Plover Bay Technologies Ltd. · HKEX:1523
Plover Bay Technologies — FY2020 Earnings Presentation
20 slides from Plover Bay Technologies's earnings presentation, February 2021
Slide 1: Plover Bay Technologies Limited FY2020 Annual Results
Plover Bay Technologies Limited (1523 HK) FY2020 Annual Results February 2021
Slide 2: Dedicated to Enabling Unbreakable Connectivity
DEDICATED TO ENABLING UNBREAKABLE CONNECTIVITY Enterprise-friendly Networking SpeedFusion Technology ● Broad range of wired and 5G Ready SD-WAN routers ● Combines multiple connections from any source to create ● High reliability to price an optimized, secure and unbreakable connectivity ● Well-suite
Slide 3: 2016-2020: Results of Solid Execution Capability
2016-2020: RESULTS OF SOLID EXECUTION CAPABILITY 52.8 2016 - 2020 ● Growth driven by expanding line-up of wired and Revenue CAGR: wireless SD-WAN routers 17% Revenue ● Growing base of installed base feed into expanding recurring revenue pipeline 28.4 (M USD) 2016 2020 25% 18% Recurring ● Fast growin
Slide 4: 2016-2020: Results of Solid Execution Capability
2016-2020: RESULTS OF SOLID EXECUTION CAPABILITY 27% 19% Net profit ● Persistent process automation and internal systems margin: improvements, resulting in unrivalled net profit 27% margin among industry peers ● Successfully expanded R&D team out of HK, Net profit widening talent pool at lower cost ma
Slide 5: Steady Growth Through Turbulent Times
STEADY GROWTH THROUGH TURBULENT TIMES Annual Revenue HK$0.50 HK$0.41 Net profit Total 2016 IPO Dividend Dividend Share declared distribution price Since IPO Mid-late 2017: Early 2018: 2019: Early 2020: COVID-19 Since late 2020: Robust dividend returns 2017: Rising trade Global memory Start of China-U
Slide 6: Secular Trends Driving Wireless Connectivity
SECULAR TRENDS DRIVING WIRELESS CONNECTIVITY 5.9 More connected devices 28% CAGR ● 5G adoption gaining traction in 2021 ● New applications enabled by 5G’s lower latency Billions of new 1.7 cellular IoT ● 5G capability supports many more devices in the connections network vs 4G Source: Ericsson 2020
Slide 7: Expanding Addressable Market
EXPANDING ADDRESSABLE MARKET Expanding product range Total addressable market Underlying secular trends 2020: 2025 ● Enterprise WAN & WLAN ● Industrial Gateway Secular trends driving market 2020 expansion ● More connected devices 2021-2025: ● Enterprise WAN & WLAN with 5G ● Higher data consumption a
Slide 8: 2021+: Moving from SD-WAN to Smart Connectivity
2021+: MOVING FROM SD-WAN TO SMART CONNECTIVITY SpeedFusion Technology Wireless SD-WAN Routers 5G SD-WAN Routers SpeedFusion Cloud All in one: Device, Cloud, Data 2006 - 2020: 2021+: Laying a solid foundation for future growth Moving towards “Smart Connectivity”
Slide 9: What Is Smart Connectivity
WHAT IS SMART CONNECTIVITY Introducing.. SpeedFusionConnect ● Always connected ○ Bring your own SIM ○ We’ve got your back with instant data, around the world ● Predictable Pricing Never Throttled ○ Pay for what you use, not some large bucket ○ Don’t fall into the “unlimited” trap ● The power of Spee
Slide 10: Integrated Solution for All Connectivity Needs
