網(wǎng)絡(luò)設(shè)備和IT硬件行業(yè)策略分析

1、North America Equity ResearchAugust 2020Networking Equipment & IT HardwareVirtual Summer Lunch SeriesIT Hardware/ Networking Equipment Samik Chatterjee AC212-622-0798 HYPERLINK mailto:samik.x.chatterjee samik.x.chatterjeeJ.P. Morgan Securities LLCBloomberg: JPMA ChatterjeeJoseph Cardoso212-622-9036

2、HYPERLINK mailto:joseph.cardoso joseph.cardosoJ.P. Morgan Securities LLCBharat Daryani212-622-8039 HYPERLINK mailto:bharat.daryani bharat.daryaniJ.P. Morgan India Private LimitedSee the end pages of this presentation for analyst certification and important disclosures, including non-US analyst discl

3、osures.J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in mak

4、ing their investment decision.J.P. Morgan Research Coverage Universe of Networking & IT Hardware StocksOverweightNeutralUnderweightNot RatedNetworking EquipmentCiena (CIEN)Arista (ANET)Applied Optoelectronics (AAOI)Corning (GLW)Cisco (CSCO)Casa Systems (CASA)II-VI (IIVI)CommScope (COMM)Juniper (JNPR

5、)Extreme Networks (EXTR)Keysight (KEYS)F5 Networks (FFIV)Lumentum (LITE)Fabrinet (FN)NeoPhotonics (NPTN)Harmonic (HLIT)Viavi (VIAV)Infinera (INFN)National Instruments (NATI)OverweightNeutralUnderweightNot RatedIT HardwareApple (AAPL)Amphenol (APH)Avaya (AVYA)Sensata (ST)Qualcomm (QCOM)TE Connectivit

6、y (TEL)2Table of ContentsIndustry Themes4Sector Views11Key Differentiated Calls15Company Sections17Appendix : Company Models25 All Pricing as of 8/13/20#1: 5G Smartphone Resilience Amidst Tough IndustryBullish and Above Consensus on 5G Shipment OutlookForecast 225 mn 5G units for 2020E vs. 210 mn pr

7、ior and 525 mn units for 2021E vs. 450 mn priorMore bullish vs. investor expectations led by steep price declines in China, high mix of 5G sell-ins and slightly stronger shipment forecast for AppleExpect China shipments at 120 mn for 2020E and 280 mn for 2021EASPs for 5G phones in China expected to

8、hit Rmb1,500 or $200 in late 3Q20; this suggests 5G selling price will soon bench with 4G modelsestimate 80% of China shipments could be 5G based in 2021Expect peak growth in 2021E, with 2022E 5G volume estimate of 725 mn unitsGlobal 5G Shipments ForecastChina 5G Shipments800725400350300250200150100

9、50081%37%1202802020E2021EChina 5G Smartphone Shipments120%100%99%80%60%40%20%3500%2022E5G% of Smartphone Shipments700600525500400300225200100-2020E2021E2022ESource: J.P. Morgan estimates.Source: J.P. Morgan estimates.#2: SP Capex Resilient But Priority Has Changed TemporarilyCable and Telco Capex Ou

10、tlook Largely ResilientAggregate Telco capex slightly soft in 2Q- remains on track for modest growth y/y in 20202020 capex guide maintained at AT&T and VerizonCable capex better than expectations in 2Q; full year outlook turns modestly better vs. start of the yearUpdated outlook calls for -4% declin

11、e for 2020; though implies 17% growth H/H in 2H20 relative to the 22% H/H increase seen in 2H19 Carrier Capex Outlook20181Q192Q193Q194Q191Q202Q20E3Q20E4Q20E2020ETop 4 U.S Telcos ($ mn)Growth (y/y)47,6822%12,77612,02412,05911,50613,0532%11,539-4%11,798-2%11,9464%48,3361%U.S Cable Operators ($ mn)Grow

