Bättre betalt per enhet, givetvis inte tillräckligt.. men.. men..
Imint Q4 2019: first comments
Redeye Research Note 2020/02/21
Imint reported sales of SEK 11.1m (9.2m) in Q4 2019, which was almost equal to our forecast of SEK 11.0m. Costs were slightly higher than expected, resulting in a net profit of SEK -1.8m(-1.9m) compared to our estimates of SEK -1.5m. A market decline during Q4 of 15.6% in Chinese smartphone shipments made the rather weak quarter expected. Considering we forecast that the smartphone market in China will decline further in Q1 due to the Corona-virus, we will come back with a revised valuation.
According to Imint, Vidhance is now found in about 215m phones sold since the launch in Q4’16, i.e., a quarterly increase of approximately 35m units in Q4 2019. The latter implies that the average compensation per sold phone in the quarter was around SEK 0.31, which is a slight improvement since Q3 2019 (0.28), and the highest compensation since Q4 2019 (0.31). A quarter ago, Imint expressed its intention to increase upsales on existing customers, and the higher compensation per phone sold implies it is on the right track.
The free cash flow amounted to SEK -0.9m, mainly affected by higher than expected “other external costs”. This is also what primarily affected the net profit downwards. We believe increased costs come from Imint´s increased marketing expenses, which will most likely persist in 2020.
IDC estimates that smartphone sales in China will decline by around 30 % in Q1 2020, which would severely affect Imint in the short term. Add to this a general slowdown in smartphone sales in China, and a lowering of our valuation becomes natural. We will come back with a revised update in the coming days. Lastly, Imint held cash of SEK 34.5m by the end of the period, and we see no risk for any additional capital raise.