Samsung: Semiconductors over Smartphones

Sector

ConglomeratesTechnology

Background

David Samra is Managing Director of the Artisan Partners International Value Team. We cover Samsung's dominant position in memory chip technology, the surprising distribution of margins among its component businesses, and how decades of family stewardship have shaped its success.

Cover

Date

January 31, 2024

Episode Number

147

Background and Overview

Samsung Electronics, headquartered in South Korea, is a global leader in semiconductors, mobile devices, and consumer electronics. Founded in 1969 as a component manufacturer, it evolved into a vertically integrated conglomerate under the leadership of KH Lee, who recognized the potential of memory semiconductors in the 1960s. Today, Samsung is a dominant player in memory chips (DRAM and NAND), display panels, and mobile handsets, with a smaller presence in consumer appliances like TVs and refrigerators. It employs 125,000 people in South Korea and is a national champion, contributing approximately 11% of South Korea’s GDP through its revenue.

Samsung’s business model is unique due to its vertical integration, combining component manufacturing (e.g., memory chips, displays, and processors) with finished products (e.g., smartphones and TVs). Unlike traditional consumer electronics firms like Sony or Panasonic, which primarily supply their own components, Samsung generates significant profits from third-party component sales, making it a hybrid of a B2B component supplier and a B2C branded product manufacturer.

Ownership and Recent Valuation

Samsung Electronics is publicly listed on the Korea Stock Exchange, with the Lee family maintaining significant influence through a complex web of cross-shareholdings typical of South Korean chaebols. The family’s ownership has been diluted over time due to capital raises to fund its capital-intensive operations, but corporate governance remains influenced by the family, with Jay Y. Lee as the current CEO.

The company does not have an American Depository Receipt (ADR), which limits accessibility for some international investors and may contribute to a valuation discount. The podcast suggests Samsung trades at approximately 7x pretax profits or 9x earnings on a normalized basis, reflecting a potential undervaluation compared to global peers. This valuation is notably low for a company with Samsung’s market dominance and growth potential, especially when compared to peers like TSMC, which commands a higher multiple.

Key Products, Services, and Value Proposition

Samsung operates across three primary segments, each with distinct value propositions:

1. Memory Semiconductors (55% of 2022 profits)
• Description: Samsung is the world’s largest manufacturer of DRAM (dynamic random-access memory) and NAND (flash memory), used in smartphones, PCs, servers, and IoT devices.
• Value Proposition: Leading-edge technology delivering smaller, more power-efficient chips with higher performance. Samsung’s scale and manufacturing expertise enable it to maintain market leadership and high margins.
• Revenue Contribution: Dominant in DRAM (43% market share) and NAND (33% market share), driven by third-party sales to global tech firms.
• Profitability: Margins range from 35-40% at cycle peaks to 5-10% at troughs, reflecting cyclicality but consistent profitability due to scale.
2. Mobile Handsets (25% of 2022 profits)
• Description: Samsung produces smartphones, leveraging its Android-based operating system and in-house components (e.g., displays, processors, and memory).
• Value Proposition: High-end hardware innovation (e.g., foldable displays, advanced cameras) differentiates Samsung in a mature market. Its scale in component manufacturing provides cost advantages.
• Revenue Contribution: Generates steady cash flow, with a 26% market share outside China, competing primarily with Apple.
• Profitability: Stable, high-margin business due to limited competition at the premium end.
3. Display Panels (14% of 2022 profits)
• Description: Produces OLED and LCD displays for smartphones, PCs, and TVs, including for competitors like Apple.
• Value Proposition: Cutting-edge display technology (e.g., foldable OLEDs) enhances device functionality and brand perception.
• Revenue Contribution: Significant third-party sales, with Samsung as a leading supplier to global OEMs.
• Profitability: High margins due to technological leadership and limited competition.
4. Other Consumer Electronics (3% of 2022 profits)
• Description: Includes TVs, refrigerators, and washing machines.
• Value Proposition: Strong brand recognition but low profitability due to commoditization.
• Revenue Contribution: Significant sales volume but minimal profit impact.
• Profitability: Low margins, as these are commoditized products with intense competition–
5. Foundry Business (10% of 2022 profits)
• Description: Manufactures application processors and other semiconductors for third parties (e.g., Qualcomm).
• Value Proposition: Provides an alternative to TSMC, leveraging Samsung’s leading-edge manufacturing capabilities.
• Revenue Contribution: Smaller but growing at 20% annually, with potential to become a significant profit driver.
• Profitability: Moderate margins, less cyclical than memory but benefiting from scale.