12、th (y/y)21,390-3%4,3464,3724,8635,7694,068-6%4,4702%4,796-1%5,166-10%18,500-4%Source: DellOro, Company Reports and J.P. Morgan estimates.Cable and Telco Capex Priorities for 2020 Have ChangedFocus has shifted back to capacity builds and bandwidth requirementsOptical, Routing, and Cable equipment sup

13、pliers have benefittedIncremental spend has favored incumbents over challengersCapex on new wireless network builds has been delayedWireless network utilization has droppedSPs have delayed capex towards wireless network builds Carrier Capex OutlookCapex201520162017201820192020ETop 4 U.S Telcos ($ mn

14、)Y/Y % Change48,01545,894-4%46,6972%47,6822%48,0011%48,3361%U.S Cable Operators ($ mn)Y/Y % Change19,55920,4955%21,9417%21,390-3%19,350-10%18,500-4%Europe Carriers ( mn)Growth (y/y)41,76340,316-3%40,8401%40,7410%40,7460%41,2561%Source: DellOro, Company Reports and J.P. Morgan estimates.#3: Cloud Cap

15、ex Healthy But Outlook for 2H20 is ModeratingCloud Spending Outlook Moderating, But Still Healthy into 2H20Capex better than expected in C2Q with strong growth for AMZN and MSFT; FB increasing guide and Google largely in lineMSFTs guidance implies growth of +21% y/y (or +$1 bn y/y)FB raised its FY g

16、uidance to $16 bn, implying a full-year rise of +2% y/y to reflect resumption of DC constructionBased on latest updates, we see modest downside to our 2H20 expectation for +9% H/H growth, although still expect modest growthCommentary from companies and investors for 2H20 digestion colored by lower y

17、/y growth in 2H vs. 1H70%60%50%40%30%20%40%17%38%25%52%66%40%11%19%40%35%30%25%20%15%10%5%2%25%11%13%34%24%13%24%9%10%1%4%0%-5%0%-10%-6%-4%-10%5-5%66778899EE-15%55667788-10%9EEDC Capex Y/Y Growth from Top 4 US CSPsDC Capex Growth (H/H) from Top 4 US CSPs1H12H151H12H11H12H11H12H11H12H11H202H201H12H11

18、H12H11H12H11H12H11H192H11H202H20Source: DellOro, J.P. Morgan estimates.Source: DellOro, J.P. Morgan estimates.Sector ViewsUpdated Thoughts After C2Q EarningsTraditional Networking Companies (CSCO, ANET, JNPR, GLW, COMM, EXTR, CASA, HLIT)Between CSCO, JNPR and ANET, still see best risk reward on JNPR

19、;JNPR: demonstrated building momentum of top-line drivers; look for material earnings catalysts on cycling past supply headwinds;JNPR: Order momentum and resilient top-line trends at SP and Cloud offsetting Enterprise softnessANET: Could be interesting into 2021 with a binary outcome on the share pr

20、ice relative to 400G timingNewly rate GLW Overweight on outsized earnings recovery led by end-market improvement;GLW: Continuing positive data points for Panels, in conjunction with improvement in Optical Communications, Smartphones and Automotive markets.GLW: Lapping peak spending cycle set to bene

21、fit the recoveryOptical Systems (CIEN, INFN)Optical Systems: Prefer Ciena to Infinera on Quality of ExecutionInvestment themes include bandwidth demand acceleration, 5G investments, and share gains from Huawei; prefer Ciena to participate in these themesUpside higher on Infinera bull case but see hi

22、gher execution risksUpdated Thoughts After C2Q EarningsOptical Components (LITE, IIVI, NPTN)Huawei slow-down is key watch-point; impacting companies with limited diversification;Rate LITE and IIVI both OverweightLITE: Outperformance on margins and revenue upside drivers through increase in supply to

23、 lead to earnings catalysts;IIVI: Conservative management team with disciplined long-term outlook, set up easier going into F1Q, although there could be downside to elevated investor expectations for 3D sensing revenue;NPTN: Despite solid technology, customer concentration with Huawei will likely li

