 12 | 11 | 8 | 8 | | 12.9% | 10.8% | -18.0% | -29.0% |
| Net Income | 5 | 7 | 2 | 1 | | 45.1% | 138.5% | -53.6% | -75.2% |
Balance Sheet
|
|---|
| Cash | 180 | 146 | 125 | 132 | | 51.7% | 19.1% | 7.8% | 13.7% |
| Short Term Debt | 1 | 1 | 3 | 8 | | 4.5% | 4.6% | 264.3% | 902.7% |
| Long Term Debt | 1 | 0 | 11 | 84 | | -55.9% | -65.4% | 936.1% | 9,550.9% |
Ratios
|
|---|
| Gross Margin | 26.3% | 27.0% | 26.4% | 26.6% | | 3.7% | 3.7% | 2.0% | 1.0% |
| EBITDA Margin | 11.0% | 10.2% | 7.9% | 6.8% | | 0.5% | 0.1% | -2.7% | -4.0% |
| Net Income Margin | 4.6% | 6.5% | 1.6% | 0.9% | | 1.2% | 3.5% | -2.2% | -3.3% |
Peers in Semiconductors
Below we provide Alpha and Omega Semiconductor Limited benchmarking against other companies in Semiconductors industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NanoFlex Power Corp ($OPVS) | | | | 72.5% | 354.8% |
| MoSys, Inc. ($MOSY) | | -18.4% | 37.2% | 46.8% | 87.7% |
| SMART Global Holdings, Inc. ($SGH) | | | -16.9% | 42.5% | 69.3% |
| Micron Technology, Inc. ($MU) | | -1.0% | -23.4% | 63.9% | 49.5% |
| Adesto Technologies Corporation ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
| |
|---|
| Median (67 companies) | 54.6% | 9.7% | 5.2% | 10.9% | 4.7% |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | | 3.1% | 2.4% | 14.2% | 10.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CEVA, Inc. ($CEVA) | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% |
| NVE Corporation ($NVEC) | 77.9% | 80.3% | 76.1% | 78.5% | 79.0% |
| Rambus, Inc. ($RMBS) | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% |
| Universal Display Corporation ($OLED) | 76.0% | 64.2% | 83.9% | 80.8% | 75.5% |
| Intermolecular, Inc. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
| |
|---|
| Median (65 companies) | 46.4% | 47.7% | 48.0% | 49.1% | 51.0% |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 18.6% | 18.4% | 19.6% | 24.0% | 26.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NVE Corporation ($NVEC) | 58.8% | 66.0% | 61.8% | 65.6% | 65.1% |
| Micron Technology, Inc. ($MU) | 31.7% | 35.0% | 25.4% | 47.9% | 65.0% |
| NXP Semiconductors N.V. ($NXPI) | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% |
| Texas Instruments Incorporated ($TXN) | 39.7% | 42.0% | 43.5% | 46.7% | 48.6% |
| Intel Corp ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
| |
|---|
| Median (66 companies) | 9.9% | 11.5% | 9.2% | 10.7% | 10.0% |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 8.7% | 7.1% | 8.6% | 10.5% | 9.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Renesola Ltd. ($SOL) | 3.5% | 0.0% | 0.0% | 78.0% | 41.7% |
| First Solar, Inc. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
| Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
| Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
| Sequans Communications S.A. ($SQNS) | 0.0% | 16.9% | 11.8% | 13.3% | 22.9% |
| |
|---|
| Median (66 companies) | 3.6% | 4.0% | 3.6% | 4.7% | 4.4% |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | | 2.5% | 21.5% | 51.7% |
| Texas Instruments Incorporated ($TXN) | 25.1% | 29.8% | 34.9% | 43.1% | 47.5% |
| Micron Technology, Inc. ($MU) | 18.8% | 15.8% | 0.8% | 21.5% | 42.9% |
| Applied Materials Inc ($AMAT) | 15.8% | 15.2% | 19.0% | 31.2% | 36.4% |
| NVIDIA Corporation ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
| |
|---|
| Median (73 companies) | 5.7% | 3.8% | 1.7% | 3.2% | 5.2% |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | -0.1% | -1.5% | 0.6% | 4.8% | 2.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x |
| Inphi Corporation ($IPHI) | | -6.4x | 4.5x | 33.7x | 32.2x |
| JinkoSolar Holding Company Limited ($JKS) | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x |
| Lattice Semiconductor Corporation ($LSCC) | -1.8x | | 6.5x | 19.0x | 3.9x |
| Renesola Ltd. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
| |
|---|
| Median (45 companies) | -0.5x | -0.2x | 0.4x | 0.4x | 0.3x |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | -3.7x | -4.5x | -3.0x | -2.8x | -1.0x |
