The average target price of 300223.SZ is 61 and suggests 5% downside potential. Usually, this means a SELL recommendation among investment firms, or a recommendation to decrease one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 70.0. This translates into 9% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 58.5. This is equivalent to 9% downside potential in the worst case. 

Ingenic Semiconductor Co.,Ltd. designs micro-processors for CPU technologies. Its products are used in biometric identification devices, education electronics, multimedia players, e-books, tablets, etc. The company was founded in 2005 and is headquartered in Beijing, China.

China

Ingenic Semiconductor Co.,Ltd.

Technology

The company pays dividends from time to time. It has paid dividends in less than half the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. On average, the company pays dividends annually. 

300223.SZ reported revenue of CNY 4 264mn in the last 12 months, up 1% from FY24. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS fell 4% from FY24 to CNY 0.73. Market expects EPS to reach CNY 0.90 in FY25.

The stock has been falling steadily in the past six months, losing 6% in total. The stock has lagged its global peers from the same sector and industry (as shown above), underperforming then by 1ppts in total. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 10.5% in the last 12 months, a decline from 17.3% in FY23. 

Historically, 300223.SZ has reported good net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 8.3%, down from 11.9% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 2.7% in the last 12 months, a decrease from 4.3% in FY23. The market analysts predict that RoA will be 3.6% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to 2.9%, below the peers. The consensus estimate for FY24 for RoCE is 3.9%, again behind the peers. 

Ingenic Semiconductor Co.,Ltd. reported a return on equity (RoE) of 3.0% in the last 12 months, down from 4.7% in FY23. The market consensus projects an RoE of 3.9% in FY24, again behind its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.9 in the past several years. This ratio implies a poor shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

300223.SZ boasts high trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is usually stable and remains extremely favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. 

No other major risks have been identified.

The risk of default is moderate. We note strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, negligible return on capital, and poor working capital management.

In highly turbulent market conditions, 300223.SZ is not overly volatile. In other words, the stock will fall less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be low. 

In normal market circumstances, 300223.SZ is moderately volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move slightly wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from moderate to notable. We would also like to highlight the notable intraday volatility of the instrument. 

From both historical and forecast perspectives, the stock is considerably overpriced compared to similar stocks. In particular, the stock is overpriced on P/E, 'expensive' on EV/EBITDA, overvalued on P/FCF. 

Ingenic Semiconductor Co.,Ltd.

CN¥ 63.65

4

Ingenic Semiconductor Co.,Ltd.

CN¥ 63.65

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CN¥ 63.65

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