Analyst Reports

Analyst Reports

  • 2020-07-31

China Tonghai Securities: Plover Bay Technologies Limited 1H20 results in-line

Plover Bay Technologies (Plover Bay) delivered a satisfactory set of 1H20 results with net profit decreased by 11% YoY to about USD5.1mn, largely in-line with our expectation considering the negative impact from COVID-19 and seasonality effect. Sales to North America declined as channel partners experienced project delays caused by COVID-19 related shutdowns, while its strategic effort to setup regional warehouses near the end of 2019 has also relieved the needs for inventory restocking among its largest channel partners. Outside of North America, strong sales growth was record in various markets including the Netherlands, UK, Denmark Malaysia, Vietnam and Thailand. An interim dividend of 3.03 HK cents per share was declared for a payout ratio of 79%. We reiterate our BUY rating with TP at HKD1.52 based on a 15x FY20E PER, for 49% upside potential.

  • 2020-03-02

Crosby Securities: New European team could be catalyst, maintain lucrative dividend payout

  • Dividend payout ratio reached 123% in FY19, represented 9.7% dividend yield
  • Near term catalysts: Regional warehouses and new team in Lithuania
  • FusionSIM and PrimeCare could be future growth driver
  • Currently trading at 11.9x FY20 PE, dividend yield is expected to be 8.4% in FY20
  • 2019-08-02

Crosby Securities: Momentum driven by new European R&D and sales team

Warranty services and software licenses business drove sales and GPM growth Plover Bay reported 1H19 revenue of US$22.0m, which grew by 11.6% YoY. SD-WAN router sales recorded growth of 5.5% to US$15.5m in 1H19 on 1) 8.5% YoY growth in wireless SD-WAN sales; and 2) 2.5% YoY decrease in wired SD-WAN router sales. Warranty services and software licenses segments remained the key growth engine, with revenue surged 31.1% and 21.9% YoY respectively on increasing SD-WAN customer base and releasing of new software features. 1H19 GPM went up 0.7ppt YoY to 63.8% on higher sales proportion from higher margin warranty services and software licenses business. 1H19 net profit came in at US$5.8m, up 21.4% YoY. Bottom line outgrew top line thanks to a better GPM and lower opex ratio of 33.1% in 1H19 versus 34.1% a year ago. Interim DPS of HK3.49cents was proposed; represented a same payout ratio of 80% as last year. Proposed dividend payout reached US$4.6m, backed by strong operating cash flow of US$8.7m in 1H19.

  • 2019-07-29

Orient Securities: Plover Bay Tech (1523 HK) Strong dividend and wireless SD WAN growth play

Plover Bay is a wireless focused, niche player in a rapidly expanding SD WAN market. It reported FY18 core net profit/revenue of USD11.4mn/USD41.8mn, up 19.6%/12.6% yoy. The improvement in net margin was due to good cost control/tax benefits facing slower revenue in a soft macro backdrop in FY18. We expect the company to deliver stronger topline growth with expanding GPM/NPM. We estimate FY19E/FY20E core EPS to be US¢1.29/US¢1.56 (21%/20% yoy) to reflect growth acceleration and margin expansion. With a near 100% payout, we expect FY19E/FY20E DPS at HK¢9.9/ HK¢11.33. We initiate at BUY with a TP of HK$2.00.

  • 2019-03-06

Sunwah Kingsway: Plover Bay Tech (1523 HK) SD-WAN expansion intact, strong cash flow

Plover Bay Tech (1523 HK – HK$1.44) SD-WAN expansion intact, strong cash flow 2019 likely to be free of supply woes – One of the reasons for 2018 top-line achieving ‘only’ 13% growth was a shortage of capacitors (MLCC). Chances of another shortage is slim in 2019 as both Japanese (TDK, Kyocera, Murata) and Chinese suppliers have adjusted their production schedules. Memory also ended a yearlong shortage after Micron, SK Hynix and Samsung increased production.

  • 2019-03-01

Oceanwide Securities: FY18 net profit up 21%, TP adjusted to HKD2.07

Plover Bay Technologies (Plover Bay) posted a decent set of FY18 results with net profit increased by 21.3% YoY to about USD10.6mn. Although North American market was not affected by the new US tariff and recorded a 14.4 % YoY growth where EMEA market also up by 34.5% YoY, these were offsetted by a 12.8% decrease in the Asian market and resulted to about 13% below our estimates. A final dividend and a special dividend combined for 5.88 HK cents per share were declared for a full year payout ratio equals 108.5%. We have revised our forecast to reflect the related slowdown. However, we believe its net profit can still maintain a 27.9% CAGR in FY19E-21E given the huge market potential of SD-WAN, particularly with 5G in the coming. We reiterate our BUY rating with a new TP at HKD2.07 based on a 20x FY19E PER or 15.6x FY20E PER, for 66.9% upside potential.