Segments and Revenue Model

Samsung’s revenue model is a blend of B2B component sales and B2C finished products, with distinct dynamics for each segment:

• Memory Semiconductors: Revenue is driven by volume (measured in 8-gigabit chips) and pricing, both highly cyclical. DRAM volumes have grown at 23% CAGR over the past decade, while NAND has grown at 37% due to market share gains from traditional hard drives. Prices are volatile, with DRAM prices falling from $3.25 to $1.70 and NAND from $0.71 to $0.39 in the recent downturn. Third-party sales to global tech firms (e.g., Apple, Microsoft) dominate, with demand tied to end-markets like smartphones, servers, and autonomous vehicles.
• Mobile Handsets: Revenue comes from unit sales of smartphones, primarily premium models. The market is mature, with limited volume growth, but Samsung maintains a 26% share outside China by focusing on high-end devices. Pricing is stable, with margins supported by in-house components and brand strength. Refresh cycles (e.g., driven by AI-enabled devices) can boost volumes periodically.
• Display Panels: Revenue is driven by sales of OLED and LCD displays to both Samsung’s handset division and third parties. Pricing is relatively stable, with margins benefiting from technological differentiation (e.g., foldable OLEDs). Demand is tied to smartphone and PC refresh cycles.
• Other Consumer Electronics: Revenue is high-volume but low-margin, driven by sales of commoditized products like TVs. Pricing is competitive, with limited differentiation.
• Foundry Business: Revenue is driven by contract manufacturing for third-party chip designers (e.g., Qualcomm). Growth is robust (20% annually), driven by capacity expansion and demand for leading-edge chips. Pricing is competitive but margins are stable due to high barriers to entry.

Splits and Mix

• Segment Mix (2022 Profit Contribution):
• Memory: 55%
• Mobile: 25%
• Display: 14%
• Foundry: 10%
• Consumer Electronics: 3%
• Geographic Mix: Samsung’s handset business has a 26% market share outside China, with limited presence in China due to geopolitical and competitive factors. Component sales are global, with significant exposure to North America and Asia.
• Customer Mix: Component businesses serve large tech firms (e.g., Apple, Microsoft), while handsets target premium consumer segments. Consumer electronics appeal to a broader, price-sensitive audience.
• End-Market Mix: Memory and displays are driven by smartphones, PCs, servers, and emerging markets like autonomous vehicles and IoT. Handsets and consumer electronics are consumer-driven.
• Mix Shifts: The profit mix is shifting toward components (memory, displays, foundry) as the handset market matures. The foundry business, though small, is expected to grow significantly, potentially altering the profit mix over the next 5-7 years.

KPIs

• Memory Volume Growth: DRAM at 23% CAGR, NAND at 37% CAGR over the past decade, with continued growth expected due to AI and autonomous vehicle demand.
• Price Trends: Cyclical, with significant declines in downturns (e.g., DRAM from $3.25 to $1.70).
• Market Share: Stable in DRAM (43%) and NAND (33%), with potential for gains as competitors cut spending.
• Handset Market Share: 26% outside China, stable but with limited growth potential.
• Foundry Growth: 20% annual revenue growth, indicating acceleration in a high-potential segment.

Headline Financials

• Revenue Trajectory: Revenue growth is driven by component businesses, with memory and foundry as key drivers. Handset revenue is stable, while consumer electronics contributes high volume but low profitability. Historical CAGRs for memory volumes (23% DRAM, 37% NAND) suggest strong growth, though pricing volatility impacts revenue.
• EBITDA and Margins: EBITDA margins vary significantly by segment. Memory margins range from 5-10% in downturns to 35-40% at peaks, reflecting cyclicality. Handset margins are stable but lower, while displays and foundry offer consistent mid-to-high margins. Operating leverage is significant in memory and foundry due to high fixed costs (e.g., $170M EUV machines).
• FCF: The handset business generates ~$10B in FCF annually, providing a stable base. Memory and foundry contribute additional FCF, though cyclicality impacts consistency. Samsung’s $100B net cash position enhances financial flexibility.

