IQE

LN: IQE

£436.9m market cap

54.8p 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’s revenues grew by 35% year-on-year during H120 to a record £89.9m, taking the group from a £1.9m adjusted operating loss in H119 to a £4.3m adjusted operating profit. We upgrade our FY20 estimates in line with management’s guidance. The resultant 15% revenue upgrade changes the outcome from a loss to £3.1m adjusted PBT.

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 39.7 24.6
2019A 140.0 16.2 (7.0) (2.46) N/A 48.2
2020E 165.6 28.7 3.1 0.28 195.7 18.8
2021E 178.2 36.8 10.9 1.05 52.2 14.7
Industry outlook

During H120 IQE’s long-standing wireless customers 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 17/09/2020
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Sector
TMT
Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (10.2) (0.2) (6.3)
Relative* (9.2) 2.3 11.6
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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