Aixtron's 2017 revenue was 191m excluding A/D/CVD. If the 2018 revenue is 260m, then the MOCVD growth rate would be 35%. The 191m includes the fire sale of R6 which is discontinued in 2018, so the actual growth rate of the current MOCVD businesses is actually higher than 35%.
The projected 2018 order intake is 260m of which 40m is for service and parts, so the projected equipment orders would be 220m. In the February CC Dr. Schulte said that the 2018 shippable equipment orders are only for the first six months. With the Q1 equipment orders = 68m and Q2 shippable equipment order = 50m, the H2 equipment order would be 102m which is flat. However, this in my opinion is a low bar conservative projection by Aixtron. Aixtron might have low visibility on orders for late 2018. That’s because the MOCVD market for major 2019 growth drivers from SiC and GaN power semiconductors and RF for EV, 5G, etc., is just not clear in early 2018. So the order in H2 could be much stronger because those new applications are new mega trends as opposed to just incremental. Furthermore, although VCSEL may be taking a pause due to the slowdown of Apple Iphone X sales which would explain Aixtron's lower Q2 equipment orders, VSCEL could pick up its growth in later 2018 and into 2019 as new APPLE phones/IPAD/Mac are introduced and Android phones coming in with 3D sensors. So, the currently low equipment orders projection can be viewed as a minimum mark and the actual orders might increase substantially later in the year.
The current P/E ratio is ~56. APEVA is adding 20m cost in 2018 and if we add this 20m into the EBIT to count MOCVD businesses only, then the current 2018 net income after tax (15%) would be 0.35/share and the P/E becomes 37. Taking into account the eur 2/share cash, the effective P/E is 31. That accounts for only the MOCVD business which is growing at a annual rate of at least 35% from 2017 to 2018. Considering the anticipated fast growing MOCVD businesses. the current valuation of P/E=31-37 is not too unreasonable. Even if it may be a little high, one needs to include premium for APEVA which is disruptive and could potentially double the share price in a heart beat.
So I stay long.
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