Complete Genomics (GNOM)
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RDA Microelectronics (RDA), $71mm IPO
with a market cap of $404 at price range mid-point of $9.5
Scheduled for Wednesday, Nov 10 |
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SUMMARY |
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RDA looks like a good speculation at the $9.5 price range mid-point |
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. Business is characterized by volume increases & price declines driven by competition.
. Annualizing September quarter results shows a P/E ration of 13, low for a fast-growing company. The low gross margin of 30%, however, suggests the value add isn’t especially unique & may not be defensible over the longer term.
. The following all have higher gross margins. |
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COMPARE & CONTRAST |
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Valuation Ratios |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
Gross |
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annualizing Sept 3 mos |
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
Margin % |
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RDA Microelectrns RDA |
$404 |
1.8 |
13 |
3.9 |
3.9 |
30% |
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Inphi (IPHI) |
$312 |
3.8 |
27 |
2.6 |
2.7 |
64% |
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MaxLinear (MXL) |
$331 |
4.5 |
61 |
3.2 |
3.2 |
70% |
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Texas Instruments (TXN) |
$35,870 |
2.4 |
10 |
3.6 |
4.1 |
55% |
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Broadcom (BRCM) |
$21,690 |
3.0 |
17 |
4.4 |
6.5 |
52% |
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STMicroelectronics (STM) |
$8,070 |
0.8 |
10 |
1.1 |
3.9 |
38% |
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BUSINESS |
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Fabless semiconductor company that designs, develops and markets radio-frequency and mixed-signal semiconductors for a broad range of cellular, broadcast, and connectivity applications. |
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COMPETITION |
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Competes with MediaTek in a number of products related to mobile handsets in China as well as with multinationals such as Broadcom, Infineon, and STMicroelectronics that offer a broad line-up of stand-alone and integrated semiconductor solutions. |
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In addition, there are companies that RDA competes with in one particular product or product family, such as RF Micro Devices and Skyworks in power amplifiers; NXP and Silicon Laboratories in FM radio receivers; Maxim and Zarlink in DVB-S tuners; Maxim, MaxLinear and NXP in DVB-T tuners; Telegent in analog mobile television receivers; and CSR plc in Bluetooth solutions. |
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USE OF PROCEEDS
$62mm |
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For working capital and other general corporate purposes, including to finance growth, develop new products, and fund capital expenditures. |
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RDA Microelectronics |
RDA, C+, 7 |
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Post-IPO ADS equivalents: 42.5mm |
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Fabless semiconductor |
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Shanghai, China |
2007 |
2008 |
2009 |
June6mos09 |
June6mos10 |
IPO Mkt |
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Revenues |
$14 |
$56 |
$118 |
$46 |
$76 |
Cap (mm) |
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Gross profit |
35% |
32% |
26% |
26% |
28% |
$404 |
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Net income ($,mm) |
-$4.5 |
$0.7 |
$11.3 |
$3.0 |
$8.4 |
@$9.5 |
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Net income % of revenue |
-32% |
1% |
10% |
7% |
11% |
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Sept3os09 |
Sept3os10 |
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Revenues |
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$40 |
$57 |
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Gross profit |
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31% |
30% |
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Net income ($,mm) |
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$7.3 |
$7.9 |
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Net income % of revenue |
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18% |
14% |
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Valuation Ratios |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
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annualizing Sept 3 mos |
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
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RDA Microelectrns RDA |
$404 |
1.8 |
13 |
3.9 |
3.9 |
18% |
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SCORECARD |
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Mgt |
Market |
Market Do- |
Proprie- |
Total |
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1-5, 5 is high |
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Growth |
mination |
tary |
rating |
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20 is perfect |
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2 |
2 |
2 |
1 |
7 |
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COMPARE & CONTRAST |
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Valuation Ratios |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
Gross |
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annualizing Sept 3 mos |
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
Margin % |
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RDA Microelectrns RDA |
$404 |
1.8 |
13 |
3.9 |
3.9 |
30% |
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MaxLinear (MXL) |
$331 |
4.5 |
61 |
3.2 |
3.2 |
70% |
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Broadcom (BRCM) |
$21,690 |
3.0 |
17 |
4.4 |
6.5 |
52% |
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STMicroelectronics (STM) |
$8,070 |
0.8 |
10 |
1.1 |
3.9 |
38% |
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