UMS Holdings

[Boon]

North American Semiconductor Equipment Industry Posts January 2014 Book-to-Bill Ratio of 1.04

SAN JOSE, Calif. — February 20, 2014 — North America-based manufacturers of semiconductor equipment posted $1.28 billion in orders worldwide in January 2014 (three-month average basis) and a book-to-bill ratio of 1.04, according to the January EMDS Book-to-Bill Report published today by SEMI. A book-to-bill of 1.04 means that $104 worth of orders were received for every $100 of product billed for the month.

The three-month average of worldwide bookings in January 2014 was $1.28 billion. The bookings figure is 7.2 percent lower than the final December 2013 level of $1.38 billion, and is 19.1 percent higher than the January 2013 order level of $1.08 billion.

The three-month average of worldwide billings in January 2014 was $1.24 billion. The billings figure is 8.3 percent lower than the final December 2013 level of $1.35 billion, and is 27.9 percent higher than the January 2013 billings level of $968.0 million.

“Both bookings and billings are at values higher than reported one year ago and are good indications of growth in the 2014 equipment market,” said Denny McGuirk, president and CEO of SEMI. “Device makers are investing in 20nm technology and advanced device structures, while leading packaging houses focus their investments on flip chip, wafer-level, and 3-D packaging.”..............................................

http://www.semi.org/en/node/48966?id=highlights

(vested)

[Nick]

Company Update, 25 February 2014
UMS (UMSH SP) Buy (Maintained)
Technology - Semiconductors Target Price: SGD0.84
Market Cap: USD172m Price: SGD0.63

Dividend Proxy To Applied Materials

In view of the strong results from UMS’ key customer as well as the
robust industry outlook, we upgrade our earnings forecast for the
group and expects sterling 4Q results, along with a dividend hike.
Maintain BUY, with our DCF-based TP increased to SGD0.84 (WACC:
11.5%, terminal growth: 0%). At a 11% FY14 yield, UMS is an attractive
dividend proxy to applied materials and semiconductor industry.

 Stellar results and upbeat outlook from Applied Materials. UMS’
dominant customer, Applied Materials (AMAT US, NR) - contributing
>90% of revenue - posted upbeat 1QFY14 results, with USD253m profits
and USD2.2bn revenue (+644.1% and +39.5% y-o-y respectively) that
beat market expectations. AMAT’s Silicon Systems Group (SSG), which
is historically closely correlated with UMS in terms of revenue
performance, led the surprise with strong sales of USD1.5bn, (+53% y-oy).
SSG also registered strong new orders intake of USD1.6bn during the
quarter (15.1% y-o-y). Coupled with AMAT’s guidance for robust revenue
growth of 3-10% q-o-q, SSG and UMS appear to have a healthy growth
trajectory ahead.

 Recovery apparent in semiconductor. In line with expectations, the
worldwide semiconductor industry recovered in 4Q, with 3-month
average bookings surging 38.5% from USD992m in Sept 2013 to a
record USD1.38m in Dec 2013. Also, the 3-month average book-to-bill
ratio improved from 0.97 in Sept 2013 to 1.02 in Dec 2013.

 Raising earnings estimates. In view of the close historical co-relation
between UMS’ revenue and SSG’s sales as well as the bullish industry
outlook, we raise our FY13 and FY14 earnings estimates by 13.8% and
21.3% respectively on expectations of sterling 4QFY13 results.

 Possible yield hike. Given the anticipated sharp improvement in
earnings, we now estimate the group to pay a 6-cent dividend in FY13
and 7 cents in total for FY14. This will translate into attractive yields of
9.5% and 11.1% respectively. The fact that UMS pays quarterly
dividends makes the stock an attractive dividend proxy to AMAT, as well
as the recovering semiconductor industry. [DMG]

(Vested)

[Boon]

Applied Materials and Tokyo Electron Receive CFIUS Clearance for Proposed Combination

February 24, 2014

http://www.appliedmaterials.com/newsroom...ombination

(Vested)

[Drizzt]

the recent share price move can very well be just share price gyrations but could the underlying being that Andy managed to convinced AMAT for more types of products to supply

[heifien91]

Haven't looked at the FY financials yet but great news to those vested. A normal dividend of 2c and special dividends of 1.5c, which is 0.5c more than expected.

SG Value Investor
http://www.sgvalueinvestor.wordpress.com

[Boon]

Comments on 4Q2013 (FY2013) results:

1) The 4Q2013 result exceeded my expectation in terms of revenue, GROSS and NET profit margins – contributed to record breaking net profit of SGD 28.9 million for FY2013..
2) Special dividend of 1.5 cents per share also exceeded my expectation. (FY DPS = 6.5 cents per share)
3) Management foresees strong demand for semiconductor equipment to continue into the new financial year in 2014.
4) For the full year, UMS generated a positive operating cash flow of SGD27.8 million and free cash flow of SGD25.8 million (total FY2013 dividend payout of SGD22.3 million), despite increased working capital had been deployed to support higher business volume in the current and coming quarters
5) Overall, excellent set of results. Moving forwards, potentially, things could get even better for UMS.