24、mit re-rating near-termTest & Measurement (VIAV, NATI, KEYS)Lagged the broader group on account of lower visibility and concerns relative to SP spending;KEYS: Prefer on secular growth drivers relative to technology cycles including 5G; discussions into earnings focused on supply normalizationVIAV: M

25、ost attractive from a valuation perspective; expect revenue/easing recovery on easing COVID-19 restrictions towards field activityIndustrial Technology (TEL, APH, ST)Prefer TEL over APH and ST on Automotive RecoveryV-Shaped recovery is not materializing; expect speed bumps in revenue/earnings recove

26、ryCisco: Sluggish Enterprise Spending Limiting Revenue RecoveryDowngraded to Neutral into C2Q earnings on expectations of Enterprise spending recovery lagging consumer spending, limiting visibility into revenue growthExpect Campus switching - one of the largest revenue contributors, to have near and

27、 long-term headwinds from COVID-19Key Earnings Developments:Revenue decline of -9% y/y in C2Q led by -16% decline in Infrastructure Platforms and -9% decline in Applications revenue, offset by 10% growth in SecurityWithin Applications, solid growth in Webex and AppDynamics was offset by decline in o

28、n-premise UC portfolioProduct orders worsened and declined -10% y/y in C2Q (-5% in C1Q) limiting q/q recovery, in contrast to coverage companies that guided to recovery from 2Q troughCurrent product portfolio more aligned to on-prem investments from Enterprises and SMB, need notable transformationCi

29、sco guided to re-aligning R&D to growth areas including SaaS based solutions, webscale infrastructure, multi-cloud architectureKey Differentiated CallsQualcomm: 5G Moving into High GearTop Pick and add to AFL heading into C2Q earnings led by expectation of volume and content ramp in 5G smartphones a

30、nd attractive valuationKey recent developments:Announced Huawei Licensing agreement improves QTL revenue outlook by $800 mn- $1 bnModestly softer MSM guide for F4Q implies push out at Apple rather than market share dynamicsRF quarterly revenue of $750 mn (Sep) implies $3 bn annualized in FY21; faste

31、r progress than communicated at the analyst dayFavorable ruling in FTC case eliminated near- to medium-term risk to QTL revenuesBull case for QCOM:Further upside from license to ship to Huawei to substitute insourcing from HiSiliconUpside to 5G smartphone volume projections from greater mixQTL reven

32、ue upside from 5G smartphone adoption (higher ASPs) and IoT adoptionGrowth beyond 5G:RF share increases beyond initial target of 20%Adjacent market opportunities in automotive and computeKey Differentiated CallsCorning: Strongest Earnings Recovery in Peer GroupTurned positive on strongest earnings r

33、ecovery in the peer group led by end-market improvementExpect investor sentiment to be favorable in relation to owning strong earnings recovery, with investors willing to pay higher than typical valuation multiples on account of multi-year recoveriesCost management implies strong incremental margins

34、 on revenue recoveryExpect improvement in cash flow from profit improvement as well as cycling past peak spending cycle on capacity increasesJuniper: Building Momentum with Customers to Help Surpass Low ExpectationsImproving revenue outlook with Telco SP and cloud, being offset by weakness in Enterp

35、rise spending and supply chain headwindsSustained revenue momentum and moderating supply chain headwinds should drive earnings growth above consensus estimates (JPMe 6% and 11% above consensus for FY20 and FY21)Medium-term upside opportunities include 400G cloud switching market share, 400G optics,

36、and increasing Enterprise market shareCompany ViewsApple (AAPL, OW) Product Resilience amidst Weak Macro; Product Delay not to Have Impact on 5G BenefitStrong iPhone 11 and SE momentum drove iPhone resilience in F3Q; Mac and iPad benefitting from near- term tailwindsCurrent product momentum in iPhon

37、e to continue into F4Q led by velocity of purchases in JulyUnderappreciated Enterprise opportunity to continue benefit Mac and iPad growth in F4Q, better than investor expectations of one-time benefitModest delay in product launch timing does not change our 5G volume outlookDespite the delay, we for

