RESULTS

February 28, 2023

HANA Microelectronics
HANA TB / HANA.BK

Sector: Electronics NEUTRAL

Rating: HOLD
4Q22 core earnings miss Target Price: Bt55.00
Price (February 27, 2023): Bt55.75

4Q22 core earnings were 16% below our estimate Key statistics
Market cap Bt44.9bn USD1.3bn
HANA posted a 4Q22 net profit of Bt1.1bn, a YoY turnaround and up 12-mth price range Bt32.8/Bt65.0
128% QoQ. Stripping out an FX gain, core earnings would be Bt553m, up 12-mth avg daily volume Bt535m USD15.4m
42% YoY but down 34% QoQ. The core number was 16% below our # of shares (m) 805
Est. free float (%) 57.8
expectation (and 14% shy of the consensus), due to heavier SG&A
Foreign limit (%) 100.0
expenses and lower sales than assumed.
Share price perf. (%) 1M 3M 12M
Result highlights Relative to SET (0.7) 11.4 (7.0)
Absolute (3.9) 12.1 (10.4)
Revenue totaled Bt7.1bn, up 14% YoY but down 6% QoQ (up 4% YoY
but down 5% QoQ in US dollar terms to US$195m). GM was 13.4%, up Financial summary
from 10.8% in 4Q21 but down from 15.5% in 3Q22. The SG&A/sales ratio FY Ended 31 Dec 2022 2023E 2024E 2025E
Revenues (Btm) 27,167 30,347 34,356 38,564
was 7.1%, up from 5.8% in 4Q21 and 5.4% in 3Q22.
Net profit (Btm) 2,102 2,800 3,235 3,718
EPS (Bt) 2.61 3.48 4.02 4.62
Outlook EPS growth (%) +36.0% +33.2% +15.5% +14.9%
We anticipate that shortages of component parts will persist into 2023 Core profit (Btm) 2,398 2,800 3,235 3,718
Core EPS (Bt) 2.98 3.48 4.02 4.62
(though somewhat eased compared with 2022). Demand for automotive- Core EPS growth (%) +5.4% +16.8% +15.5% +14.9%
related products should be solid. However, demand for consumer PER (x) 19.1 16.0 13.9 12.1
PBV (x) 1.7 1.8 1.7 1.5
products will probably weaken. We expect HANA’s sales to rise YoY and Dividend (Bt) 1.0 1.3 1.5 1.8
QoQ in 1Q23, but GM will be squeezed by higher raw material prices. Dividend yield (%) 2.0 2.4 2.8 3.2
ROE (%) 9.0 11.5 12.4 13.2
The loss at its SiC business should be shallower, as mass production
started in 4Q22. Baht appreciation against the greenback will squeeze CG / CAC Anti-Corruption Certification
1Q23 GM. HANA should report YoY earnings growth (flattish QoQ) for
1Q23 from a low 1Q22 base. Yes
/
What’s changed?
Our 2023 core earnings forecast stands unchanged.

Recommendation
HANA comes with risks associated with the global economic slowdown,
supply chain issues, and geopolitical tensions. The likelihood of the cycle
peaking soon and the limited scope for earnings forecast-upsizing may
create downside risks into 2023. Moreover, the benefit from baht deprec-
iation may reverse in 2H23. However, HANA’s strong YoY 1Q23 earnings
growth profile (before entering a soft phase in 2Q23) is likely to support
its stock price in the interim. We recommend a wait-and-see stance for
now.

