UMS Holdings

hi Nick,


Thanks for the reply.

What i meant is how did you know that Applied Materials is the biggest customer for UMS Holdings?

Sorry for this novice question.

Many thanks & Regards

(16-07-2012, 02:47 PM)investmentjourney Wrote: hi Nick,


Thanks for the reply.

What i meant is how did you know that Applied Materials is the biggest customer for UMS Holdings?

Sorry for this novice question.

Many thanks & Regards

I think it been mentioned in the past interviews, press release and hinted in the annual reports that Applied Materials is a major customer for the Group. The analyst reports (available in UMS website) also states that Applied Materials is a major customer.

The most recent evidence can be found in the IMT Group M&A Circular dated 12 Jan 2012 where in pg 8-9, it mentioned:

Quote:(a) Provision of vacuum welding and tube bending services by IMT-S and IMT-USA

Both IMT-S and IMT-USA provide vacuum welding and tube bending services to the Group. Although vacuum welding and tube bending services are necessary to the Group’s business, the Group is not qualified to supply such services to its major customer, Applied Materials, Inc., based on its major customer’s certification processes. The Group’s major customer has accredited IMT-S and IMT-USA for what it calls “orbital welding” and what the Company refers to as vacuum welding and tube bending. Only vendors who are accredited to perform orbital welding can supply such services in the manufacturing of products that the major customer buys. Each of IMT-S and IMT-USA possess the necessary accreditation to supply such services to the Group’s major customer and are on a short list of companies which the major customer considers qualified to perform such services. As such, the Group has been entering into various transactions with IMT-S and IMT-USA in connection with the provision of vacuum welding and tube bending services, and the size of transactions with IMT-S and IMTUSA has increased in proportion to the Group’s integrated systems business.

Based on the FY 2011 AR, a certain major customer accounted for 87% of the Group revenue and this is none other than Applied Materials.

(Vested)

Nick,


Many thanks for your kind reply.


Best Regards

There is a (slightly more than) half page article in Business Times today on UMS Holdings (Company insights). The director seems to be hinting a push towards Oil & Gas precision engineering, though i dont seem to have seen any of that in the company filings. Seem to say that Applied materials will be increasing their presence in Singapore.
He didnt mention anything about him selling shares though. lol.

i remember they announced some investment in a US clean-tech company last year. No news after that, wondered what happened to it. Dont seem to be in the annual report either.

Any opinion? Dividend yield (if sustainable) seems high. Even 4cents a year, also gives >10% yield. Although semicon earnings have been poor this quarter, companies dont seem to have reduced their capex.

(23-07-2012, 10:38 AM)l0nEr Wrote: There is a (slightly more than) half page article in Business Times today on UMS Holdings (Company insights). The director seems to be hinting a push towards Oil & Gas precision engineering, though i dont seem to have seen any of that in the company filings. Seem to say that Applied materials will be increasing their presence in Singapore.
He didnt mention anything about him selling shares though. lol.

i remember they announced some investment in a US clean-tech company last year. No news after that, wondered what happened to it. Dont seem to be in the annual report either.

Any opinion? Dividend yield (if sustainable) seems high. Even 4cents a year, also gives >10% yield. Although semicon earnings have been poor this quarter, companies dont seem to have reduced their capex.

The CEM division (dealing in O&G and Aerospace) has been relatively quiet over the past 3 years with little growth. In FY 2006, they invested US$20 million to construct a 80,000 sq feet facility in Changi to manufacture precision parts for the Aerospace and O&G industry. But somehow, since 2008, the focus has changed towards supplying Applied Materials and this division remained relatively quiet. Perhaps, they intend to kick-start their CEM division again hmm ??? In UMS case, diversification will be great as it is too dependent on Applied Materials for their revenue. The recent weakness by AM may impact UMS profits this year.

AR 2011:

Quote:Contributions from CEM segment decline as the Group continues to streamline its oil and gas products with an emphasis on profitability. With the expiry of its exclusive manufacturing arrangement with a major global oil & gas company in March 2012, the Group is now open to expand its oil and gas client base over the next few years. Going forward, UMS is confident that contributions from the CEM segment will form a significant portion of its total revenue.

