IQE

LN: IQE

£374.5m market cap

47p last close

IQE is the leading supplier of epitaxial compound semiconductor wafers globally. The principal applications include radio frequency semiconductors, devices for optical networks, vertical cavity lasers, infrared semiconductors and power electronics.

Investment summary

IQE has announced that it expects H120 revenues to be at least £85m. This is 27% higher than H119 and a record first half performance and is expected to take the group to low single digit million adjusted operating profit in H120 compared with £1.9m loss in H119. Despite this encouraging start to the year, we leave our estimates unchanged given the prevailing uncertainty regarding the impact of the coronavirus pandemic on global handset demand.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2018A 156.3 26.4 14.0 1.38 34.1 21.1
2019A 140.0 16.2 (7.0) (2.46) N/A 41.3
2020E 143.7 19.4 (6.2) (0.83) N/A 28.5
2021E 164.9 38.7 11.6 1.13 41.6 10.4
Industry outlook

During H120 IQE’s long-standing wireless customers have benefited from major design wins and investment in 5G infrastructure. IQE is also taking share in the Asian wireless market. Production for IQE’s major vertical cavity surface emitting laser (VCSEL) customer was consistently strong throughout the period.

Last updated on 15/07/2020
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (18.0) 25.5 (19.2)
Relative* (20.7) 11.4 (4.6)
52-week high/low 75.0p/20.0p
*% relative to local index
Key management
Phil Smith Chairman
Drew Nelson CEO
Tim Pullen CFO

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