Revenue (SGD million）:
1Q2012 = 31.992
2Q2012 = 36.637
3Q2012 = 22.952
4Q2012 = 21.631 (FY2012 = 113.212)
1Q2013 = 27.845
2Q2013 = 32.821
3Q2013 = 25.357
4Q2013 = 34.455 (FY2013 = 120,496)

NPAT (SGD million) :
FY2012 =16.998
1Q2012 = 6.032
2Q2012 = 7.625
3Q2012 = 2.129
4Q2012 = 1.212 (FY2012 = 16.998)
1Q2013 = 5.256
2Q2013 = 7.837
3Q2013 = 4.809
4Q2013 = 10.978 (FY2013 = 28.880)

Gross Profit Margin :
FY2012 = 49%
1Q2012 = 52%
2Q2012 = 49%
3Q2012 = 54%
4Q2012 = 41% (FY2012 = 49%)
1Q2013 = 49%
2Q2013 = 50%
3Q2013 = 53%
4Q2013 = 63% (FY2013 = 54%)

Net Profit Margin :
FY2012 = 15.01%
1Q2012 = 18.85%
2Q2012 = 20.81%
3Q2012 = 9.28%
4Q2012 = 5.60% (FY2012 = 15%)
1Q2013 = 18.88%
2Q2013 = 23.88%
3Q2013 = 19%
4Q2013 = 31.87% (FY2013 = 24%)

Cash & Cash Equivalent (SGD million)
3Q2012 = 33.531 ( debt = 17.735 )
4Q2012 = 32.532 ( debt = 17.238 )
1Q2013 = 28.448 ( debt = 2.035)
2Q2013 = 27.406 ( no debt)
3Q2013 = 30.134 ( no debt)
4Q2013 = 29.236 ( no debt )

(Vested)

[Nick]

UMS DELIVERS RECORD-BREAKING NET PROFIT OF S$28.9 MILLION IN FY2013

Highlights

- Robust demand from customers led Group to report its strongest set of full year results in the Group’s history with net profit jumping 70% to S$28.9 million
- Group proposes final dividend of 2.0 Singapore cents per share and special dividend of 1.5 Singapore cents per share, bringing the total dividend paid and proposed for FY2013 to 6.5 Singapore cents per share
- The Group foresees strong demand for semiconductor equipment to continue into the new financial year in 2014

http://infopub.sgx.com/FileOpen/UMSPress...eID=276832 [Press Release]

http://infopub.sgx.com/FileOpen/UMSPress...eID=276832 [SGX Statement]

Pleased with the 4Q 2013 results and a little surprised by the higher final dividends of 3.50 cents. Results and the outlook are within my expectations - just a few key points that caught my eye:

1) A year ago, there were huge questions raised on the sudden dip of 4Q 2012 gross margins to 41%. Historically, margins were maintained in the 50 - 60% range so that led to speculations of potential prize squeeze. Fortunately, it didn't pan out and gross margins rebounded back to a more 'normal' 54% for FY 2013.

2) As always, the NPAT figure by itself is quite meaningless. There are numerous 'tricks' to boost or reduces its value ie impairment of inventories, depreciation charges, fair value gains/loss, forex etc. This is prevalent in UMS results where the Management do set aside provisions for impairment of inventories. In 2013, UMS reduced its depreciation charges from $10.6 million to $7.8 million due to some assets being fully depreciated. There was a reduction in inventories impairment from $2.4 million to $0.9 million. This helped push the net profit figure to a record high of $28.8 million which is barely above the figures reported in FY 2010. I would use cash-flow or core PBT as a gauge to determine profitability levels instead.

2) The Group continues to be a cash generating monster. The FCF generated for the year was close to $25 million enabling them to repay their debts while paying regular dividends. The Group is now debt-free and sitting on $29 million cash. It requires $24 million to pay 7.00 cents dividend and this can be covered by the FCF. It should be noted that there was tremendous increase in working capital (ie higher inventory) suggesting more jobs in 1H 2014 which squares well with the positive outlook from the Management and Applied Materials.

3) I do wonder whether the low capital expenditure in recent years can be maintained in the future. The PPE has been declining rapidly over the years and they may need to replenish it. It has declined from $86 million in FY 2008 to $43 million in FY 2013. Have to check Management's capex guidance in the upcoming AGM. A rise in capex will curtail UMS dividend paying ability.

4) As mentioned in point 1, this is nowhere near a record breaking year. The true record breaking year was FY 2010.

