Crosby Research: Cowell (1415 HK/NEUTRAL): Weak demand from Apple may outweigh the effect of product upgrade
2H19 revenue increased by 23.8% YoY to US$349m due to 1) increase in iPhone shipment in 4Q19; 2) increase in ASP on iPhone’s front cam module upgrade from 7MP to 12MP. 2H19 GPM improved significantly by 4.2ppt YoY to 16.3% on improving production yield of new 12MP CCM. The company cut the production of optical component business and stopped the production of consumer electric products. Cowell recorded US$28.5m net profit in 2H19, which was up by 73.9% YoY. A final DPS of HK$0.243 and a special DPS of HK$$0.224 were proposed, together representing a payout ratio of 170%, compare with 86% in FY18.