UMS Holdings

(11-06-2014, 01:04 AM)NTL Wrote:

(11-06-2014, 12:39 AM)specuvestor Wrote: ^^^ u have echoed my thoughts previously

Discussions in this thread has generally been pretty constructive. Allow me to answer my own question on what possibly has changed:

1) contract will not be renewed in 2017 and volume will be scaling down next 3 years.

2) merger with Tokyo electron provides a new supplier

3) model transitions,may or may not be related to 18" migration

Actually there is precedent of major shareholder and CEO selling a very successful company at a very wrong time: ASM Pacific (522 HK). The diff is however ASMI parent did not sell.

However, why will the volume be scale down in next 3yrs? The new supplier is not ready yet.

Hi Specuvestor,

What is your rationale for thinking that volume would be scaled down over the next 3 years?

According to Maybank KE, AMAT gives UMS a fixed percentage allocation (~80%) of its annual requirements at a fixed margin.

(vested)

^^ Hi Boon just to let u know I have high regards for you. You are at least twice hardworking than I am

Let this old man tell a story There was this O&G company that makes stuff for the oil majors with proprietory tech. I asked them if they have IP on it and they said no. I sniggered and said whats the point then but they gave a very good reason: What would you do if the oil majors infringe your IP? You gonna sue your major clients with tonnes of cash that can drown you? There are not many Rambus Inc around

This is an example of Porter's 5 forces -power of buyers/customers. Back in 2008 when BDIY went heywire all contracts were worthless paper. All that matters was trust and quid pro quo.

The 3 reasons I quoted is what IMHO is likely catalyst for volume to scale down. I could be totally wrong but I'm just inferring from what the major shareholders are thinking with their actions. Even if I am right it will be more than 6 months to prove ie I don't even think the next 2 quarters results will be affected

I think it was Nick who said the timing of the sale is interesting: we will not know how much AMAT sold until the next AR 3 quarters later

True that there are many reasons for selling but only one for buying But there is also a difference between a CEO selling and a business owner selling. And also for that matter a major customer selling. Now we have both.

Think we all need to have our own rough idea when is it good value and most important it is a level that we will not be "ai-wan" about if the stock does bounce

(12-06-2014, 10:00 AM)CityFarmer Wrote: What is the TP? I will post it once I have the answer, AND after I have bought enough

Since no tips from Cityfarmer, chin chai buy some first and ask later.

Incidentally, I was surprised to learn that AMAT still calls its platform Endura. It was also known as Endura 2X years ago, IIRC.

(12-06-2014, 11:33 AM)specuvestor Wrote: ^^ Hi Boon just to let u know I have high regards for you. You are at least twice hardworking then I am



I think it was Nick who said the timing of the sale is interesting: we will not know how much AMAT sold until the next AR 3 quarters later

True that there are many reasons for selling but only one for buying But there is also a difference between a CEO selling and a business owner selling. And also for that matter a major customer selling. Now we have both.

Think we all need to have our own rough idea when is it good value and most important it is a level that we will not be "ai-wan" about if the stock does bounce

Shares are held in Nominee Account so unlikely we will ever find out.

(12-06-2014, 11:34 AM)HitandRun Wrote:

(12-06-2014, 10:00 AM)CityFarmer Wrote: What is the TP? I will post it once I have the answer, AND after I have bought enough

Since no tips from Cityfarmer, chin chai buy some first and ask later.

Incidentally, I was surprised to learn that AMAT still calls its platform Endura. It was also known as Endura 2X years ago, IIRC.

They can keep the names, while changing the "versions". I also still see Toyota Corollas and Honda Accords after so so many years.

For those who are buying the shares, if the counter party that sold UMS shares to you is Morgan Stanley, then it's most likely sold by AMAT. If the counter party is UOB KH, it might be the CEO selling it to you.

