$ON Semiconductor (ON.US)$Since overvaluation (PE27) was exc...

Launched in 2000, it mainly provides automotive electricity and sensors and electrification technology. The main markets are Hong Kong, Singapore, the United Kingdom and the United States. The current price is 78.6. Since it is closely related to the automobile industry, the cycle is closer to the automotive sector.

It has grown amid fluctuations in revenue over the past 5 years, with an average growth rate of 7.1%, shrinking 0.9% in 2023, operating profit reaching a high point in 2022, shrinking 5.5% in 2023, net profit with significant capital asset depreciation in 2022, growing 14.8% on a low base in 2023, and an average growth rate of 2.1 times in the past 3 years. Interest expenses are converted into income in 2023. The gross margin increased from 35.8% to 47.1% in the past 5 years, and the return on net assets fell to 31.3% after rising from 6.5% to 35.3%.

The current price-earnings ratio is 16.1. Based on a 5-year average net profit of 1.11 billion yuan, the price-earnings ratio is 30. Considering the strong cyclicality of the automobile industry, current valuation is not very attractive.