The investment in the US cleantech company (Terra Verde) is an opportunistic one with a proposed US$1 million investment to be paid over 4 tranches. I don't expect anything much from this - if anything positive pops up, I will treat it as a bonus !

Wow Think i have to pay more attention when reading the annual report. Guess have to look at Q2 results to see if there are any improvements in the CEM division.

Yep, the investment is small, but it didnt seem to appear in the financial statements at all. Was just wondering what happened to it.

Thanks!

My quick assessment on UMS is that one should look out for the geographical segment. As Singapore accounts of the majority of the revenue, this means UMS mainly serves Applied Materials in Singapore as it is probably the one of few certified precision engineering companies that Applied Material have qualified. In that case, one should know about the semicon industry outlook in Singapore. If you ask around, one will know that Globalfoundaries is the only company in Singapore that has 45nm technology and they have been not profitable. The profitable ones are mainly 0.13um technology (which are technology since 1990) using 8 inch wafers. Eventually such technology will phase out (definitely in 10 years time) as 12 inch wafer will provide more $ per wafer. So back to the main point, if one invest in UMS thinking it will be long term dividend generating cashcow, then one should be especially careful and aware of the electronics development of Singapore.

Maybe thats why the CEO reduced his stake and want to increase exposure in O&G or aerospace.

Be careful of the goodwill also!

Not Vested

I am in the semicon sector..

Give u all a warning..
Semicon sector is in RECESSION now...

No bonus for my company next financial year...
No booking orders from Global Foundries this year..
Activity is very quiet...

Only 1 good news..

450mm fabs will start soon but probably in USA..
[/align]

(24-07-2012, 12:24 PM)Zelphon Wrote: I am in the semicon sector..

Give u all a warning..
Semicon sector is in RECESSION now...

No bonus for my company next financial year...
No booking orders from Global Foundries this year..
Activity is very quiet...

Only 1 good news..

450mm fabs will start soon but probably in USA..
[/align]

Semiconductor industry set to grow
By Pamela Koh | Posted: 23 April 2012

SINGAPORE: After a number of setbacks last year, the semiconductor industry is starting to look up.

The industry's wafer fabrication capacity is expected to grow by 11 per cent in Southeast Asia this year.

This is more than double that of the global capacity growth rate of five per cent.

Positive demand in the electronics sector, in particular mobile devices, has driven growth in the semiconductor industry.

A report by industry body SEMI said it expects growth to be modest at between three and nine per cent for 2012.

This came after the industry posted slower growth of 1.6 per cent in global revenue for semiconductor in 2011, down from 30 per cent growth in 2010.

... more detail, please go the link ...

http://www.channelnewsasia.com/stories/s...07/1/.html

(24-07-2012, 12:24 PM)Zelphon Wrote: I am in the semicon sector..

Give u all a warning..
Semicon sector is in RECESSION now...

No bonus for my company next financial year...
No booking orders from Global Foundries this year..
Activity is very quiet...

Only 1 good news..

450mm fabs will start soon but probably in USA..

On hindsight...

Sad to say, but the best years for Semicon is already over. That was in the early 90s when demand far out-stripped supply. Set makers have to literally beg their suppliers for allocations (mainly Memory Devices) back then.

What happened after that was rapid expansion by all the Chip Makers, US, European, Japanese, Koreans, Taiwanese, Singapore, China, Malaysia,.. did I miss out any?

With the massive new supply coming online year after year, supply now out-strips demand.. by a huge margin. Even the subsequent (plus regular) consolidation (most Japanese ones had merged) in the industry doesn't seem to have made a huge dent to the supply (don't think they retired that many Fabs).

So, nowadays, I see long low cycles and very short upcycles. Only the best or niche ones stays profitable more often than losses.. I gave up for now, am not good enough to find such companies.. Perhaps at best, try to ride part of the upcycle when it's so obviously staring in my face..