Value Chain Position

Samsung operates across multiple stages of the technology value chain:

• Upstream: Manufactures memory chips, displays, and application processors, supplying both internal divisions and third parties. This is the most profitable part of the value chain, driven by scale and technological leadership.
• Midstream: Assembles components into finished products (e.g., smartphones, TVs), leveraging in-house components for cost advantages.
• Downstream: Markets and sells branded consumer products, with handsets and TVs as key categories. Downstream activities are less profitable due to competition.

Go-to-Market (GTM) Strategy:

• Components: B2B sales to global OEMs, with long-term contracts and pricing tied to market dynamics. Samsung’s scale and quality ensure stickiness with customers like Apple.
• Handsets: Direct-to-consumer sales through retail channels, supported by heavy marketing to maintain brand strength.
• Consumer Electronics: Broad distribution through retail and e-commerce, with competitive pricing to maintain volume.

Competitive Advantage: Samsung’s value-add lies in its ability to produce leading-edge components at scale, which it leverages for both third-party sales and internal cost advantages. Its vertical integration allows it to capture value across the chain, unlike pure-play competitors.

Customers and Suppliers

• Customers:
• Components: Large tech firms (e.g., Apple, Microsoft, Qualcomm) for memory, displays, and foundry services.
• Handsets: Premium consumer segments, primarily outside China.
• Consumer Electronics: Mass-market consumers, price-sensitive.
• Suppliers:
• Key suppliers include ASML (EUV machines, $170M each), raw material providers (e.g., silicon wafers), and equipment manufacturers. Samsung’s investment in ASML ensures priority access to cutting-edge technology, a critical competitive advantage.
• Supplier power is moderate, as Samsung’s scale allows it to negotiate favorable terms.

Pricing

• Memory: Pricing is cyclical, driven by supply-demand dynamics. Recent declines (DRAM: $3.25 to $1.70; NAND: $0.71 to $0.39) reflect oversupply, but low prices stimulate demand and reduce competitor supply. Samsung’s scale allows it to maintain profitability even in downturns.
• Handsets: Premium pricing for high-end models, supported by brand strength and hardware innovation (e.g., foldable displays). Prices are stable, with margins protected by in-house components.
• Displays: Pricing is stable, with premiums for advanced technologies like OLED. Long-term contracts with OEMs ensure visibility.
• Consumer Electronics: Competitive pricing due to commoditization, with thin margins.
• Foundry: Contract-based pricing, competitive with TSMC but supported by leading-edge technology.

Pricing Drivers:

• Industry Fundamentals: Cyclical supply-demand dynamics dominate memory pricing.
• Differentiation: Technological leadership (e.g., smaller chips, foldable displays) commands premiums.
• Customer Type: Large OEMs have moderate bargaining power, but Samsung’s scale mitigates this.
• Mission-Criticality: Memory and displays are critical components, reducing price sensitivity.

Bottoms-Up Drivers

Revenue Model and Drivers

Samsung’s revenue model varies by segment:

• Memory: Revenue = Volume (8-gigabit chips) × Price. Volume growth is robust (23% DRAM, 37% NAND CAGR), driven by demand from smartphones, servers, and emerging applications (e.g., AI, autonomous vehicles). Pricing is volatile, with downturns reducing revenue but stimulating demand long-term.
• Handsets: Revenue = Units Sold × ASP (average selling price). The market is mature, with stable units and ASPs. Refresh cycles (e.g., AI-driven upgrades) can boost volumes periodically.
• Displays: Revenue = Units Sold × ASP. Demand is tied to device refresh cycles, with stable pricing due to technological differentiation.
• Consumer Electronics: High-volume, low-ASP sales, with revenue driven by market share in commoditized categories.
• Foundry: Revenue = Contract Value × Volume. Growth is driven by capacity expansion and demand for leading-edge chips.

Key Revenue Drivers:

• Volume: End-market growth (e.g., AI servers, autonomous vehicles) drives memory and display volumes. Handset volumes are stable, with refresh cycles as catalysts.
• Pricing: Cyclical for memory, stable for handsets and displays. Technological leadership supports premiums.
• Mix: Shifting toward components (memory, foundry) as handsets mature.
• Organic Growth: Driven by capacity expansion and technological innovation. Inorganic growth is minimal.

