Plover Bay Technologies Ltd. · HKEX:1523
Plover Bay Technologies — 1H21 Earnings Presentation
33 slides from Plover Bay Technologies's earnings presentation, December 2021
Slide 1: Plover Bay Technologies Limited (SEHK: 1523)
Plover Bay Technologies Limited (SEHK: 1523) December 2021
Slide 2: Introduction
INTRODUCTION
Slide 3: We Make Connectivity Reliable
WE MAKE CONNECTIVITY RELIABLE Founded in 2006 Peplink for Enterprise 200+ Employees & Consultants IPO in 2016 (1523.HK) Pepwave for Prosumer 110+ Dedicated Engineers Sales1 in Over 100 Wired & Wireless 260+ Countries Connectivity Solutions Patents Granted 1. For 1H21, sales revenue from over 100 cou
Slide 4: Core Technologies for Unbreakable Connectivity
CORE TECHNOLOGIES FOR UNBREAKABLE CONNECTIVITY SpeedFusion Enables reliable streaming Combining multiple WAN into a Instant session failover & single connectivity Unbreakable wireless connectivity Over 90 nodes around the world SpeedFusion Cloud Achieve SpeedFusion with a few clicks SpeedFusion simp
Slide 5: 5G Ready Product Portfolio
5G READY PRODUCT PORTFOLIO Small to Large Enterprise 5G Enterprise SD-WAN 5G Mobile SD-WAN 5
Slide 6: Enabling Reliable Connectivity in Workplaces...
ENABLING RELIABLE CONNECTIVITY IN WORKPLACES... 5G Enterprise SD-WAN Work & Edu Business Enterprise from Anywhere Branch & Cloud Fiber Failover Managed Service IoT & Kiosks Mobility Providers (MSP) 6
Slide 7: ... and in Everything and Everywhere
... AND IN EVERYTHING AND EVERYWHERE 5G Mobile SD-WAN Autonomous Systems Public Safety Maritime & Teleoperation Specialized Vehicles Rapid & Aircrafts Deployment 7
Slide 8: A Fast Growing Player with Track Record
A FAST GROWING PLAYER WITH TRACK RECORD Expanding Global 5-year EPS Highly Efficient Reach CAGR 24%1 Operations 5-year Revenue CAGR1 Diluted EPS OPEX2 / Revenue ● North America: 26% increased from (2015-2020) ● EMEA: 15% 0.45 to 1.33 (US cents) 35% 29% ● APAC: 11% 1. CAGR uses figures from 2015 to 2020
Slide 9: Delivering Value Through Uncertain Times
DELIVERING VALUE THROUGH UNCERTAIN TIMES Revenue 2 7.7x Stock Return1 since IPO $3.85 Net Profit 2 Dividend per 2H Share Declared 2 1H Mid-late 2017 2018 - 2019 Early 2020 Mid 2020 Since late 2020 Global memory Increasing global Covid-19 Travel restrictions, Semiconductor shortage; global chip shorta
Slide 10: Why Now? Unprecedented Growth in 1H21
WHY NOW? UNPRECEDENTED GROWTH IN 1H21 With the increasing global demand of reliable connectivity and 5G trend, we have experienced an unprecedented growth in 1H21. 6 .5% GR1 CACAGR 4-year 4-year CAGR 4-year CAGR 17% 28% 1H21: 33% 1H21: +82% YoY 1H21: +36% YoY +76% YoY 10
Slide 11: Need for Connectivity Is Always Expanding
NEED FOR CONNECTIVITY IS ALWAYS EXPANDING Expanding Product Range Expanding Addressable Market 1 Increasing Need for Connectivity Now: Shorter term: $30B+ ● 100+ major product series ● Post COVID “New normal” ● Software for reliable ● 5G upgrade cycle connectivity ● 3G sunset starting from 2022 $8B
Slide 12: Well-Positioned for the Tailwinds
WELL-POSITIONED FOR THE TAILWINDS Tailwinds “New Normal” New Applications Higher Traffic at Lower Cost ● Connectivity needed anywhere ● New possibilities will require ● Mobile data traffic expanding at 29% ● New mobile IoT connections will real-time connectivity: robotics, CAGR2 grow at 19% CAGR1 autono
Slide 13: Our Approach
OUR APPROACH
Slide 14: Reliable Connectivity at Great Value
RELIABLE CONNECTIVITY AT GREAT VALUE Key Competitors Our Competitive Advantage ● Natively integrated wireless capability Established networking / network ● Strong pricing advantage given our operational efficiency Enterprise security players SD-WAN ● Flexible licensing options, no lock-in ● Wide ran
Slide 15: Go-to-Market Approach Built on Efficiency
GO-TO-MARKET APPROACH BUILT ON EFFICIENCY Distributor/ Reseller Channel Advantages ● Owners and entrepreneurs as our “sales extension” ● Minimal Relationship/ Sales cost ● Motivated by our fast growth and attractive discount ● Highly scalable operations ● First line of customer support ● High effici
Slide 16: Growing Online Presence
GROWING ONLINE PRESENCE Peplink e-store ● Self-service ordering for channel partners ● Automated backend, minimizes staff intervention Peplink on Amazon ● Massively expands our market reach ● Marketing opportunity ● Very high growth 16
Slide 17: Lean Culture Gets Things Done
LEAN CULTURE GETS THINGS DONE Highly Efficient Operations EBIT margin: 29.1% ● Minimal layers; small teams across the globe R&D: 14.1% of sales ● Strong culture of “Getting Things Done” ● Constantly find ways to automate processes Admin: 10.5% Selling & Distribution: 4.7% Community-driven Feedback Lo
