UMS Holdings

[amperex]

barneyonline says

5. I also did a predictive analytics on a couple of things which may not be true to most people. But there could be a financial crisis in 2017, around 10 years after a financial crisis (Global Financial Crisis on 2007), and another 20 years after a financial crisis (Asian Financial Crisis 1997). Of course, this may not be true. But who knows, a crisis usually happens when everyone is overly optimistic. I still choose to believe the increase of the share prices for most stock has reached its end.

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Not trying to be funny, but what's the point of predicting crisis correctly. Even if you are right 3 times in 20 years, it is nothing to crow about.
My dead clock is right twice a day. It never makes me any money. Most important thing is to make money and not to predict crisis.
Many people crowd around casino tables every night predicting big or small but never wager anything. They never make any money while
predicting correctly many times a night.

[barneyonline]

barneyonline says

5. I also did a predictive analytics on a couple of things which may not be true to most people. But there could be a financial crisis in 2017, around 10 years after a financial crisis (Global Financial Crisis on 2007), and another 20 years after a financial crisis (Asian Financial Crisis 1997). Of course, this may not be true. But who knows, a crisis usually happens when everyone is overly optimistic. I still choose to believe the increase of the share prices for most stock has reached its end.

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Not trying to be funny, but what's the point of predicting crisis correctly. Even if you are right 3 times in 20 years, it is nothing to crow about.
My dead clock is right twice a day. It never makes me any money. Most important thing is to make money and not to predict crisis.
Many people crowd around casino tables every night predicting big or small but never wager anything. They never make any money while
predicting correctly many times a night.

Hi amperex,

Perhaps you are new. You can buy and hold your shares at this price and you will understand soon enough Lets take the recent global financial crisis as an example, 2007-2008. You can google UMS holdings share price and check out its trend during that period. So what is the point of predicting crisis correctly? Errr...? Sell you shares before it drops? If you would want to know what is the meaning of dropping... see the current noble group share price You can also short sell?? You can go read up what is short sell. From the way you write it, you seems to be gambling. Good luck in gambling I am sure you would be correct.

[barneyonline]

Hi barneyonline,
True, over the past 5~7 years, MM has been growing while UMS stays near flat, but past performances are not indicative of future performances.
If you trust the management guidance below, it means back to GROWTH path again for UMS. Andy is bullish.

It would be interesting to track both performances of MM and UMS going forward. Let the race begin.............
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Outlook
The demand for semiconductor is on a rapid rise, fuelled by the boom in disruptive technology and continuous push for automation and innovation. The largest growth drivers for the industry are mobile devices (including devices using solid state drives), automotive and IoT (Internet of Things).

According to Semiconductor Equipment & Materials International (SEMI), worldwide sales of semiconductor manufacturing equipment totalled US$41.24 billion in 2016, representing a year-on- year increase of 13%. Fab equipment spending is also expected to reach an industry all-time record of more than US$46 billion in 2017. The value is expected to climb higher in 2018, with spending hitting near the US$50 billion mark.

These buoyant trends augur well for UMS which is well-poised to ride on the growth as it will be stepping up plans to expand production capacity, including a ramp-up in fab activities in the coming months. The group intends to invest a further RM80 million in Penang over the next few years which include building new cleanrooms, take advantage of a larger pool of talent and a more favorable tax status.

Mr Andy Luong, Chief Executive Officer of UMS Holdings, said: “The outlook continues to be positive for the global semiconductor sector which has enabled the Group to accelerate its growth trajectory in both revenue and profit. UMS intends to continue rewarding shareholders with good dividends and has hence proposed an interim tax-exempt dividend of 1 cent to be payable on 27 July, 2017.

“We have also adopted a diversification strategy to broaden our revenue base and income streams as well as to lower exposure risks to any single source or market. Going forward, we will continue to drive growth in the existing semiconductor business segment while pursuing business opportunities in potential growth areas relating to the provision of water and chemical engineering solutions.”

UMS had acquired in March a 51% stake in Kalf Engineering, a company that specialises in water and chemical engineering solutions for the offshore, power generation and chemical industries. Kalf has currently in hand seven projects in Asia, the Middle East and South America worth approximately S$13 million, and is also in the midst of procuring additional projects.

Five of the current projects are expected to be completed in the second half of 2017 with another two in China and Middle East expected to be completed in the second half of 2018. The five projects, scheduled for completion this year, will be expected to contribute to the Group’s financial performance in FY2017. 
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Hi Boon,

What you stated above can be considered positive to a certain extend. Firstly, the above is labelled as "outlook". Meaning, it may not materialize, UMS may not benefit from it, new business may not be profitable. The 13 million profit is nice. But comparing it to its previous past annual revenues, it is not substantial although I recognize its effort in diversification. 

We are stakeholders, and Andy as the CEO will try to give us a good reporting. So there is a conflict of interest in the reporting. Meaning, all CEOs will try to sugar code their financial statements during presentation. Some will release a better Q1 results since it is near their annual general meeting (backdate from previous year and advance date from Q3-Q4). For example, potential earnings from Q4 2016, Q2 2017 are put in Q1 2017 instead of the correct dates. Hence, what we need to see are annual earnings and only quarters that is not near annual general meeting.

Bear in mind, it is easy for 5 projects to be completed. But whether or not they are profitable is a different issue.

