On Monday, Maxscend Microelectronics Co (300782:CH) experienced a shift in its stock outlook as Jefferies changed its rating from Buy to Hold. The new stock price target for the company is set at RMB102.79, a decrease from the previous RMB141.42. This adjustment follows reports that Samsung (KS:005930), a significant client constituting over 20% of Maxscend's revenue, is realigning its smartphone component orders from Chinese suppliers to those in Taiwan.
The decision by Samsung is believed to be influenced by geopolitical factors. As a result, Jefferies has revised its revenue expectations for Maxscend for the years 2024 to 2026, forecasting a reduction between 7% and 15%. Despite the downgraded, Jefferies maintains a long-term positive outlook on Maxscend, citing its fab-lite approach and proficiency in manufacturing all components of the RF module as key strengths.
The revised stock price target of RMB102.79 is based on a price-to-earnings growth (PEG) ratio of 1.1 times. This valuation reflects Jefferies' recalibrated projections following the anticipated changes in Maxscend's business dynamics due to the shift in Samsung's sourcing strategy.
Maxscend's position in the market will be closely watched as the company adapts to these new challenges. With the current rating adjustment, investors may recalibrate their expectations for the company's performance in the near to mid-term.
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