Napon Jaisan
Capital Market Fundamental Investment
Analyst
napon.jai@bualuang.co.th
+66 2 618 1349

Please see final page for additional important disclosures. Bualuang Securities Public Company
See disclaimer at the end of report Limited (“BLS”) is a foreign broker-dealer unregistered in the USA. BLS research is prepared by
research analysts who are not registered in the USA. BLS research is distributed in the USA
pursuant to Rule 15a-6 of the Securities Exchange Act of 1934.
 | RESEARCH

HANA: Financial Tables – Year

PROFIT & LOSS (Btm) 2021 2022 2023E 2024E 2025E Revenue growth and asset turnover
Revenue 23,780 27,167 30,347 34,356 38,564
Cost of sales and services (20,493) (23,506) (26,196) (29,589) (33,136) % Revenue growth (%) (LHS)
3,287 3,661 4,150 4,767 5,428 x
Gross profit Asset turnover (x) (RHS)
SG&A (1,423) (1,695) (1,832) (2,006) (2,174) 25 1.2
EBIT 1,864 1,966 2,318 2,762 3,254 20 1.0
Interest expense (7) (13) (13) (13) (13) 15
10 0.8
Other income/exp. 471 552 552 552 552
2,327 2,506 2,857 3,301 3,793 5 0.6
EBT 0
Corporate tax (53) (107) (57) (66) (76) 0.4
(5)
After-tax net profit (loss) 2,274 2,398 2,800 3,235 3,718 (10) 0.2
Minority interest 0 0 0 0 0 (15) 0.0
Equity earnings from affiliates 0 0 0 0 0 19 20 21 22 23E 24E 25E
Extra items (729) (296) 0 0 0
Net profit (loss) 1,545 2,102 2,800 3,235 3,718 A/C receivable & A/C payable days
Reported EPS 1.92 2.61 3.48 4.02 4.62
days AR / Sales (days)
Fully diluted EPS 1.92 2.61 3.48 4.02 4.62
AP / Cost of Goods (days)
Core net profit 2,274 2,398 2,800 3,235 3,718 80
Core EPS 2.83 2.98 3.48 4.02 4.62
EBITDA 3,510 4,148 4,433 4,834 5,289 60
KEY RATIOS
23.3 14.2 11.7 13.2 12.2 40
Revenue growth (%)
Gross margin (%) 13.8 13.5 13.7 13.9 14.1
20
EBITDA margin (%) 14.8 15.3 14.6 14.1 13.7
Operating margin (%) 9.8 9.3 9.5 9.6 9.9 0
Net margin (%) 6.5 7.7 9.2 9.4 9.6 19 20 21 22 23E 24E 25E
Core profit margin (%) 9.6 8.8 9.2 9.4 9.6
ROA (%) 5.8 7.3 9.1 9.8 10.4 Profit margins
ROCE (%) 6.9 9.0 11.5 12.4 13.2
Asset turnover (x) 0.9 0.9 1.0 1.0 1.1 % Gross margin (%)
Current ratio (x) 4.5 5.1 3.6 3.7 3.8 15 EBIT margin (%)
Gearing ratio (x) 0.0 0.0 0.0 0.0 0.0
Interest coverage (x) 248.8 157.2 185.3 220.8 260.1
10
BALANCE SHEET (Btm)
Cash & Equivalent 3,304 2,375 3,637 4,270 5,081
5
Accounts receivable 4,553 4,981 5,325 6,028 6,767
Inventory 6,857 9,457 10,530 11,922 13,382
PP&E-net 9,663 10,853 10,552 10,288 10,056 0
Other assets 3,477 2,037 1,611 1,798 2,001 19 20 21 22 23E 24E 25E
Total assets 27,853 29,703 31,656 34,306 37,286
3,506 4,161 4,949 5,603 6,289 Capital expenditure
Accounts payable
ST debts & current portion 0 0 0 0 0 Bt,bn Capex (Bt,bn) %
Long-term debt 3 0 0 0 0 Capex / Net PPE (%)
Other liabilities 1,286 1,680 1,680 1,680 1,680 5.0 45
Total liabilities 4,795 5,841 6,629 7,283 7,969 40
4.0 35
Paid-up capital 805 805 805 805 805
30
Share premium 1,723 1,723 1,723 1,723 1,723 3.0 25
Retained earnings 19,859 20,770 22,498 24,495 26,789 20
2.0
Shareholders equity 23,058 23,862 25,026 27,023 29,317 15
Minority interests 0 0 0 0 0 1.0 10
Total Liab.&Shareholders' equity 27,853 29,703 31,656 34,306 37,286 5
0.0 0
CASH FLOW (Btm) 19 20 21 22 23E 24E 25E
Net income 1,545 2,102 2,800 3,235 3,718
Depreciation and amortization 1,175 1,630 1,563 1,520 1,483 Debt serviceability
Change in working capital (2,566) (2,656) (797) (1,652) (1,734)
FX, non-cash adjustment & others 753 266 0 0 0 x (ST debt + Interest) / EBITDA
Cash flows from operating activities 907 1,342 3,566 3,103 3,467 (Debt + Interest) / EBITDA
0.2
Capex (Invest)/Divest (4,097) (2,471) (1,232) (1,232) (1,232)
Others 1,157 1,302 0 0 0 0.2
Cash flows from investing activities (2,939) (1,169) (1,232) (1,232) (1,232)
Debt financing (repayment) (11) (10) 0 0 0 0.1
Equity financing 0 0 0 0 0
Dividend payment (1,409) (1,207) (1,072) (1,239) (1,423) 0.1
Others. 0 (1) 0 0 0
(1,420) (1,218) (1,072) (1,239) (1,423) 0.0
Cash flows from financing activities
(3,452) (1,046) 1,262 633 811 19 20 21 22 23E 24E 25E
Net change in cash
Free cash flow (Btm) (3,189) (1,129) 2,335 1,871 2,235 Dividend payout
FCF per share (Bt) (4.0) (1.4) 2.9 2.3 2.8
Bt/Shr Dividend (Bt)
%
Payout ratio (%)
2.5 120
2.00
2.0 100
1.54 1.77
1.5 1.30 1.40 1.33 80
1.00 60
1.0
40
0.5 20
0.0 0
19 20 21 22 23E 24E 25E