38、ecast 205 mn and 225 mn iPhone shipments in C2020 and C2021, respectivelyServices momentum expected to continue despite near-term weakness in Apple CareRevenue grew +14.8% y/y in F3Q with double digit growth in App Store, Apple Music, Video and cloud services; offset by weakness in Apple Care and Ad

39、vertising revenuesReached its target of doubling FY16 services revenues ahead of scheduleValuation multiple of 27x NTM EPS or 23x FY22 EPS is much higher than typicalStill see upside on potential earnings revisions on much stronger build outlook for supply chainModest revenue upside to have strong f

40、low-through to earningsOur Dec-21 PT of $460 is based on 23x target P/E multipleApple (AAPL, OW) Key EstimatesiPhone units Forecast (mn)iPhone ASPiPhone Revenue Growth CompositionServices Revenue ($ bns)Source: Company Reports and J.P Morgan EstimatesSource: Company Reports and J.P Morgan EstimatesS

41、ource: Company Reports, J.P Morgan EstimatesSource: Company Reports and J.P Morgan EstimatesQualcomm (QCOM, OW) 5G Momentum Intact; Huawei Licensing Activates Further Bull CaseLeadership position in 5G transition, strong revenue growth outlook led by content growth to 1.5x vs. 4G, resumption of Appl

42、e shipments and meaningful share in RFFENew Licensing deal with Huawei, QCOM now has agreement with every major OEMDeal adds $800 mn-$1 bn in QTL revenues annuallyImportantly, presents further bull case around potential chip shipments to HuaweiReversal in Antitrust Decision by Appeals Court removes

43、significant overhang on licensing businessSofter MSM unit shipment outlook for F4Q largely led by push out at Apple, expect 10-15 mn shipments in F4Q, with steeper ramp in F1Q21 (Dec)RFFE revenue ramping, F4Q guidance implies $3 bn annual run-rateRelative to $3.5 bn implied in 20% market share targe

44、t laid out during 2019 Analyst DaySee optionality on longer-term revenue drivers from adjacent opportunities in Auto, IoT, Compute$25 bn SAM by 2023, growing at high-single digit CAGROur Dec-20 PT of $120 based on 18.5x target P/E multiple to account for leadership in 5GQualcomm (QCOM, OW) Key Estim

45、atesMSM Unit Forecast (mn units)Average ASP ($)Gross Margin OutlookQCT EBT Margin OutlookSource: Company Reports and J.P Morgan EstimatesSource: Company Reports and J.P Morgan EstimatesSource: Company Reports and J.P Morgan EstimatesSource: Company Reports and J.P Morgan EstimatesCorning (GLW, OW) E

46、nd-Market Recovery Driving Earnings Upside TrajectoryRate GLW shares OW on increasing visibility into demand improvement driving earnings recoverySee improvement across Display, Automotive and Smartphone end-marketsEnd market recovery to drive strong incremental margins; strongest earnings recovery

47、amongst the peer group of 81% H/H in 2H20 and 43% y/y in 2021Expect q/q ramp in Display revenues through 2020; favorably positioned to capture majority growth in large screen TVs through Gen 10.5 facilitiesTV demand expected to remain resilient on in-home entertainment with WFH benefitting IT produc

48、tsHigher bandwidth demand and resumption in outdoor projects to support Optical recoveryWithin other segments, Specialty Materials continues to outperform on content growth in smartphones, strong tablet, PC, and semiconductor equipment demandOur Dec-20 PT of $36 based on valuing normalized earnings

49、at 16x P/E multipleJuniper (JNPR, OW) See Upside from Demand Resilience within Telco and CloudDemand resilience from Telecom and Cloud customers offsetting Enterprise spending headwindsDemand momentum continued in 2Q with double digit order growth in Cloud and Service Providers, offset by decline in

50、 EnterprisesGross margin expansion on revenue improvement and cycling past supply chain headwinds2Q20 gross margin of 58.3% had 120 bps headwind from logistics costs; expect gross margin expansion as company cycles past headwindsOptionality to step into potential share gains in DC switching with 400

