Himax Technologies, Inc. (NASDAQ: HIMX), is a fabless semiconductor company that provides display imaging processing technologies worldwide. The company operates in two segments, Driver IC and Non-Driver Products. It offers display driver integrated circuits (ICs) and timing controllers used in televisions (TVs), laptops, monitors, mobile phones, tablets, digital cameras, car navigation, and other consumer electronics devices.
On November 8th, the company reported its Q3 financial data and offered guidance for Q4 2018.
Himax shares bounced significantly on January 9, 2019, without any press releases to indicate why. Himax is scheduled to release its earnings report sometime in the next month. The company beat the analyst’s consensus on revenue and earnings in Q3 and issued guidance for Q4 in November. Investors may be anticipating that Himax will again beat the guidance, and the analyst’s expectations for Q4.
The company just attend the Nomura@CES conference on January 7th – January 8th, 2019 at the Bellagio Hotel, Las Vegas. The company management hosted one-on-one meetings with interested investors during the conference dates.
Recent Events
November 30, 2018. Himax Chairman, Dr. Biing-Seng Wu announced he intends to use his personal funds to purchase up to approximately $5 million of the Company’s American Depositary Shares in the open market, subject to market conditions and other factors. As of September 30, 2018, Dr. Biing-Seng Wu beneficially owns approximately 20.7% of the total outstanding shares of the Company. https://www.otcmarkets.com/stock/HIMX/news/story?e&id=1234923
November 08, 2018. Himax announced its financial results for the third quarter ended September 30, 2018. The Company’s third quarter 2018 revenues, gross margin and EPS all exceeded guidance as it previously announced on October 5th. The revenues increase in the quarter was attributed to greater-than-expected production outputs of the new foundries for both large display driver ICs and TDDI chips that allowed Himax to fulfill more customer orders. https://finance.yahoo.com/news/himax-technologies-inc-reports-third-110000615.html
October 24, 2018. – Himax and Kneron, a leading company in edge artificial intelligence (AI) solutions, today jointly announced a collaboration to accelerate the development and commercialization of a high precision and high-performance 3D sensing and AI-enabled security and surveillance solution. https://www.himax.com.tw/wp-content/uploads/2018/10/Himax-Kneron-Joint-Annt.pdf
Products
Display Drivers – TVs, laptops, monitors, mobile phones, tablets, digital cameras, car navigation, and many other consumer electronics devices.
Touch Panel Controller – HiTouch products for electronic devices employing touch panel screens of up to 13”, such as smartphones, mobile Internet devices and tablet PCs.
CMOS Image Sensor – Broad array of small pixel image sensors for different camera applications including mobile devices, notebook PC, automotive and surveillance.
Wafer Level Optics – Optical products manufactured using semiconductor process on wafers for camera lens in portable electronics.
Video and Display Technology Solutions – TFT-LCD television and monitor semiconductor solutions including 4K & 3D.
Other Display Related Semiconductor Solutions – Timing Controller, Operational Amplifier & IC are discrete semiconductors in large-sized TFT-LCD panels.
About
Himax Technologies, Inc., a fabless semiconductor company, provides display imaging processing technologies worldwide. The company operates in two segments, Driver IC and Non-Driver Products. It offers display driver integrated circuits (ICs) and timing controllers used in televisions (TVs), laptops, monitors, mobile phones, tablets, digital cameras, car navigation, and other consumer electronics devices. The company also designs and provides controllers for touch sensor displays; in-cell touch and display driver integration single-chip solutions; LED driver and power management ICs; scaler products for monitors and projectors; tailor-made video processing IC solutions; silicon IPs; and liquid crystal on silicon micro-displays for augmented reality (AR) devices and head-up displays for automotive industry. In addition, it offers digital camera solutions, including complementary metal oxide semiconductor image sensors and wafer level optics for AR devices, 3D sensing, and machine vision, which are used in various applications, such as mobile phone, tablet, laptop, TV, PC camera, automobile, security, medical devices, and Internet on Things. The company markets its display drivers and display-related products to panel manufacturers, agents or distributors, module manufacturers, and assembly houses; and non-driver products to camera module manufacturers, optical engine manufacturers, and television system manufacturers. Himax Technologies, Inc. has a collaboration with Kneron to develop and commercialize a 3D sensing and AI-enabled security and surveillance solution. The company was founded in 2001 and is headquartered in Tainan City, Taiwan.