••• HANA 2
 | RESEARCH

HANA: Financial Tables – Quarter

QUARTERLY PROFIT & LOSS (Btm) 4Q21 1Q22 2Q22 3Q22 4Q22 Revenue trend
Revenue 6,260 6,107 6,390 7,545 7,125
Bt,bn Revenue (Bt,bn) (LHS) %
Cost of sales and services (5,587) (5,445) (5,512) (6,378) (6,171)
Revenue growth (% YoY)
Gross profit 673 663 878 1,167 954 8 35
SG&A (362) (381) (401) (408) (505) 7 30
EBIT 311 282 477 759 449 6 25
5
Interest expense (3) (1) (3) (3) (6) 20
4
Other income/exp. 94 133 143 133 142 15
3
EBT 402 414 618 890 585 2 10
Corporate tax (11) (15) (15) (46) (31) 1 5
After-tax net profit (loss) 391 399 603 843 553 0 0
2Q21 4Q21 2Q22 4Q22
Minority interest 0.0 0.0 0.0 0.0 0.0
Equity earnings from affiliates 0.0 0.0 0.0 0.0 0.0 Revenue trend (accumulated)
Extra items (447) (34) (358) (427) 522 Bt,bn Accum. Revenue (Bt,bn)
%
Net profit (loss) (56) 365 245 417 1,075 % of FY Revenue
Reported EPS (0.07) 0.45 0.30 0.52 1.34 30
100 100 120
Fully diluted EPS (0.07) 0.45 0.30 0.52 1.34 25
100
391 399 603 843 553 20 74 74
Core net profit 80
Core EPS 0.48 0.49 0.75 1.04 0.69 15 47 46 60
EBITDA 733 774 1,003 1,312 1,060 10 22 40
5 20
KEY RATIOS
0 0
Gross margin (%) 10.8 10.8 13.7 15.5 13.4
2Q21 4Q21 2Q22 4Q22
EBITDA margin (%) 11.7 12.7 15.7 17.4 14.9
Operating margin (%) 6.5 6.8 9.7 11.8 8.3 Net profit trend (accumulated)
Net margin (%) (0.9) 6.0 3.8 5.5 15.1
Bt,m Accum. Profit (Bt,m)
Core profit margin (%) 6.2 6.5 9.4 11.2 7.8 %
% of FY Profit
BV (Bt) 28.5 28.7 28.5 29.4 29.7 2,500
104 100 100 120
ROE (%) (1.0) 6.3 4.2 7.1 18.1 2,000 100
ROA (%) (0.8) 5.2 3.4 5.6 14.4
1,500 67 80
Current ratio (x) 4.4 3.9 4.8 3.4 3.6 49
60
Gearing ratio (x) 0.0 0.0 0.0 0.0 0.0 1,000 29
17 40
Interest coverage (x) 268.5 532.6 376.5 522.0 180.2 500 20
QUARTERLY BALANCE SHEET (Btm) 0 0
3,304 3,484 3,382 2,424 2,375 2Q21 4Q21 2Q22 4Q22
Cash & Equivalent
Accounts receivable 4,553 4,861 4,846 5,828 4,981
Inventory 6,857 7,408 8,255 9,128 9,457 Gross profit margin
PP&E-net 9,663 10,023 9,663 10,656 10,853 % FY GPM (%)
Other assets 3,477 2,750 3,477 2,140 2,037 Gross margin (%)
27,853 28,525 29,623 30,176 29,703 18
Total assets 16