Cost Structure and Drivers

Samsung’s cost structure is characterized by high fixed costs and moderate variable costs, creating significant operating leverage:

• Variable Costs:
• Memory: Raw materials (e.g., silicon), labor, and energy. Variable costs are ~60-65% of revenue at cycle troughs, lower at peaks due to scale.
• Handsets: Components (partially in-house), assembly, and logistics. Variable costs are ~70% of revenue, mitigated by vertical integration.
• Displays: Materials and labor, ~60% of revenue.
• Consumer Electronics: High variable costs (~80% of revenue) due to commoditization.
• Foundry: Materials and labor, ~65% of revenue.
• Fixed Costs:
• Memory and Foundry: Massive capex ($25B annually, including $170M EUV machines), R&D, and facility costs. Fixed costs are ~30-35% of revenue, creating high operating leverage.
• Handsets: Marketing, R&D, and distribution. Fixed costs are ~20% of revenue.
• Displays: R&D and manufacturing facilities, ~25% of revenue.
• Consumer Electronics: Marketing and distribution, ~15% of revenue.
• Contribution Margin:
• Memory: 35-40% at peaks, 5-10% at troughs.
• Handsets: ~25-30%, stable.
• Displays: ~30%, consistent.
• Consumer Electronics: ~5-10%, low due to competition.
• Foundry: ~25%, growing with scale.
• Gross Margin: Blended gross margin is ~30-35%, driven by high-margin components.
• EBITDA Margin: Varies by cycle, ~15-25% normalized, with memory as the primary driver. Margin expansion occurs as fixed costs are spread over higher volumes.

Cost Drivers:

• Economies of Scale: Large-scale manufacturing reduces per-unit costs, particularly in memory and foundry.
• Operating Leverage: High fixed costs (e.g., EUV machines, factories) amplify profitability as volumes rise.
• Inflation: Impacts raw materials and labor but mitigated by scale and long-term supplier contracts.
• R&D: Significant investment in leading-edge technology ensures competitiveness but adds to fixed costs.

FCF Drivers

• Net Income: Driven by EBITDA, adjusted for taxes and interest. Samsung’s low tax rate (~20%) supports net income.
• Capex: $25B annually, split between memory ($12B), foundry (~$13B), and other segments. Maintenance capex is ~40% of total, with the rest for growth (e.g., EUV capacity).
• Net Working Capital (NWC): Moderate NWC cycles due to inventory and receivables management. Cash conversion cycle is efficient (~30-40 days), reflecting strong operational discipline.
• FCF: ~$10B from handsets, with additional contributions from memory and foundry. FCF is cyclical but supported by $100B net cash, enabling investment through downturns.

Capital Deployment

• Capex: Focused on memory and foundry capacity, with $25B annually to maintain technological leadership. Investments in EUV machines ensure long-term competitiveness.
• M&A: Limited, as Samsung’s scale reduces the need for acquisitions. Historical acquisitions (e.g., memory business by KH Lee) were transformative but rare.
• Buybacks/Dividends: Conservative, prioritizing reinvestment over shareholder returns. Excess cash is retained for strategic flexibility.

Market, Competitive Landscape, and Strategy

Market Size and Growth

• Memory Semiconductors:
• Size: ~$100B (DRAM) and ~$80B (NAND) globally.
• Growth: 23% CAGR (DRAM volume), 37% CAGR (NAND volume), driven by AI, autonomous vehicles, and IoT. Price declines in downturns offset volume growth, but long-term value growth is robust (~10-15% annually).
• Mobile Handsets:
• Size: ~$400B globally.
• Growth: Mature market with ~0-2% volume growth, driven by refresh cycles. Value growth is ~3-5% due to premiumization.
• Display Panels:
• Size: ~$50B globally.
• Growth: ~5-7% annually, tied to device refresh cycles and OLED adoption.
• Consumer Electronics:
• Size: ~$300B globally.
• Growth: ~2-3% annually, commoditized with limited pricing power.
• Foundry:
• Size: ~$100B globally.
• Growth: ~15-20% annually, driven by demand for leading-edge chips.

