2013 Annual Results Presentation
18 March, 2014
Agenda
Company Overview
Results and Analysis
Market Outlook
Q&A
1
Part 1. Company Overview
MOBI Technology
(Hong Kong)
MOBI Antenna
(Shenzhen)
MOBI Technology
(Xi’An)
100% 100%
100%
100%
MOBI Indonesia
(Indonesia)
MOBI New Material and
Technology
(Xi’An)
100%
95% 5%
RF subsystem R&D and production
Antenna R&D and production
Aesthetic antenna R&D and production
Shenzhen MOBI
Communication
(Shenzhen)
100%
Basic station production
Microwave antenna production
RF feeder R&D and production
International trade and funding
Die-casting and CNC processing
RF subsystem R&D and production
Antenna R&D
Terminal antenna R&D and production
Electroplating Communication system engineering
and technology service
Engineering and technology services for
Indonesia market
Package solutions for Indonesian market
Engineering services for neighboring
countries in Southeast Asia
3
Company Structure Overview
MOBI Communication
(Ji An)
4
Core System
Microwave
Transmission
Base Station Coverage
Extension
Mobile
Handset
Fixed-line Telephone Switching Center Microwave Transmission
Cable
RF Path
We are committed to provide front-end products for mobile communication.
Our business includes all series of products for base station equipment construction and related coverage
extension solutions.
We are extremely professional in base station RF technology and antenna R&D.
电缆
5
Company Business
Antenna System
Base Station Subsystem
Bias Tee
Tower Mounted Amplifier
Structure of Mobile
Communication Base Station
6
Company Business (Cont.)
Indoor/Outdoor Coverage Extension Solution Aesthetic Antenna
Part 2. Results and Analysis
8
0
200
400
600
800
1000
2012 2013
688
888
Revenue Increase
29.1% (RMB million)
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2012 2013
16.8% 21.8%
Gross Profit
21.8%
-40
-30
-20
-10
0
10
20
2012 2013
-39.5
19.1
Net Profit Turn Around
(RMB million)
19Million
0
20
40
60
2012 2013
19.8
55.4
Operating Cash Flow increase 180%
(RMB million)
55Million
Results Overview in 2013
9
North America: 1. Achieved steady growth;
2. Passed all tests for newly-
researched products.
Latin America: 1. Aesthetic antenna project in
Chile entered delivery phase;
2. Passed LTE Antenna tests
conducted by a Mexican
operator.
Europe: Strategic breakthrough 1. Broke into the short list of an major
European operator and would receive
an order in FDD construction;
2. Broke into a Russian operator’s short
list in early 2014 and got the purchase
order of TD-LTE construction.
Africa: 1. Unstable political situation caused
less demand in North Africa ;
2. South Africa showed great potential
in network construction; demand
recorded a stable growth.
China: Another round of
large-scale network
deployment, MOBI got
leading market share 1. CM’s TD-SCDMA6.2 realized
peak delivery;
2. MIIT officially issued 4G
licenses to top three
operators; CM and CT pushed
its LTE construction;
3. CM tendered its100,000 2G
base stations.
Asia & Pacific: 1. 3G and LTE network
construction in India;
2. Continued bulk sales in
Thailand for 3G construction;
3. Realized direct sale of RF
products to Japanese
customers; working on
breakthrough on operators’
short lists.
9
Sales Network of 2013
Sales of Major Customers in 2013 Customer
(RMB ’000) 2012 Percentage 2013 Percentage Change
ZTE 263,760 38.35% 456,165 51.36% 72.95%
China Mobile 140,559 20.44% 93,581 10.54% -33.42%
China Unicom 95,545 13.89% 35,399 3.99% -62.95%
China Telecom 7,571 1.10% 13,654 1.54% 80.35%
Nokia 41,359 6.01% 84,785 9.55% 105.00%
Alcatel – Lucent 66,635 9.69% 112,742 12.69% 69.19%
Japanese Market 22,869 3.33% 5,155 0.58% -77.46%
Thai Market 23,862 3.47% 67,600 7.61% 183.30%
Others 25,604 3.72% 19,145 2.16% -25.23%
Total 687,764 100% 888,226 100.00% 29.15%
10
In 2013, revenue from most of our customers recorded a substantial growth YoY.