I have spoken to their IR. Though they are not able to share any "insider" info or any additional info not discussed here, they are of the view that the company is still in good shape. Its also not easy to remove UMS as their vendor as a lot of biz are some kind of strategic partnership..maybe joint collaboration, etc.

So for those buddies that are holding on, just have to bite the bullet for now till the dust has settled.

Still vested.

(12-06-2014, 02:20 PM)mslee888 Wrote: I have spoken to their IR. Though they are not able to share any "insider" info or any additional info not discussed here, they are of the view that the company is still in good shape. Its also not easy to remove UMS as their vendor as a lot of biz are some kind of strategic partnership..maybe joint collaboration, etc.

So for those buddies that are holding on, just have to bite the bullet for now till the dust has settled.

Still vested.

http://en.wikipedia.org/wiki/Strategic_partnership

A strategic partnership is a formal alliance between two commercial enterprises, usually formalized by one or more business contracts but falls short of forming a legal partnership or, agency, or corporate affiliate relationship.

Typically two companies form a strategic partnership when each possesses one or more business assets that will help the other, but that each respective other does not wish to develop internally.

One common strategic partnership involves one company providing engineering, manufacturing or product development services, partnering with a smaller, entrepreneurial firm or inventor to create a specialized new product. Typically, the larger firm supplies capital, and the necessary product development, marketing, manufacturing, and distribution capabilities, while the smaller firm supplies specialized technical or creative expertise.

Another common strategic partnership involves a supplier / manufacturer partnering with a distributor or wholesale consumer. Rather than approach the transactions between the companies as a simple link in the product or service supply chain, the two companies form a closer relationship where they mutually participate in advertising, marketing, branding, product development, and other business functions. As examples, an automotive manufacturer may form strategic partnerships with its parts suppliers, or a music distributor with record labels.

There can be many advantages to creating strategic partnerships. As Robert M. Grant (2008, p. 44) states in his book Contemporary Strategy Analysis, "For complete strategies, as opposed to individual projects, creating option value means positioning the firm such that a wide array of opportunities become available". Firms taking advantage of strategic partnerships can utilize other company's strengths to make both firms stronger in the long run.

Strategic partnerships raise questions concerning co-inventorship and other intellectual property ownership, technology transfer, exclusivity, competition, hiring away of employees, rights to business opportunities created in the course of the partnership, splitting of profits and expenses, duration and termination of the relationship, and many other business issues. The relationships are often complex as a result, and can be subject to extensive negotiation.

(vested)

(12-06-2014, 02:20 PM)mslee888 Wrote: I have spoken to their IR. Though they are not able to share any "insider" info or any additional info not discussed here, they are of the view that the company is still in good shape. Its also not easy to remove UMS as their vendor as a lot of biz are some kind of strategic partnership..maybe joint collaboration, etc.

So for those buddies that are holding on, just have to bite the bullet for now till the dust has settled.

Still vested.

wat a good IR...

think AMAT will continue working with UMS as long as UMS can provide cheap and good jobs to them.. big corporate will want to have as many suppliers as they could so that the competition can bring down the cost..

1 weakness in UMS is whenever the price goes up, u can see Andy first to sell.. it's good for div play.. the value is there because Andy will keep selling now and then.. if not, I dun think it will trade as such price..

(12-06-2014, 02:20 PM)mslee888 Wrote: I have spoken to their IR. Though they are not able to share any "insider" info or any additional info not discussed here, they are of the view that the company is still in good shape. Its also not easy to remove UMS as their vendor as a lot of biz are some kind of strategic partnership..maybe joint collaboration, etc.

So for those buddies that are holding on, just have to bite the bullet for now till the dust has settled.

Still vested.

I suppose you have to take it with a pinch of salt. You can't expect them to tell you to "run road".
Although I do agree that it is kind of pain to change supplier, especially those that involve precision engineering parts and system integration. To change to a new supplier, it involves recruitment and training of engineers, certifications, migration of processes, generation of documents, linking up both technical teams and lots of teleconferences.

Unless the supplier is simply intolerable....