If UMS holdings is indeed doing well, why is the CEO not buying back shares? There is no changes in shares. The price is peaking. I believe you will see the CEO selling the shares again during May-Jun. The reason is not because the company is dying, but the price is really overvalued. You can reference this back to year 2014.  I could be wrong. We can stick around and see. But I am getting out of this. I am not a risk taker. Wanted to sell at S$0.99 but the price closed at S$0.97 yesterday. Today need to try sell out again.. maybe at S$0.98

[barneyonline]

I would like to let everyone know that the growth of Semiconductor industry has already been considered in the current UMS holdings pricing. If not, it would not have jumped from S$0.62 to S$0.99. Using multiple indicators (e.g. fundamentals, technical, general charting, potential 10 year financial crisis)
, it all points out that the price will drop soon.

Of course I could be wrong like many of the people believe so. But bear in mind the reason for a financial crisis is always due to a over optimistic market

Just because everyone believe human can never be in the skies, it doesn't mean it is true.

[barneyonline]

In summary, the CEO and management may say how good UMS holdings is. But that is something that cannot be measured quantitatively. My question is this. Ok, great, UMS holdings seems to be doing well and going the right direction. So, how many shares has the CEO or management purchased? From my understanding is nil after a "positive" Q1 reporting.

[Bibi]

Of course I could be wrong like many of the people believe so. But bear in mind the reason for a financial crisis is always due to a over optimistic market

Just because everyone believe human can never be in the skies, it doesn't mean it is true.

I do not think the current STI index price or spore stock market is overly optimistic. Prior to all STI crashes, PE are usually in the range 25 to 30. The current STI PE I think is around 13 to 14.
The overvalued markets are the Dow, S&P and Nasdaq and the fear is the crashes over there will affect our STI.

[YMPL]

I agree with Bibi that the STI index price is not overly optimistic. What else indicators beside the PE, as highlighted by Bibi? The recent wave of privatization is a strong support of the thesis.

Back to UMS, the recent hike in price was due to the renewal of contract with AMAT. The previous valuation was based on termination of the contract. It is at fair value now, IMHO.

[barneyonline]

Perhaps you all are correct

[Boon]

Buckle Up for Record Spending in 2017 and 2018
Unprecedented spending for fab equipment expected
http://www.semi.org/en/buckle-record-spe...7-and-2018
 
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“According to Semiconductor Equipment & Materials International (SEMI), worldwide sales of semiconductor manufacturing equipment totalled US$41.24 billion in 2016, representing a year-on- year increase of 13%. Fab equipment spending is also expected to reach an industry all-time record of more than US$46 billion in 2017. The value is expected to climb higher in 2018, with spending hitting near the US$50 billion mark. 

These buoyant trends augur well for UMS which is well-poised to ride on the growth as it will be stepping up plans to expand production capacity, including a ramp-up in fab activities in the coming months.”
__________________________________________________________________________________________
 
@ barneyonline,
 
It seems to me that you are looking for excuses to sell your stakes
a)   UMS may not benefit
b)  New business may not be profitable
c)   CEO sugar coat financial statements
d)  CEO is not buying shares
e)   CEO is going to sell shares because it is overvalued
f)    The price is peaking
g)   Financial crisis
 
1) Is UMS going to benefit ?
The pie of Fab equipment market segment is getting bigger.
There are only a few key players in this market segment of the semiconductor industry – an oligopolistic situation indeed.
The pie could only be shared among these few players, if they are not the ones that would benefit from the current “boom”, who would?
AMAT is the top key player and would definitely benefit from it.
Being AMAT’s supplier, UMS would benefit from it as well – this is exactly what Andy is trying to say……………………….
UMS has benefitted from this buoyant trend as evidenced from its 1Q2017 results and would benefit further going forward, IMO.
Without a full understanding of the fab equipment market including various fabrication processes like lithography, deposition (PVD, etc), etching etc, it would be hard for one to grasp the true implications of 1) , IMO.
 
2) Would Kalf Engineering going to be profitable?
7 projects worth SGD 13 m
5 projects would contribute to FY2017 performance.
Revenue contribution in FY2017 ~ 51% x 13 x 5 / 7 = 5 m
Profit contribution, assuming NPM of 20%, = 1 m
Small contribution but nevertheless a good start.
I am pretty sure it would be profitable, - Andy is only interested in high margin business venture.
 
3) “Conflict of interest in the reporting” – what are you talking about?
 
“We are stakeholders, and Andy as the CEO will try to give us a good reporting. So there is a conflict of interest in the reporting”
 
Andy is the CEO and the biggest stakeholder.
Good or bad, as an CEO, he has the obligation to give shareholders an “accurate report” reflective of the market conditions and outlooks. It is neither in his interests nor shareholders interrests to do otherwise (mislead shareholders).
 
“Conflict of interest in the reporting” – what are you talking about?
 
Are you saying it is in Andy’s interests to “mislead” shareholders by giving an inaccurate report?
 
4) Insiders buying/selling:
 
Market mentality:
Insider buying ó undervalued
Insider selling ó overvalued
 
Looking at Andy’s past shares buying/selling activities, how accurate and useful has this “market mentality” been as a mean of determining the fair value of UMS shares ?
 
Not userful and not accurate, IMO.
 
5) Overvalued, undervalued or fair valued?
There are many value metrics avalilable for carrying out further analysis based on price and fundamentals of UMS.
Price is determined by Mr. Market.
Full understanding of 1) & 2) and their implications would be most critical in determining the true fundamentals of UMS.
 
To sell or not to sell, ultimately it’s your call.
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[barneyonline]

Seems likes you all are right

So how much do you all think I should hold until? S$1.5? Any advice?