  • 2019-03-01

Crosby Securities: Re-igniting growth engine in FY19

Plover Bay reported 2H18 revenue of US$22.1m, which grew by 14.1% YoY, speeded up from 10.9% YoY growth in 1H18. SD-WAN router sales recorded disappointing growth of 2.3% to US$15.8m in 2H18 due to 1) shortages of certain electronic components, e.g. MLCC; and 2) production capacity constrains by Taiwan OEMs. Revenue from warranty & support services and software licenses surged 50.7% and 145.8%, respectively, on increasing SD-WAN and Cloud services customer bases. 2H18 GPM edged down 0.9ppt to 62.2% HoH. 2H18 net profit came in at US$5.9m, which was up by 27.2% YoY. Net profit outgrew revenue thanks to a significant lower effective tax rate of 8.7% in 2H18, compare to 18.2% in 2H17, which attributed to tax reductions implemented by the HKSAR Government on corporates’ R&D expenses. Final DPS of HK$0.0436 was proposed, alongside with a special DPS of HK$0.0152 on strong operating cash flow of US$19.5m, up from US$2.8m in FY17. Full year dividend payout ratio reached 109%, up from 90% in FY17.

  • 2018-08-01

Oceanwide Securities: 1H18 results in-line, TP maintained at HKD2.57

Plover Bay Technologies (Plover Bay) 1H18 net profit jumped by 14.7% YoY to USD4.1mn. Considering the seasonal effect, the 1H numbers are in-line with our forecast. An interim dividend of 2.92 HK cents per share was declared for a payout ratio of 80%. Citing the tremendous opportunities in the global SD-WAN market and the company’s sustainable product pipeline, as well as the minimal impact from the trade war, an even better 2H18 is expected. We reiterate our BUY rating on Plover Bay with TP of HKD2.57 based on a 20x FY19E PER for 101% upside potential.

  • 2018-08-01

Crosby Securities: Trade war risk is contained; warranty and support services become new drivers

Plover Bay reported 1H18 revenue of US$19.7m, which grew by only 10.9% YoY. Sales to North America and EMEA grew by 22.1% and 25.1% YoY to US$11.6m and US$4.8m thanks to wide SD-WAN adoption across different segments including public transport, public safety and IoT applications. However, sales in Asia dropped 25.7% YoY to US$2.9m due to project delay in Malaysia which dragged the overall growth rate. SD-WAN router sales recorded disappointing growth of 5.5% to US$14.7m in 1H18 due to the delay of project in Malaysia, however, revenue from warranty and support services increased 35.1% to US$4.2m on increasing SD-WAN customer bases, 1H18 gross margin improved 4.1ppt to 63.1% HoH thanks to 1) improving margin from SD-WAN router products and 2) an increase in revenue contribution from high margin software  icenses and warranty and support services. 1H18 net profit came in at US$4.7m, up 14.7% YoY. Interim DPS of HK$0.0292 was proposed, implies a generous payout of 80%, the same as last year.

  • 2018-07-13

Oceanwide Securities: Minimal Impact From the US-China Trade War

Plover Bay Technologies (Plover Bay) made a conference call regarding the possible impact of US tariff. The management confirms that the trade war should have minimal effect to the company’s results, and the company has prepared several plans to handle the new tariff. We have also revised our forecast as the strong momentum in 4Q17 did not extended into 1H18 as originally expected. We reiterate our BUY rating on Plover Bay with a new TP of HKD2.57 based on a 20x FY19E PER, or 27x FY18E PER for 155% upside potential.