51、G and DC opticsStrongest opportunity in Spine layer of hyperscalers- TAM $1.8 bn; $3 bn opportunity in DC opticsStrong earnings growth trajectory on combination of modest revenue growth, consistent margin expansion and buybacksOur Dec-20 PT of $28 is based on14.0 x target P/E multipleKeysight (KEYS,

52、 OW) Well Positioned as Recovery Play on Supply Chain NormalizationCore holding for leverage to 5G theme, led by leadership position in Test & Measurement for the Communications end-marketStrong recovery play on supply chain normalization with demand remaining robustSecular leverage to increase comp

53、lexity with technology cyclesSofter revenue in F2Q and F3Q guide led by supply chain constraints rather than demandRobust order trends (book-to-bill of 1.22x at F2Q) and incremental backlog drive confidence in strong revenue trends on cycling past supply chain headwindsPrimary investor pushback is c

54、yclicality of leverage to 5G R&D phaseSee sustainable top-line growth as service providers maintain steady pace of 5G investments and roll-out in stages as use cases and standards evolveOur Dec-20 PT of $127 based on 25x target P/E multipleAppendix- Company Summary ModelsApple (AAPL, OW)Sep Fiscal Y

55、ear End201820191Q202Q203Q204Q20E2020E1Q21E2Q21E3Q21E4Q21E2021EiPhone Units2181907039384519284514156231iPhone Rev enue164,888142,38155,95728,96226,41829,798141,13573,69438,11028,28638,338178,428iPad rev enue18,38021,2805,9774,3686,5826,69323,6206,1914,5046,1286,55923,382Mac rev enue25,19825,7407,1605

56、,3517,0798,30227,8927,4515,7097,4338,30228,895Wearables Rev enue17,38124,48210,0106,2846,4508,47831,22213,3177,7347,5299,57838,158Serv ices Rev enue39,74846,29112,71513,34813,15614,37253,59115,04715,37315,84716,40062,666Revenue265,595260,17491,81958,31359,68567,643277,460115,70071,43065,22279,178331

57、,529% chg y/y15.9%-2.0%8.9%0.5%10.9%5.6%6.6%26.0%22.5%9.3%17.1%19.5%Product GM34.4%32.2%34.2%30.3%29.7%29.1%31.3%34.2%31.6%30.6%31.2%32.3%Servces GM60.8%63.7%64.4%65.4%67.2%67.0%66.0%67.0%67.0%67.0%67.0%67.0%Gross Margin38.3%37.8%38.4%38.4%38.0%37.2%38.0%38.5%39.2%39.4%38.7%38.9%Opex30,94134,4629,64

58、89,5179,5899,77438,52810,4719,9299,84910,09540,343Opex as % of sales11.6%13.2%10.5%16.3%16.1%14.5%13.9%9.1%13.9%15.1%12.8%12.2%Operating Income (COI)70,89863,93025,56912,85313,09115,37066,88334,02418,05815,87720,50888,467operating margin26.7%24.6%27.8%22.0%21.9%22.7%24.1%29.4%25.3%24.3%25.9%26.7%Net

59、 Income59,53155,25622,23611,24911,25313,10757,84528,99715,41013,55417,49575,456Diluted EPS$11.87$11.85$4.99$2.55$2.58$3.05$13.18$6.82$3.67$3.26$4.25$18.00Diluted Shares (av g.)5,0164,6624,4554,4054,3554,3014,3904,2524,2054,1584,1124,192Cash237,100207,278207,061195,719195,273191,021191,021189,011180,

60、138172,800183,716183,716Debt114,483108,047108,292109,507112,723112,723112,723112,723112,723112,723112,723112,723Net Debt(122,617)(99,231)(98,769)(86,212)(82,550)(78,298)(78,298)(76,288)(67,415)(60,077)(70,993)(70,993)Net Lev erage-1.5x-1.3x-1.3x-1.1x-1.0 x-1.0 x-1.0 x-0.9x-0.7x-0.6x-0.7x-0.7xOperati