Accounts payable 3,506 4,020 3,506 4,835 4,161 14
ST debts & current portion 0 0 0 0 0 12
10
Long-term debt 3 3 3 0 0 8
Other liabilities 1,286 1,308 1,286 1,542 1,680 6
4
Total liabilities 4,795 5,330 4,795 6,378 5,841 2
Paid-up capital 805 805 805 805 805 0
Share premium 1,723 1,723 1,723 1,723 1,723 2Q21 4Q21 2Q22 4Q22
Retained earnings 19,859 20,224 19,859 20,081 20,770
23,058 23,194 23,058 23,798 23,862 EBIT margin
Shareholders equity
Minority interests 0 0 0 0 0 % FY EBIT margin (%)
Total Liab.&Shareholders' equity 27,853 28,525 27,853 30,176 29,703 EBIT margin (%)
12
KEY STATS 4Q21 1Q22 2Q22 3Q22 4Q22
Sales (USD) 188 186 186 205 195 9
FX 33 33 34 37 36
6

0
2Q21 4Q21 2Q22 4Q22

Company profile
Hana Microelectronics Plc (HANA) and its subsidiaries have been engaged in the manufacture and trading of electronic components. Hana operates in
two broad intermediate electronics categories: 1) Printed Circuit Board Assembly (PCBA), the manufacture of PCBAs, and 2) Integrated Circuits (IC),
production of IC assemblies. The company is headquartered in Bangkok and has six manufacturing facilities in Thailand, China, the US, and Cambodia.

••• HANA 3
 | RESEARCH

Figure 1 : 4Q22 results

FY Ended 31 Dec (Btm) 4Q22 4Q21 YoY % 3Q22 QoQ 2022 2021 YoY %
%
Income Statement
Revenue 7,125 6,260 14 7,545 (6) 27,167 23,780 14
Cost of sales and services (6,171) (5,587) 10 (6,378) (3) (23,506) (20,493) 15
 Sales were 4% below our
EBITDA 1,060 733 45 1,312 4,148 3,636
EBIT 449 311 44 759 (41) 1,967 1,864 6
assumption
Interest expense (6) (3) 120 (3) 139 (13) (7) 69
Other income/exp. 142 94 51 133 7 552 471 17  Gross margin was 13.4%—in line
Equity earnings from affiliates 0 0 nm 0 nm 0 0 nm with our expectation of 13.5%
Extra items 522 (447) nm (427) nm (297) (729) nm
EBT 585 402 45 890 (34) 2,506 2,327 8
Corporate tax (31) (11) 175 (46) (107) (53) 103
 SG&A expenses were 25%
Minority interest 0 0 nm 0 nm 0 0 nm heavier than we had modeled
Net profit (loss) 1,075 (56) nm 417 158 2,102 1,545 36
Reported EPS 1.34 (0.07) nm 0.5 160 2.61 1.91 36
Core net profit 553 391 41 843 (34) 2,398 2,274 5