Because of China Mobile’s turn-key purchase, the relevant revenue was accounted into equipment
manufactures. The latter one enjoyed a increased significant growth (especially ZTE).
Decreased CAPEX and devalued Yen caused revenue decline in China Unicom and Japanese market
respectively.
0
50
100
150
200
250
300
350
400
450
500
FY2012 FY2013
11
Sales of Strategic customers
2012 V.S. 2013 Strategic Customers Sales Structure in 2013
51.35%
16.10%
22.75%
9.80%
Chinese Equipment Manufactures
Chinese Network Operators
International Equipment Manufactures
Overseas Direct Sale
(RMB million)
Sales revenue recorded a significant increase because of China Mobile’s TD Phase 6.2 network construction and Chinese
operators’ LTE construction.
Revenue from Chinese operators recorded a decrease YOY because of turn-key purchase from China Mobile. The relevant
revenue was accounted into Chinese and international equipment manufactures.
Strong sales growth in Thailand was partly offset by drop in Japanese and other markets.
Sales Structure of Strategic Customers in 2013
Chinese
Equipment
Manufactures
Chinese
Network
Operators
International
Equipment
Manufactures
Overseas
Direct
Sale
12
Revenue by Year Revenue by Products in 2013
37.05%
55.97%
6.98%
Antenna System
Base Station RF subsystem
Coverage Extensive solution
(RMB million)
Benefiting from construction of China Mobile’s TD-SCDMA6.2 &TD-LTE network and China Telecom’s FDD LTE
network in 2013, total sales recorded a significant growth YOY.
Base station RF subsystem products recorded a higher growth rate than antenna products. It is because the
front ones are used in main equipments and have an earlier delivery than the latter ones.
For coverage extension solution, we focused on aesthetic antenna business and realized revenue growth in this
area. We believe MIMO aesthetic antennas will have great potential in LTE rollout.
0
100
200
300
400
500
600
FY09 FY10 FY11 FY12 FY13
Antenna System
Base Station RF subsystem
Coverage Extensive solution
Sales Structure of Products in 2013
New product with higher profit margin increased;
Chinese operators requested more on technology and product performance, thus price competition is less
intense;
With the increasing demand for high-end products and more sales to overseas customers, gross margin is
believed to be supported gradually in the future.
13
Gross Profit Margin & Net Profit Margin Outlook
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
FY08 FY09 FY10 FY11 FY12 FY13
Gross Profit Margin Net Profit Margin
Revenue is about to achieve accelerate growth:
China starts its LTE network construction;
Overseas LTE network construction is going to
begin;
Product sales will increase rapidly.
Portions of high margin products will keep on
growing:
Sales to international carriers;
Sales of LTE, MIMO and aesthetic antennas.
Profit Margin in 2013
14
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
FY2012 FY2013(RMB ’000)
R&D
Expense
Administrative
Express
Selling
Expense
Finance
Expense
Expenses in 2013
2013 Change Reason
R&D
Expense 43,316 -8.9%
R&D of new LTE product
has started in 2012
Administrative
Expense 89,063 17.1%
Increased labor cost,
raised in social security
ratio and exchange losses
by the appreciation of the
RMB
Selling
Expense 44,890 -6.2%
Enhanced cost control and
more sales to equipment
manufacturer customers.
Finance
Expense 286 -71.5%
Most of bank loans used
on the construction
projects, interest
capitalized
15
Leading MIMO
antenna technology
in China
June Passed China Mobile’s TD-SCDMA/TD-LTE
antenna and GSM/TD-SCDMA/TD-LTE
antenna tests.
Passed China Telecom’s TDD/FDD LTE
antenna tests.
Strategic Breakthrough in 2013 – Product Technology
September
16
Our client is the sixth largest multi-national network
operator among the world. MOBI has signed
procurement framework agreement with the
operator and become one of its three antenna
suppliers.
In 2012, the products trial went smooth and has bulk
sales delivered to its Pakistan subsidiary. In 2013,
there has been an on-construction trial for its
Malaysia subsidiary.
In 2012, MOBI became an antenna supplier for a well-
known network operator in India and provided
exclusive antennas for its GSM/UMTS network
construction in both Northern and Southern district.
In 1H2013, MOBI has also become its exclusive
antenna supplier for network expansion in its
Eastern district.