Slide 18: Pipeline & Vision
PIPELINE & VISION
Slide 19: Our Connectivity Ecosystem
OUR CONNECTIVITY ECOSYSTEM Managed by InControl2 Network controller Support multiple connections WiFi access point SpeedFusion link Private-hosted Physical or Virtual appliance Network switch Branch edge SpeedFusion link Peplink-hosted SpeedFusion Cloud > 25 locations globally 5G / LTE antenna Local
Slide 20: 5G Roadmap
5G ROADMAP Coming soon Oct 2021 Jan 2022 Q1 2022 Balance MAX Modular upgrade MBX Mini Transit Core Dome Pro w/mmWave ● B310 ● Transit 5G ● MAX Adapter ● B310 Fiber ● MBX ● FlexModule ● B310X ● BR1 Pro 5G ● FlexModule Mini 20
Slide 21: Positioned to Take Off
POSITIONED TO TAKE OFF Enhancing Peplink Connectivity Ecosystem ● From SD-WAN to one-stop Connectivity Ecosystem ● 5G replacement cycle & growing wireless demand ● New product lines for new markets 2006 Past Improvements 2021 ● New partnerships ● Increased focus on high volume opportunities ● U.S an
Slide 22: Financial
FINANCIAL
Slide 23: Financial Summary
FINANCIAL SUMMARY Financial period YoY 2016 2017 2018 2019 2020 1H20 1H21 (US $'000) Growth Revenue 28,358 37,132 41,806 45,910 52,818 24,102 32,751 36% Year-over-year growth n/a 31% 13% 10% 15% n/a 36% n/a Gross profit 17,945 22,975 26,189 28,774 30,800 14,136 19,645 39% Operating expense, Other inc
Slide 24: Revenue by Segment
REVENUE BY SEGMENT Segment 1H21 growth Growth driver (YoY) Wired SD-WAN +53% ● Increased focus on low-mid range products with high volume opportunities Wireless SD-WAN +41% ● New warehouses in U.S and Lithuania; faster lead time in supply chain ● Wired SD-WAN products with embedded wireless capabili
Slide 25: Geographical Breakdown
GEOGRAPHICAL BREAKDOWN Region 1H21 growth Growth driver (YoY) North America (mainly U.S) +33% Broad based growth across all customers, WFH, strong interest in mobile enterprise and 5G EMEA +50% New VAD ramping up quickly in region, particularly strong in maritime Asia Pacific +20% High growth SMEs bu
Slide 26: Recurring vs Non-Recurring Revenue
RECURRING VS NON-RECURRING REVENUE Drivers to improve subscription rates: ● Growing user base of our products ● Growing variety of services, such as SpeedFusion Cloud and SIM management tool ● Including more features in CarePlan subscriptions ● Rolled out auto renewal and promotion campaigns Segment
Slide 27: Lean Operating Structure
LEAN OPERATING STRUCTURE Segment gross margin Net margin vs. Opex/Sales ratio ● Overall gross margin remains well within 58-63% range ● OPEX mainly consists of salary, R&D spend and office rents ● Over the years, changes are attributed to product mix ● We have had significant operating leverage in th
Slide 28: Balance Sheet & Cash Flow Summary
BALANCE SHEET & CASH FLOW SUMMARY Balance Sheet Summary (US$"000) 2016 2017 2018 2019 2020 1H21 Trade and other receivables 3,947 7,763 4,922 6,223 6,997 8,880 49% Inventories 6,678 11,629 8,372 7,387 12,509 15,636 Trade and other payables 1,884 2,630 2,274 2,614 4,452 4,855 Contract liabilities 4,4
Slide 29: Working Capital Summary
WORKING CAPITAL SUMMARY Working Capital summary 2018 2019 2020 1H21 (US$"000) ● Inventory days Inventory 8,372 7,387 12,509 15,824 ○ For 1H21, 197 days (2020: 165 days) Raw materials and consumables 6,033 5,006 7,939 10,340 ○ Global shortage of semiconductor components lead to the need for higher le
Slide 30: Outperforming Peers Over the Past 5 Years
OUTFORMING PEERS OVER THE PAST 5 YEARS Most recent Market Cap Stock Price Revenue 5-yr quarter / EPS 5-yr P/E Company Ticker Business segment P/S (USD) 1 (USD) 1 CAGR interim revenue 2 CAGR 2 (Trailing) growth (YoY) HKD 3.8B / HKD 3.47 / Plover Bay 1523 HK Enterprise / Industrial 19.3% 35.9% 24.4% 7
Slide 31: Major M&A in the Industry
MAJOR M&A IN THE INDUSTRY Enterprise value Target company Announced date Business segment Acquirer Revenue (USD) Implied EV / sales (USD) Cradlepoint Sep 2020 Wireless SD-WAN Ericsson 1.1B 137M (2019) 8.0x Silver Peak Networks Jul 2020 Enterprise SD-WAN HP Enterprise 925M Over 100M < 9.3x CloudGenix
Slide 32: Excellent Return Since IPO
EXCELLENT RETURN SINCE IPO 1 sinc e IPO turn k Re Stoc 7.7x 1. Stock return is calculated based on the closing share price as at 15 November 2021. 32
Slide 33: Disclaimer
DISCLAIMER Plover Bay Technologies Limited is incorporated in the Cayman Islands with limited liability. The information contained in this presentation is intended solely for your personal reference. Such information is subject to change without notice, its accuracy is not guaranteed and it may not