  • 2018-04-27

KGI: IoT & Cloud adoption propels SD-WAN business growth

Given rapid deployment, cost savings, and always-on connectivity, SD-WAN has seen rising adoption rates in a few industry verticals, including public safety, construction, and transport. As a leading wireless SD-WAN provider, Plover Bay is set to enjoy multi-year growth on growing IoT adoption and higher mobile bandwidth demand. The company will launch SD-PMU in 2H18F, which is expected to become a new growth driver…

  • 2018-03-05

UOB Kay Hian: Post-results NDR Meeting Takeaways

Plover Bay Technologies is primarily engaged in developing and commercialising software-defined wide area network (SD-WAN) products and solutions under its own brands “Peplink” and “Pepwave”. Riding on the rising affordability and availability of wireless network and the proliferation of cloud/IoT, management is bullish on the future growth of the SD-WAN industry, especially the wireless one, the focal development area of Plover Bay. The counter trades at 29x 2017 PE with a dividend yield of 3%…

  • 2018-03-01

Crosby Securities: Strong 2H17 Results, Booming SD-WAN Markets and Competitive New Products

Plover Bay reported 2H17 revenue of USD19.3mn, grow by 18.5% yoy. Revenue from wireless SD-WAN routers recorded a strong growth of 34.1% thanks to increasing demand for unbreakable mobile connectivity from different industrial verticals such as public transports, maritime, and construction sites…

  • 2018-03-01

Oceanwide Securities: Results Comments: FY17 Results in-line, TP revised up to HKD2.85

Plover Bay Technologies (Plover Bay) posted a strong set of FY17 results with net profit increased by 67.1% YoY to about USD8.8mn, in-line with our forecast. A final dividend of HK cents 3.5 per share was declared, full year payout ratio equals to 90%. Citing the tremendous opportunities in the global SD-WAN market, as well as the upcoming demand from the industrial IoT market, we believe the company would maintain a high growth of 35.5% CAGR in FY18-20E…

  • 2017-08-02

Quam: Research Results Comments: Upbeat 1H17 results, TP revised up to HKD2.57

Plover Bay Technologies posted strong 1H17 results with net profit jumping by 47.6% YoY to USD4.1mn, or about 51% of our original FY17E forecast. An interim dividend of HK cents 2.58 per share was declared. Citing the tremendous opportunities in the global SD-WAN market, as well as the company’s sustainable and innovative product pipeline, we believe the company can maintain its high growth in the near future and thus deserve a higher valuation…

  • 2017-07-07

Quam: Research Initiation Report: Be Connected

Plover Bay Technologies Limited (“Plover Bay”) was the world’s fifth largest Software Defined WAN (“SD-WAN”) vendor in terms of revenue in 2015. With its innovative and patented technologies, robust profitability, committed R&D, as well as the growing market of SD-WAN, we expect the company to record a 45.6% CAGR in net profit in FY17E-19E…

  • 2017-04-25

SC Net: Aims To Focus On SD-Wan Routers For Industrial Verticals

Plover Bay Technologies claims to be the fifth-largest software defined wide area network (SD-WAN) router vendor globally with a 6.4% market share based on 2015 revenue. The company adopts an asset-light business model, whereby it designs and develops SD-WAN routers, outsources the manufacturing process to Taiwan-based contract manufacturers, and sells products under its own brands (Peplink and Pepwave) through third-party distributors…

  • 2017-03-06

Sunwah Kingsway: Analyst Report: Morning Snapshot

Focusing on industrial applications – Plover Bay Tech will continue to focus on four main industries namely transportation, public safety, maritime and unmanned systems. PBT aims to market its high-end routers which support multi-cellular connections (e.g. the Max HD4 router supports 4 LTE connections)…

  • 2017-03-03

Guosen Securities: Analyst Report: Plover Bay Roadshow Recap

We remain positive on Plover Bay despite 4% miss on our FY16 core earnings forecast, as the miss was due to one-off costs. After the roadshow, we are more convinced on the prospects of SD-WAN and believe PB’s strong product lineup and lean operating structure offers potential for multiyear growth. The stock looks attractive at 12x FY16 P/E (vs 15-20x avg for legacy peers) and offers 5% dividend yield…

  • 2017-02-27

Crosby Securities: Analyst Report: Plover Bay’s Unbreakable Connectivity Technology

Plover Bay is a SD-WAN (Software Defined Wide Area Network) router vendor with international business exposures. As traditional WAN router is only connected to one single WAN connection, it is relatively difficult to scale up and relocate. To address the shortcomings, SD-WAN router enables software to pick best performing connections from multiple WAN connections…

  • 2017-02-07

Guosen Securities: Analyst Report: Plover Bay Disruptive Tech Trading At a Discount

Plover Bay (PB) designs and markets SD-WAN routers and software, providing a cost-effective and mobile alternative to conventional wide-area network for enterprise users. We forecast 55% YoY net profit growth in FY16 based on 21% YoY revenue growth and margin improvement from higher mix from software licenses. We believe PB’s shares are undervalued at its current 11x FY16F P/E vs 15x average of US-listed network equipment peers and offers 6% yield…

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