Development of the Strategic Customers in 2013
Nordic Client A Nordic Client B
India Client Thailand Client
In October 2012, Thailand started its auction on 3G
license.
MOBI then started to provide bulk supply in 3G
antennas to a Thailand operator.
The sales remained positive growth in 2013.
MOBI successfully breakthrough another major
European network operator since Nordic client A.
MOBI passed the network construction tests and
became one of its qualified antenna supplier in
November 2013.
MOBI would have cooperation on the project of
FDD LTE network construction with this operator.
Part 3. Market Outlook
18
Chinese 4G Market in 2014 ──
“The total domestic investment on 4G in 2014 will over 100 billion” (note)
— Miao Wei MIIT Minister
0
10
20
30
40
50
60
70
80
90
100
2013 2014
(RMB Billion)
Total investment on base stations (Estimated)
2013VS2014
Source: www.c114.net
Note: translated from Chinese, unit: RMB
19
0
100
200
300
400
500
600
The actual station
numbers and planned
projects in 2014
“Scheduled to build 500,000 4G base stations at the end of 2014.“ (note 1)
- Xi Guohua Chairman of China Mobile
(The total construction number of TD-LTE station within two years is equivalent to which
of TD-SCDMA station within six years. )
Significant
Increase
Note 2: 100,000 GSM base stations.
2013
LTE+TD-SCDMA
2014
LTE+TD-
SCDMA+GSM
about 500,000 to 600,000 Base Stations (note 2)
(Unit: ‘000)
Source: www.c114.net and estimated by the company
Note 1: translated from Chinese
0
10
20
30
40
50
2013LTE 2014LTE
China Telecom’s Investment
20 Source: www.c114.net
RMB Billion
Planned to invest RMB 45 billion in 4G project in 2014.
(Compared to 2013: Total investment in LTE is RMB10 billion,
building TD/FDD LTE hybrid network.)
21
The total tender of FDD-LTE construction:
50,000 * 9 = 450,000 stations
Our clients
LTE Supply Chain -
The key channels to LTE market are main equipment manufacturers
Market
Technology
innovation
Share
22
23
In the 4G era, our leading technology can help us to get leading market shares.
Operator's dilemma:
a serious shortage of Base station sites
Our strategy:
2G/3G/4G MIMO antenna technology
Current Status:
• Comparative advantage in 3G/4G
MIMO antennas
• Passed tests by operators
Operator's dilemma:
poor coverage and serious interference
Our strategy:
• Good performance products
• High technology reliability technology
Current Status:
• Full score in 2G antenna technology
assessments
• Ranking high in 4G antenna tests
LTE ── Our Technology Strategy
Leading TD-LTE antenna technologies in the nation
Bulk sales experience in overseas LTE network constructions
Top
5
Leading
Japan Brazil Mexico
24
Working closely with the main equipment manufactures
Advantages of MOBI ──
Carry network examination for
the largest operator in Africa.
TD-LTE network
construction will be started
in 2H2014 and GSM / UMTS
network expansion
in India.
Orders from Thailand
are as good as 1H,
which are mainly for 3G
network constructions.
Extend multinational operator customers in
Europe and achieve scale sales.
25
Overseas Market Outlook ──
MOBI’s
Customers
&
Product
Technology
RF subsystems and
TD-LTE antennas
Multi-band/multi-system antennas
3G and FDD LTE antennas
Aesthetic antennas
Expand multi-national operators and enter their supplier
short lists
Develop LTE and multi-band/multi-system technologies
Increase customers and upgrade technologies simultaneously
26
Our Three-Year Strategy ──
www.mobi-antenna.com
27
This report is drafted and audited by MOBI Development Co., Ltd.
("Company"). The information contained in this report shall only be
disclosed under the permission of relevant laws, regulations and rules
and for the sole purpose of providing information and shall not
constitute any advertisement. The material, comment and forecast (if any)
contained in this report merely reflects Company's situation or opinion
at the date of initial disclosure of this report. Company may revise the
information contained in this report and suggest investors to
independently pay attention to related updates or amendments.
This report may contain some forward-looking statements. Such
statements are the description, analyzing or prospect of Company
employees with respect to Company or relating industries. Company
makes no promise or guaranty that the contents of such statements will
be consistent with Company or relating industries' future performance.
28
Disclaimer