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1、Deutsche Bank Markets Research Rating Buy Asia China Technology Software in- dash outlook dampened Reuters Bloomberg Exchange Ticker AMAP.OQ AMAP US NMS AMAP Forecasts And Ratios Year End Dec 31 2011A 2012A2013E2014E2015E Sales (USDm) 127.0 159.7173.0201.6236.8 Reported NPAT (USDm) 36.5 36.532.042.2
2、54.4 Reported EPS FD(USD) 0.73 0.730.640.841.08 DB EPS FD(USD) 0.83 0.980.861.051.30 OLD DB EPS FD(USD) 0.83 0.941.141.34 % Change 0.0% 3.4%-25.0%-21.3% DB EPS growth (%) 48.9 16.9-12.022.922.9 PER (x) 18.4 12.112.410.18.2 Source: Deutsche Bank estimates, company data 1 DB EPS is fully diluted and e
3、xcludes non-recurring items 2 Multiples and yields calculations use average historical prices for past years and spot prices for current and future years, except P/B which uses the year end close BMW impact on in-dash to fully kick in from 4Q12 and through 2013 _ Deutsche Bank AG/Hong Kong Deutsche
4、Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment
5、decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 072/04/2012. Price at 27 Feb 2013 (USD) 10.64 Price target - 12mth (USD) 13.40 52-week range (USD) 13.48 - 9.87 HANG SENG INDEX 22,577 Vivian Hao Research Analyst (+852) 2203 6241 Alan Hellawell III Research Analyst
6、 (+852) 2203 6240 Key changes Price target 16.30 to 13.40 -17.8% Sales (FYE) 182 to 173 -5.0% Op prof margin (FYE) 26.0 to 19.3 -25.6% Net profit (FYE) 45.4 to 32.0 -29.7% Price/price relative 8 12 16 20 24 2/118/112/128/12 AutoNavi HANG SENG INDEX (Rebased) Performance (%) 1m3m12m Absolute -11.4-6
7、.3-2.2 HANG SENG INDEX -4.33.46.4 AMAP delivered a strong 4Q12, with a top line of US$44m (+26% YoY/8% QoQ), beating the street by 11%, thanks to strong development in the mobile segment and a one-off unexpected order in the public sector. The impact of the loss of the BMW order to Navinfo started t
8、o kick in in 4Q, with the in-dash navigation segment booking a 2% decline YoY. Consequently, AMAP reported net income of US$9m (+23% YoY), well above consensus estimates of US$6m (+37%). Retain Buy on valuation. Bitter sweet transition from offline to online/mobile solution provider In-dash (49% of
9、4Q revs) reported a dip of 2% YoY, due mainly to the loss of BMW business for new models fully kicking in. The negative impact was offset by the outperformance of the mobile/LBS segment (36% of revs), which recorded a US$15.5m top line (+63% YoY), thanks to the rapid penetration of mobile pre-instal
10、lation on smartphones (revs collection) and internet-based API solutions provided to major internet players (incremental user base). Outlook: margin depression due to hefty investments in mobile/LBS We believe AMAPs in-dash segment should witness a sharp decline over the coming year, with a gradual
11、recovery expected in FY14, on 1) newly acquired accounts and 2) improving in-car connectivity and IOV application development. The LBS/mobile app segment should continue to be the key growth engine (#1 mkt share of 30%). However, given the increasingly competitive environment and entry of major inte
12、rnet players, hefty investment will be required for AMAP in brand building, channel acquisition and R maintaining Buy; risks Given the near-term weak earnings outlook for AMAP, we lower revs/NPAT by 5%/30% in FY13E and 4%/24% in FY14E. Thus we reduce our TP to US$13.4 (-18%) based on 0.7x PEG and 22
13、.9% EPADS CAGR FY13-15E and FY13 EPADS of US$0.86 (15.6x implied PE FY13E), while generating upside potential of 29%. Maintaining Buy. Key risks: losing major auto navigation platforms to competitors; Chinas macro slowdown affecting the automotive market. 1 March 2013 Software we estimate a volume d
14、ecline of 10%- 12% YoY and a 10% YoY revenue decline in the segment in FY13. 1 March 2013 Software Deutsche Bank However, we expect volume growth for the segment to remain robust with existing brands, such as Audi, GM and Benz, and also newly acquired brands, such as Citroen, Renault and Honda. Figu
15、re 4: China in dash-navigation market size Figure 5: China in-dash navigation market share 0 500 1000 1500 2000 2500 0% 2% 4% 6% 8% 10% 12% 200920102011E2012E2013E2014E China in-dash navigation system sales (RHS)China in-dash navigation system penetration % Units 59% 40% 1% AutoNaviNavinfoOther Sour
16、ce: Analysys International, Company data, Deutsche Bank Source: Analysys International, 2011, Company data, Deutsche Bank Separately, we expect AMAPs in-dash segment to witness pressure on ASP, given 1) an annual 10% concession on a royalty fee to existing customers, and 2) fast growth in mid-range
17、cars, which require lower ticket size navigation products, although we expect this to be compensated by improving volumes. As such, we expect AMAPs in- dash segment ASP to witness a continuous YoY decline but for this to be offset by higher committed shipment volumes with major existing auto brands.