Key ratios
Gross margin (%) 13.4 10.8 15.5 13.5 13.8
EBITDA margin (%) 14.9 11.7 17.4 15.3 15.3
EBIT margin (%) 6.3 5.0 10.1 7.2 7.8
Tax rate (%) 5.3 2.8 5.2 4.3 2.3
Net margin (%) 15.1 (0.9) 5.5 7.7 6.5
Current ratio (x) 3.6 4.4 3.4 3.6 4.4
Gearing ratio (x) 0.0 0.0 0.0 0.0 0.0
Interest coverage (x) 180.2 268.5 522.0 155.7 248.8

Balance Sheet
Cash & Equivalent 2,375 3,304 (28) 2,424 (2)
Total assets 29,703 27,853 7 30,176 (2)
ST debts & current portion 0 0 nm 0 nm
Long-term debt 0 3 (100) 0 nm
Total liabilities 5,841 4,795 22 6,378 (8)
Retained earnings 20,770 19,859 5 20,081 3
Shareholders equity 23,862 23,058 3 23,798 0
Minority interests 0 0 nm 0 nm
BV (Bt) 29.7 28.5 4 29.4 1

Source: Bualuang Research estimates

••• HANA 4
 | RESEARCH

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ADVANC AMATA AOT BDMS BH CBG CENTEL CPALL GLOBAL GPSC IRPC KBANK KCE KTC MINT
PTG PTT PTTEP PTTGC SCB SPRC TOP WHA ESSO STA BGRIM GULF MTC AWC CRC
CPF CPN HANA HMPRO IVL OSP SAWAD BANPU BCH BTS CK SCC STEC TISCO TU
INTUCH RATCH VGI SCGP TQM COM7 DOHOME JMT CHG TMB BAM BCP AP KTB KKP
OR BEM GUNKUL EA SPALI RBF STGT MEGA JMART BEC SYNEX BLA KEX RCL SINGER
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THE INITIAL PUBLIC OFFERING (IPO) OF SECURITIES.

Lead underwriter/
Financial Advisor Underwriter/
Co-underwriter
MEB

CG Rating

Score Range Score Range Description

90 – 100 Excellent
80 – 89 Very Good
70 – 79 Good
60 – 69 Satisfactory
50 – 59 Pass
Below 50 No logo given N/A

Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC)
under Thai Institute of Directors
 companies that have declared their intention to join CAC, and
 companies certified by CAC.

••• HANA 5
 | RESEARCH

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BUALUANG RESEARCH – RECOMMENDATION FRAMEWORK

STOCK RECOMMENDATIONS SECTOR RECOMMENDATIONS

BUY: Expected positive total returns of 15% or more over the next 12
months.
HOLD: Expected total returns of between -15% and +15% over the next 12
months.
SELL: Expected negative total returns of 15% or more over the next 12
months.
TRADING BUY: Expected positive total returns of 15% or more over the next
3 months.
OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is
expected to outperform the relevant primary market index over the next 12 months.
NEUTRAL: The industry, as defined by the analyst's coverage universe, is
expected to perform in line with the relevant primary market index over the next 12
months.
UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is
expected to underperform the relevant primary market index over the next 12
months.

••• HANA 6
 | RESEARCH

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••• HANA 7