£439.3m market cap
55.1p 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 | 39.9 | 24.7 |
| 2019A | 140.0 | 16.2 | (7.0) | (2.46) | N/A | 48.5 |
| 2020E | 165.6 | 28.7 | 3.1 | 0.28 | 196.8 | 18.9 |
| 2021E | 178.2 | 36.8 | 10.9 | 1.05 | 52.5 | 14.8 |
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 18/09/2020
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| Forecast net debt (£m) | N/A |
| Forecast gearing ratio (%) | N/A |
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Key management |
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| Phil Smith | Chairman |
| Drew Nelson | CEO |
| Tim Pullen | CFO |
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