Industry Growth Stack:

• Population growth (~1%)
• Real GDP growth (~2-3%)
• Inflation (~2-3%)
• Technology adoption (AI, IoT, autonomous vehicles: ~10-20%)

Market Structure

• Memory:
• DRAM: Oligopoly with three players (Samsung: 43%, SK Hynix: 27%, Micron: 23%). High barriers to entry (capital intensity, technological expertise) limit competition.
• NAND: More fragmented (Samsung: 33%, KIOXIA: 20%, SK Hynix: 18%, Western Digital: 13%, Micron: 10%). Lower capital intensity allows more competitors, but Samsung’s scale ensures profitability.
• Handsets: Duopoly at the premium end (Samsung, Apple), with Chinese manufacturers (e.g., Huawei) competing in lower tiers. High barriers (brand, manufacturing capacity) protect the profit pool.
• Displays: Oligopoly (Samsung, LG Display, BOE), with Samsung leading in OLED. Technological differentiation drives profitability.
• Consumer Electronics: Fragmented, with intense price competition. Samsung’s brand provides modest differentiation.
• Foundry: Duopoly (TSMC, Samsung), with TSMC dominant. Samsung’s 20% growth rate signals potential to close the gap.

Industry Dynamics:

• Cyclicality: Memory is highly cyclical due to capacity additions and demand fluctuations. Handsets and displays are less cyclical, while consumer electronics are stable but low-margin.
• Regulation: Geopolitical restrictions (e.g., U.S. ban on EUV sales to China) protect Samsung’s technological lead but encourage Chinese investment in semiconductors.
• MES (Minimum Efficient Scale): Large MES in memory and foundry (due to $170M EUV machines and $25B capex) limits competitors. Smaller MES in consumer electronics allows fragmentation.

Competitive Positioning

Samsung’s positioning is defined by:

• Technological Leadership: Leading-edge chips, foldable displays, and camera sensors differentiate Samsung in memory, displays, and handsets.
• Scale: $25B capex and $100B net cash enable investment through downturns, unlike competitors (SK Hynix, Micron).
• Vertical Integration: In-house components reduce costs and enhance handset competitiveness.
• Brand: Top-five global brand (per Interbrand) supports premium pricing in handsets and consumer electronics.

Risks:

• Technology: Competitors (e.g., SK Hynix in HBM) could temporarily leapfrog Samsung, though catch-up is rapid (e.g., HBM capacity ramp-up in 2024).
• Subsidies: Chinese government support for local semiconductor firms could disrupt NAND at the low end.
• Geopolitics: U.S.-China tensions impact supply chains and market access.

Market Share and Relative Growth

• Memory: Samsung’s 43% (DRAM) and 33% (NAND) shares are stable, with potential for gains as competitors cut capex. Growth exceeds market averages due to scale and technology.
• Handsets: 26% share outside China, stable but slower than market growth (~3-5%).
• Displays: Leading share in OLED, growing in line with market (~5-7%).
• Foundry: Small but growing faster than market (20% vs. 15-20%), gaining share from TSMC.

Competitive Forces (Hamilton’s 7 Powers)

1. Economies of Scale: Samsung’s $25B capex and large-scale manufacturing reduce per-unit costs, enabling profitability even in downturns. Competitors like SK Hynix and Micron struggle to match this scale.
2. Network Effects: Limited in Samsung’s businesses, as components and handsets lack platform dynamics.
3. Branding: Samsung’s top-five global brand supports premium pricing in handsets and consumer electronics, though less relevant for components.
4. Counter-Positioning: Samsung’s vertical integration creates a superior business model, as competitors cannot replicate its combination of component manufacturing and branded products.
5. Cornered Resource: Access to EUV machines (via ASML investment) and proprietary manufacturing know-how provide a technological edge.
6. Process Power: Samsung’s ability to optimize yields on complex EUV machines enhances efficiency and profitability.
7. Switching Costs: Moderate in components (due to long-term contracts) and handsets (due to brand loyalty), but low in consumer electronics.

Porter’s Five Forces:

• New Entrants: High barriers (capital, technology, scale) in memory, foundry, and displays; moderate in handsets; low in consumer electronics.
• Substitutes: Limited substitutes for DRAM/NAND and OLED displays; handsets face competition from Chinese brands; consumer electronics are commoditized.
• Supplier Power: Moderate, as ASML’s EUV monopoly is offset by Samsung’s scale and investment in ASML.
• Buyer Power: Large OEMs (e.g., Apple) have some leverage, but Samsung’s technological lead reduces price sensitivity.
• Rivalry: Intense in memory (cyclical pricing), moderate in handsets (duopoly), and high in consumer electronics (price-driven).

