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MediaTek Inc 2454

Morningstar Rating
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Stock XTAI Rating as of
TWD 1,015.00 +10.00 (1.00%)
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As of Delayed Price Closed
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Company Report

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MediaTek Earnings: Great Period With Smartphone and Enterprise Customers Willing to Pay for AI

Phelix Lee

We retain our fair value estimate for MediaTek of TWD 1,400 per share after slightly revising up 2024 numbers to account for updated guidance and first-quarter results, with no change to our long-term view. MediaTek’s share price is attractive, as we think the market underestimates customers’ willingness to pay a premium for chips with topnotch artificial intelligence features. In the long term, the know-how in AI on smartphones may be partially replicated on enterprise AI chips as the need for power efficiency is the same, which may pose upside potential to our base case.

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Price vs Fair Value

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2454 is trading at a 28% discount.
Price
TWD 1,015.00
Fair Value
TWD 6,284.00
Uncertainty
High
1-Star Price
TWD 8,275.00
5-Star Price
TWD 353.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

A smaller technological gap compared with Qualcomm enables MediaTek to capture market share in 5G smartphone SoCs.

Bears

Smartphone vendors who design their own SoCs will gain market share. With stable phone shipments, MediaTek’s addressable market will shrink.

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Trading Information

Previous Close Price
TWD 1,055.00
Day Range
TWD 1,005.00–1,055.00
52-Week Range
TWD 652.00–1,275.00
Bid/Ask
TWD 1,010.00 / TWD 1,015.00
Market Cap
TWD 1.62 Tril
Volume/Avg
8.0 Mil / 8.2 Mil

Key Statistics

Price/Earnings (Normalized)
20.52
Price/Sales
3.73
Dividend Yield (Trailing)
9.91%
Dividend Yield (Forward)
9.91%
Total Yield
9.91%

Company Profile

Founded in 1997, MediaTek is a fabless semiconductor designer focusing on solutions for smartphones, digital televisions, and connectivity products. The business is divided into three segments. The first is "mobile," which accounts for around half of sales, where MediaTek is the second-largest third-party supplier of smartphone SoCs to the likes of Xiaomi and Vivo. The second is "smart edge," which accounts for just over 40% of sales, that covers most devices other than smartphones. The third is "power IC" that includes power management products for mobile devices, data centers, connectivity devices and more. Mediatek is headquartered in Hsinchu, Taiwan and employs almost 22,000 people.
Sector
Technology
Industry
Semiconductors
Stock Style Box
Large Core
Total Number of Employees
6,999
Website
https://www.mediatek.com

Competitors

Valuation

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Metric
2454
QCOM
SWKS
Price/Earnings (Normalized)
 20.5218.6112.77
Price/Book Value
 4.398.032.60
Price/Sales
 3.735.143.49
Price/Cash Flow
 17.3718.2710.13
Price/Earnings
2454
QCOM
SWKS

Financial Strength

Metric
2454
QCOM
SWKS
Quick Ratio
 1.041.702.77
Current Ratio
 1.252.565.02
Interest Coverage
 200.0011.8618.04
Quick Ratio
2454
QCOM
SWKS

Profitability

Metric
2454
QCOM
SWKS
Return on Assets (Normalized)
 12.60%19.76%14.79%
Return on Equity (Normalized)
 20.78%47.69%21.53%
Return on Invested Capital (Normalized)
 17.89%27.85%17.15%
Return on Assets
2454
QCOM
SWKS
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