Analysts
9 Wall Street analysts have issued ratings and price targets for Himax Technologies in the last 12 months. Their average twelve-month price target is $7.75, suggesting that the stock has a possible upside of 73.38%. The high price target for HIMX is $12.00 and the low-price target for HIMX is $6.00. There are currently 6 hold ratings and 3 buy ratings for the stock, resulting in a consensus rating of “Hold.”
Date Brokerage Action Rating Price Target
11/9/2018 Credit Suisse Group Reiterated Neutral $7.00
11/8/2018 Robert W. Baird Set Target Outperform $10.00 ➝ $7.00
10/1/2018 Roth Capital Upgrade Neutral ➝ Buy $7.00
9/25/2018 Lake Street Capital Set Target Buy $8.00
8/16/2018 Macquarie Downgrade Neutral $12.00 ➝ $6.00
8/9/2018 Cowen Set Target Hold $7.00
3/9/2018 Nomura Downgrade Hold $10.00 ➝ $8.00
3/9/2018 Northland Securities Downgrade Outperform ➝ Market Perform
Source: marketbeat.com
Financial review
Q3 2018
Q3 revenue increased 3.9% QoQ to $188.4M, exceeding guidance of around flat from the last quarter
Product sales: large driver ICs, 35.2% of revenue, up 9.4% QoQ; small and medium-sized driver ICs, 45.1% of revenue, down 4.8% QoQ; non-driver products, 19.7% of revenue, up 18.0% QoQ
Q3 IFRS gross margin was 23.4%, up 40 bps sequentially due to improved product mix and exceeding guidance of around 22.5%
Q3 IFRS earnings was $0.9M, or 0.5 cents per diluted ADS, higher than guidance of around -1.0 cent
Q3 Non-IFRS earnings was $4.5M, or 2.6 cents per diluted ADS, higher than guidance of around 1.5 cents
Q4 2018 Guidance
Revenue to be around Flat to up 5.0% Sequentially, Gross Margin to be around 24.2% to 25.2%, IFRS EPS to be around 1.5 to 3.6 Cents.
Expect 4Q18 TDDI revenue to double from 3Q18 due to ramping of new capacity to fulfill more customer orders from design-wins
Expect 4Q18 WLO shipment to increase significantly sequentially, the overall 2018 shipment will increase considerably year-over-year
3D sensing adoption remains low for the Android smartphone makers due to the prevailing high hardware cost, long development lead time required for integration and the lack of killer applications which is limited to phone unlock and online payment
Reacting to Android smartphone makers’ lukewarm response, the Company is working on the next generation 3D sensing with an aim to leapfrog the market by providing high performance, easy to adopt and yet cost friendly total solutions, targeting most of the Android smartphone players
Company remains positive on its long-term business outlook
Stock influences and risk factors
They derive the majority of net revenues from sales to the TFT-LCD panel industry, which is highly cyclical and subject to price fluctuations. Such cyclicality and price fluctuations could negatively impact the business or results of operations.
The concentration of accounts receivable and the extension of payment terms for certain customers exposes HIMX to increased credit risk and could harm operating results and cash flows.
Technological innovation may reduce the number of display drivers typically required for each panel, thereby reducing the number of display drivers they are able to sell per panel.
Stock chart
On Wednesday, January 9th, 2019, HIMX shares were at $.404 (+ 17.78%) on traded volume of 4.6 million shares. The current RSI (14) is 59.56 and the HIMX market cap is $597 million.
At $4.04, HIMX shares are trading below their 50DMA and 200 DMA of $4.07 and $6.15 respectively.
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