Strategic Logic

• Capex Cycle Bets: Samsung’s $25B annual capex, sustained through downturns, ensures technological leadership. Investments in EUV machines position it for market share gains and higher margins post-downturn.
• Economies of Scale: Samsung operates at MES in memory and foundry, maximizing efficiency. Diseconomies of scale are avoided through focused investments.
• Vertical Integration: Reduces costs and enhances handset competitiveness, though it complicates foundry growth due to competitive dynamics (e.g., Apple’s reluctance to use Samsung’s foundry).
• Horizontal Expansion: The foundry business (20% growth) represents adjacency expansion, leveraging existing manufacturing expertise.
• Geographic Expansion: Global presence, with limited exposure to China in handsets but strong component sales worldwide.

Valuation

Samsung trades at 7x pretax profits or 9x earnings on a normalized basis, significantly below the market multiple (16.7x P/E for average businesses). This reflects:

• Cyclicality: Memory’s volatility deters some investors.
• Corporate Governance: Chaebol structure and family control raise concerns.
• Market Access: Lack of an ADR and South Korean trading restrictions limit investor participation.
• Myopia: Technology investors prefer non-cyclical growth stocks (e.g., NVIDIA) at higher multiples.

Fair Value: Given Samsung’s above-average characteristics (dominant market position, 10-15% secular growth in memory, high ROIC), a fair P/E multiple would be ~12-15x normalized earnings, implying significant upside. An ADR could narrow the valuation gap by improving accessibility.

Risks:

• Technology: Temporary leaps by competitors (e.g., SK Hynix in HBM) could erode share, though Samsung’s scale ensures rapid catch-up.
• Geopolitical: Chinese subsidies or U.S. restrictions could disrupt markets.
• Governance: Family control and chaebol structure may deter investors.

Key Takeaways and Unique Dynamics

1. Vertical Integration as a Competitive Moat: Samsung’s ability to manufacture leading-edge components (memory, displays, processors) and integrate them into branded products creates a unique business model. This reduces costs, enhances handset competitiveness, and generates high-margin third-party sales, unlike traditional consumer electronics firms.
2. Component-Driven Profitability: Despite its consumer brand, 70% of profits come from components (memory: 55%, displays: 14%, foundry: 10%). Memory’s cyclicality is offset by scale and financial conservatism, ensuring profitability even in downturns.
3. Capital Intensity and Financial Conservatism: Samsung’s $25B capex and $100B net cash enable investment through cycles, a strategy pioneered by KH Lee. This allows it to outspend competitors (SK Hynix, Micron) and gain share via leading-edge technology (e.g., EUV machines).
4. Handset Stability: The handset business generates ~$10B in FCF, acting as a cash cow to fund component investments. Its 26% market share outside China is protected by limited manufacturing capacity for premium devices, creating a duopoly with Apple.
5. Foundry Growth Potential: The foundry business, though only 10% of profits, grows at 20% annually and could become a significant driver, leveraging Samsung’s manufacturing expertise to challenge TSMC.
6. Cyclical Resilience: Samsung’s scale and diversified revenue streams (handsets, displays) mitigate memory’s cyclicality, ensuring consistent FCF and investment capacity.
7. Geopolitical and Governance Considerations: South Korea’s chaebol structure and trading restrictions contribute to a valuation discount, but political shifts toward shareholder-friendly policies could unlock value.

Unique Dynamics:

• Manufacturing Scale: Samsung’s ability to operate at MES in memory and foundry creates a cost advantage that competitors cannot match.
• Technological Leadership: Investments in EUV and foldable displays ensure Samsung remains at the industry’s forefront, driving margins and share gains.
• Profit Pool Protection: Limited foundry capacity (Samsung, TSMC) restricts competition in premium handsets, securing Samsung’s profit pool.
• Contrarian Capital Allocation: Overcapitalization, viewed as inefficient by some, enables strategic investments in downturns, a lesson applicable to other capital-intensive industries.

This analysis highlights Samsung’s unique position as a vertically integrated technology leader, with a business model that balances cyclical components with stable consumer businesses. Its scale, financial conservatism, and technological prowess create a defensible moat, positioning it for sustained growth and potential valuation upside.

Transcript