18、 1 March 2013 Software Gartner 2012, Company data, Deutsche Bank Source: Analysys International, November 2012, Company data, Deutsche Bank Android is the most popular smartphone operating system in China, followed by Symbian and Apples IOS, according to a survey conducted by UpperPlus. We also note
19、 that Android users distribution is polarized, showing the highest concentration among low- to mid-income (average monthly income Rmb0-3999) teenagers and the young elite group (aged 26-34, with average monthly income Rmb10,000), with only the latter being potential high-end car owners. Similar to t
20、he strategy in the in-dash segment, AMAP mainly targets higher-end smartphone brands whose potential buyers are car owners for pre-installed apps, such as Samsung, Apple and HTC. 1 March 2013 Software Deutsche Bank, *“Other“ comprising of Windows Phone, Windows Mobile, Blackberry OS, Linux, MeeGo, B
21、rew, Maemo, Bada etc Figure 9: IOS user age and income distribution Figure 10: Android system is preferred by younger and medium-income demographics 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 010001000-19992000-3
22、9994000-5999 6000-79998000-999910000-1499915000-1999920000 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.55 0.60 0.65 0.70 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 019992000-39994000-5999 6000-79998000-999910000 Source: UpperPlus ;Deutsche Bank Source: UpperPlus; Deutsche Bank 1 M
23、arch 2013 Software to take toll on margins in 2013 We believe 2013 will be a critical year for AMAPs development, and expect challenges and opportunities to unfold in several aspects: ? We believe AMAPs traditional in-dash navigation systems should continue to witness contraction given the pressures
24、 on ASPs and volume decline resulting from the loss of BMW, which is one of its key accounts. We believe AMAPs traditional in-dash navigation systems should continue to witness contraction given the pressures on ASPs and volume decline resulting from the loss of BMW, which is one of its key accounts
25、. However, we believe AMAP should sustain its cash-cow in-dash business through value-added offerings by merging with mobile/online map/LBS applications. Thus, in the long run, we expect the company to post a recovery thanks to improving in-car 1 March 2013 Software from the previous 0.9x which was
26、derived based on a combination of earnings growth potential and a comparison with leading internet peers. Furthermore, we use Non-GAAP numbers in our valuation in order to reflect the full effect of core earnings. AMAP is currently trading at 12.1x FY13E P/E and 9.8x FY14E PE and generates upside po
27、tential of 29%. Thus we maintain our Buy rating. Figure 14: Three-year historical trading forward PE 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 Jul-10Jan-11Jul-11Jan-12Jul-12Jan-13 Average PEProspective PE x Avg: 16x Range:9x - 29x YE Dec FY09 FY10 FY12 Rev. growth (YoY) 50.0% 48.0% 25.8% EBIT margin 27.
28、2% 29.0% 24.4% NI growth (YoY) 84.1% 90.9% -0.1% ROE 8.9% 13.8% 12.7% Source: Deutsche Bank, Bloomberg Finance LP 1 March 2013 Software as a result, the recommendations may differ and the price targets and estimates of each may vary widely. In August 2009, Deutsche Bank instituted a new policy where
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