DB:MHC

Stock Analysis Report

Executive Summary

MegaChips Corporation designs, develops, and manufactures MEMS timing devices and LSIs for use in analog, digital, and MEMS technology in Japan, Taiwan, and internationally.

Rewards

Trading at 19% below its fair value

Earnings are forecast to grow 96.94% per year

Risk Analysis

Debt is not well covered by operating cash flow

Highly volatile share price over past 3 months



Snowflake Analysis

Reasonable growth potential and slightly overvalued.


Similar Companies

Share Price & News

How has MegaChips's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MHC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0%

MHC

2.9%

DE Semiconductor

2.0%

DE Market


1 Year Return

-19.8%

MHC

15.4%

DE Semiconductor

15.1%

DE Market

Return vs Industry: MHC underperformed the German Semiconductor industry which returned 16.7% over the past year.

Return vs Market: MHC underperformed the German Market which returned 15% over the past year.


Shareholder returns

MHCIndustryMarket
7 Day0%2.9%2.0%
30 Day-3.3%3.1%1.0%
90 Day-26.6%13.5%3.8%
1 Year-18.9%-19.8%17.2%15.4%18.6%15.1%
3 Year-31.0%-33.2%35.9%32.6%16.8%6.6%
5 Year57.3%44.7%99.5%91.3%23.7%6.7%

Price Volatility Vs. Market

How volatile is MegaChips's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is MegaChips undervalued compared to its fair value and its price relative to the market?

20.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MHC (€15.2) is trading below our estimate of fair value (€18.77)

Significantly Below Fair Value: MHC is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: MHC is unprofitable, so we can't compare its PE Ratio to the Semiconductor industry average.

PE vs Market: MHC is unprofitable, so we can't compare its PE Ratio to the German market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate MHC's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: MHC is good value based on its PB Ratio (1.4x) compared to the DE Semiconductor industry average (2.4x).


Next Steps

Future Growth

How is MegaChips forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

96.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MHC is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (-0.4%).

Earnings vs Market: MHC is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: MHC's is expected to become profitable in the next 3 years.

Revenue vs Market: MHC's revenue (10.6% per year) is forecast to grow faster than the German market (5% per year).

High Growth Revenue: MHC's revenue (10.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MHC's Return on Equity is forecast to be low in 3 years time (4.2%).


Next Steps

Past Performance

How has MegaChips performed over the past 5 years?

-29.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MHC is currently unprofitable.

Growing Profit Margin: MHC is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: MHC is unprofitable, and losses have increased over the past 5 years at a rate of -29% per year.

Accelerating Growth: Unable to compare MHC's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: MHC is unprofitable, making it difficult to compare its past year earnings growth to the Semiconductor industry (-17.8%).


Return on Equity

High ROE: MHC has a negative Return on Equity (-11.23%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is MegaChips's financial position?


Financial Position Analysis

Short Term Liabilities: MHC's short term assets (¥57.9B) exceed its short term liabilities (¥37.9B).

Long Term Liabilities: MHC's short term assets (¥57.9B) exceed its long term liabilities (¥17.8B).


Debt to Equity History and Analysis

Debt Level: MHC's debt to equity ratio (143.6%) is considered high.

Reducing Debt: MHC's debt to equity ratio has increased from 106.4% to 143.6% over the past 5 years.


Balance Sheet

Inventory Level: MHC has a low level of unsold assets or inventory.

Debt Coverage by Assets: MHC's debt is covered by short term assets (assets are 1.3x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: MHC has been profitable on average in the past, therefore cash runway is not a concern.

Forecast Cash Runway: MHC has been profitable on average in the past, therefore cash runway is not a concern.


Next Steps

Dividend

What is MegaChips's current dividend yield, its reliability and sustainability?

0.97%

Current Dividend Yield


Upcoming Dividend Payment

Purchase MegaChips before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company1.0%marketbottom25%1.3%markettop25%3.6%industryaverage1.1%forecastin3Years1.4%

Current dividend yield vs market & industry

Notable Dividend: MHC's dividend (0.95%) isn’t notable compared to the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: MHC's dividend (0.95%) is low compared to the top 25% of dividend payers in the German market (3.59%).


Stability and Growth of Payments

Stable Dividend: MHC's dividend payments have been volatile in the past 10 years.

Growing Dividend: MHC's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: MHC is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.7yrs

Average board tenure


CEO

Tetsuo Hikawa 0

0.7yrs

Tenure

0

Mr. Tetsuo Hikawa serves as President & CEO of MegaChips Corp. since 2019. Mr. Tetsuo Hikawa served as the President of MegaChips System Solutions Inc., a subsidiary of Megachips Corp. Mr. Hikawa serves as ...


Board Members

NamePositionTenureCompensationOwnership
Tetsuo Hikawa
President0.7yrsno data0.44% ¥1.4m
Akira Takata
Senior MD & Director8.7yrsno data0.46% ¥1.5m
Yoshimasa Hayashi
Director0yrsno data0.60% ¥1.9m
Masahiro Shindo
Chairman1.1yrsno data2.57% ¥8.3m
Keiichi Kitano
Outside Auditor17.7yrsno data0.078% ¥251.8k
Koichi Akeyama
Director2.7yrsno datano data
Yasuto Shimomae
Director0yrsno data0.0092% ¥29.6k
Jiun-Hao Lai
Outside Director2.7yrsno datano data
Junko Nagata
Outside Director1.1yrsno datano data
Ikuo Yamaguchi
Director1.1yrsno data0.0046% ¥14.8k

2.7yrs

Average Tenure

59.5yo

Average Age

Experienced Board: MHC's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

MegaChips Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: MegaChips Corporation
  • Ticker: MHC
  • Exchange: DB
  • Founded: 1967
  • Industry: Semiconductors
  • Sector: Semiconductors
  • Market Cap: JP¥38.281b
  • Listing Market Cap: JP¥322.310m
  • Shares outstanding: 21.76m
  • Website: https://www.megachips.co.jp

Number of Employees


Location

  • MegaChips Corporation
  • Shin-Osaka Hankyu Building 1-1-1 Miyahara
  • Yodogawa-ku
  • Osaka
  • 532-0003
  • Japan

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MHCDB (Deutsche Boerse AG)YesCommon SharesDEEURAug 1998
6875TSE (The Tokyo Stock Exchange)YesCommon SharesJPJPYAug 1998
MEGP.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDAug 1998

Biography

MegaChips Corporation designs, develops, and manufactures MEMS timing devices and LSIs for use in analog, digital, and MEMS technology in Japan, Taiwan, and internationally. The company offers LSIs, such as custom memories for storing game software for use in game consoles; LSIs for game consoles and their peripherals; LSIs for digital cameras and other image processing; and LSIs for liquid crystal panels. It also provides LCD timing controllers for various input and output interfaces, such as HDTVs and smart devices; and communication integrated circuits, as well as ASIC solutions. The company is also involved in the contract manufacturing business. MegaChips Corporation was incorporated in 1967 and is headquartered in Osaka, Japan. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/18 20:37
End of Day Share Price2020/02/18 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.