FY 2010

Revenue: 129 mil
Gross Profit: 72 mil
Semiconductor EBITDA: 44 mil

FY 2013

Revenue: 120 mil
Gross Profit: 65 mil
Semiconductor EBITDA: 39 mil

It must be noted that UMS did not enjoy contributions from the IMT Group in FY 2010 as it was yet to be acquired. This is not surprising as FY 2010 was the last time the industry enjoyed a book to bill ratio exceeding 1.0 for nearly the entire year (primarily due to low capex in FY 2009). Subsequent years in FY 2011 and FY 2012 was marked by a strong 1H and a weak 2H. The same applied to FY 2013 which started with a weak 1H before strengthening in 2H. FY 2014 seems to have started well with bill to book ratios exceeding 1.0. If it can maintain this level of industrial activity for the rest of the year, it is likely FY 2014 results will be spectacular.

5) Lastly, the CEM division continues to shrink. It does seem that diversification will not be in the works organically. Personally, I don't mind a concentrated company doing what it does best. I guess only a M&A can kickstart this division ?

(Vested)

[Nick]

Results Review, 1 March 2014
UMS (UMSH SP) Buy (Maintained)
Technology - Semiconductors Target Price: SGD0.88
Market Cap: USD178m Price: SGD0.66

UMS’s 4Q13 results topped our raised expectations, with SGD11.0m
profits (+805.8% y-o-y) on the back of SGD34.5m revenue (+59.3% y-oy).
Going forward, FY14 looks to be a bright year for the semiconductor
industry. Trading at a 7.2x FY14 P/E, UMS offers an extremely attractive
forward yield of 10.7%. Maintain BUY, with our DCF-based TP raised to
SGD0.88 (WACC: 12.4%, terminal growth: 0%).

 The best results ever. UMS’ FY13 SGD28.9m profit (+69.9% y-o-y) and
SGD120.5m revenue (+6.4% y-o-y) are the best ever in its history.
These were attributed to an extremely strong 4Q13, where profit grew
eight-fold y-o-y. Driven by a better product mix and inventory provision,
UMS’ gross margins improved 22bps y-o-y in 4Q13. This was because
of UMS’ high fixed cost and low variable cost structure, where an
increase in revenue often leads to a leap in profits.

 Bright year ahead amid semiconductor recovery. In line with
Gartner’s estimates of a recovery in 2014, the global semiconductor
equipment industry resumed growth and foundries accelerated their
capital expenditure programmes. Semiconductor Equipment and
Materials International (SEMI) forecasted that semiconductor equipment
sales will grow 23.2% y-o-y in 2014, and January’s book-to-bill ratio of
1.04 seems to have confirmed it. Management also appears confident on
1H14 outlook and foresees strong demand for semiconductor equipment
and a ramp-up in orders from Applied Materials (AMAT US, NR), which
should lead to an inventory upswing.

 Dividend trumps expectations. Exceeding our raised expectations,
UMS will pay a final dividend of SGD0.035 per share, bringing full-year
dividends to SGD0.065 per share and a yield of around 10%. Cash flow
remained healthy, though slightly lower due to increased working capital
caused by higher business volume. Given its healthy cash flow and
increased profitability, we expect FY14 dividends to hit SGD0.07 or a
10.7% yield. As UMS pays quarterly dividends, this makes it an attractive
dividend proxy to AMAT and the recovering semiconductor industry.

http://rhbosk.ap.bdvision.ipreo.com/NSig...2d00cc7357 [Full Report]

(Vested)

[Nick]

CEO Andy Luong sold 5.976 million shares at $0.6497 yesterday hence reducing his stake 27.8% to 26.1%. Just like old times eh haha ?

(Vested)

[Boon]

Global Semiconductor Industry Posts Highest-Ever January Sales

Year-to-year global sales increase by largest margin in nearly three years; sales in Americas up 17.3 percent compared to last January

Published Monday, March 3, 2014 8:00 am

by Dan Rosso

WASHINGTON—March 3, 2014—The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing and design, today announced that worldwide sales of semiconductors reached $26.28 billion for the month of January 2014, an increase of 8.8 percent from January 2013 when sales were $24.15 billion, marking the industry’s highest-ever January sales total and the largest year-to-year increase in nearly three years. Global sales from January 2014 were 1.4 percent lower than the December 2013 total of $26.65 billion, reflecting normal seasonal trends. Regionally, sales in the Americas increased by 17.3 percent compared to last January. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average.

“The global semiconductor industry has built on its record revenues from 2013 with an impressive start to 2014, led largely by continued strength in the Americas market,” said Brian Toohey, president and CEO, Semiconductor Industry Association. “Sales in January were up across most regions and nearly all product categories compared to last January, which bodes well for continued growth during the rest of 2014.”

Regionally, year-over-year sales increased in the Americas (17.3 percent), Europe (11.3 percent), and Asia Pacific (8.3 percent), but decreased in Japan (-4.7 percent). Sales were flat in Europe compared to the previous month, but decreased slightly in Asia Pacific (-0.6 percent), Japan (-2.3 percent), and the Americas (-3.5 percent). January sales historically are lower than December sales due to seasonal trends...............

http://www.semiconductors.org/news/2014/...ary_sales/

(Vested)