INTEGRATED SOLUTION FOR ALL CONNECTIVITY NEEDS Unbreakable connectivity using: Commodity bandwidth (4G/5G/fixed lines) Network branches anywhere OR Cloud SpeedFusionConnect On-demand bandwidth Internet 5G/LTE SD-WAN Router SpeedFusionConnect Global point of presences Device warranty Smart Connectivit
Slide 11: Financial Highlights
FINANCIAL HIGHLIGHTS 2020 2019 Financial year ended 31 December Change (US$’000) (US$’000) Revenue 52,818 45,910 +15.0% Gross profit 30,800 28,774 +7.0% Operating expense, Other income & Finance cost (14,758) (14,780) -0.1% Profit before tax 16,042 13,994 +14.6% Reported net profit 14,230 12,089 +17
Slide 12: Revenue Breakdown
REVENUE BREAKDOWN +15.0% YoY Product breakdown ● Strong sales in volume-based SD-WAN routers, which is in line with strategy to accelerate user base growth ● Software licences, which includes add-on software licences and recurring cloud subscriptions, grew 38% YoY driven by growth of registered devi
Slide 13: Revenue Breakdown (con't)
REVENUE BREAKDOWN (con’t) Geographical breakdown Nature of sales breakdown ● EMEA grew 34% YoY, Asia Pacific grew 18% while North America market grew 7%. ● One-time sales (includes sales of routers and add-on software features) grew 16% ● Recurring sales (includes warranty and software subscriptions
Slide 14: Gross Margin Breakdown
GROSS MARGIN BREAKDOWN ● Gross margin decreased to 58.3% (2019: 62.7%), impacted by: ○ Strategy to accelerate user growth leading to strong sales of basic SD-WAN routers, typically with lower gross margin compared to company average ○ Inventory write-down of US$693,000 mainly for components over 3 y
Slide 15: Operating Expenses Analysis
OPERATING EXPENSES ANALYSIS Year ended 31 December 2020 2020 2019 2020 2019 US$’000 US$’000 % of sales % of sales Selling & distribution expenses 2,475 2,411 4.7% 5.3% Admin expenses 5,535 5,537 10.5% 12.1% R&D expenses 7,425 7,221 14.1% 15.7% Total operating expenses 15,435 15,169 29.3% 33.0% Staff
Slide 16: Net Profit and Dividend
NET PROFIT AND DIVIDEND Year ended 31 December 2020 2020 2019 Change US$’000 US$’000 % Net profit: Profit before tax 16,042 13,994 +14.6% 2H Income tax expense (1,812) (1,905) -4.8% Net profit 14,230 12,089 +17.7% 1H Earnings per share (US cents) Basic EPS 1.34 1.17 +14.5% Diluted EPS 1.33 1.14 +16.
Slide 17: Balance Sheet and Cash Flow Highlights
BALANCE SHEET AND CASH FLOW HIGHLIGHTS BALANCE SHEET SUMMARY CASH FLOW STATEMENT SUMMARY At the end of 31 December 2020 2019 Year ended 31 December 2020 2019 US$’000 US$’000 US$’000 US$’000 Trade and other receivables 6,997 8,245 Cash flows from operating activities 15,838 15,951 Inventory 12,509 7,
Slide 18: Industry Peers Valuation
INDUSTRY PEERS VALUATION Market Cap Price 5 yr Sales 5 yr EPS Company Ticker Business segment (USD) (USD) growth growth P/S P/E Plover Bay 1523 HK Enterprise / Industrial 174M 0.160 19.3% 24.3% 3.1 12.2 Sierra Wireless SWIR Industrial / Enterprise 626M 17.37 5.4% -29.5% 1.3 N/A DIGI Int’l DGII Indus
Slide 19: Recent M&A Valuations
RECENT M&A VALUATIONS Enterprise value Target company Announced date Business segment Acquirer Revenue (USD) Implied EV / sales (USD) Cradlepoint Sep 2020 Enterprise SD-WAN Ericsson 1.1B 137M (2019) 8.0x Silver Peak Jul 2020 Enterprise SD-WAN HP Enterprise 925M Over 100M ~9x Networks CloudGenix Mar
Slide 20: 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
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