UMS Holdings

[BlueKelah]

at the current price of 50 cents the 5 cents dividends would yield 10%
just wanna ask you guys a quick question,
what's the probability of UMS maintaining this 5 cent payout in the coming 3-5 years to come?

if its very likely then I would think its still a very attractive investment

Very likely to maintain at least 4cent per year for at least next 3 years so long as Applied Materials keeps the status quo and not force discounting.

But do note cash is ~15% market cap now, not that much.. EPS should be easily more than 4 cent a year and mobile market looks ok for next few years but with the crazy global economy who knows?

Need to remember semi-conductor market can downcycle very quickly despite the rosy outlook today.

So currently looks attractive based on div yield and business doing well. But being a small cap with not much reserves at the moment, it can become unattractive very fast.

Margin of safety is also not that great at the moment. Definitely one to keep on the watchlist and pickup during corrections.

[felixleong]

thanks for the reply, very kind of you
yeah will keep UMS in my watch list, this is a cash cow for sure ^^

[Boon]

1) Will this trend continues?

Smartphones outsell basic mobile handsets for first time
The Guardian， Wednesday 14 August 2013 13.32 BST
http://www.theguardian.com/technology/20...c-handsets

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2) Yes, according to AMAT until......................

"We expect that growth rate is going to continue that way until essentially all phones are smartphones." - Mike Splinter – Applied Materials

Q & A Session （AMAT - 3Q2013 Results, Analyst Brriefing）

Question：by John Pitzer - Credit Suisse

Yes, good afternoon guys. Let me add my congratulations to both Mike and Gary. So, my first question guys, I kind of going to go back to one of the presentations at the Analyst Day over a month ago, will you talk about WFE spending being kind of $37 billion, I believe out in ‘16. I think I understand the positive impact of capital intensity on that number. I am wondering if you can help me understand how you guys think about And I guess what I am really trying to get out is we have seen this pretty significant mix shift down in the consumer market from the high end to the mid-range to the low-end, which probably doesn’t reverse itself. I am kind of curious as how that dynamic need attraction in longer term forecast on capital spending?

Answer：by Mike Splinter – Applied Materials

Thanks, John. That was a long question, but and a little further out question, I think how we tried to describe it at Analyst Day was really looking at process complexity increasing over these next few nodes to create the – we talked about the number of increased steps in 3D NAND, and those that would favor us, we also talked about the increased steps for vertical transistors, thin fabs, everybody is racing in that direction. And how much more difficult it is to be going to be to create these 10-nanometer or 7-nanometer patterns that our customers are going to be driving towards at that time. That’s by far the biggest effect. And then the second part of it is really a continued build out of the smartphone and mobility mobile tablets over that period of time. We expect that growth rate is going to continue that way until essentially all phones are smartphones.
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3) The day when essentially all phones are smartphones is not an end - it will be a milestone - as smartphones will get smarter.

From 3D graphics to biometric scans: How your smartphone will get smarter
By Daniel Burrus, Special to CNN
February 21, 2013 -- Updated 2103 GMT (0503 HKT) | Filed under: Mobile
http://edition.cnn.com/2013/02/21/tech/m...e-strategy
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4) More opportunities for AMAT?

EU Invests 4.8 billion Euro into Semiconductors; France Announces 3.5 billion Euro "Nano2017" Program
By Rania Georgoutsakou, director, Public Policy, SEMI Europe
Aug 15, 2013
http://www.emsnow.com/npps/story.cfm?pg=story&id=52039

The SEMI World Fab Watch foresees fab and equipment spending in Europe to be in the range of $ 5 billion in 2014. Coupled with the increased investment opportunities that the new EU 10/100/20 strategy will spur, the European market is looking to grow in the next few years, creating important business opportunities for equipment and material suppliers

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5) If the change over to 450mm wafer and its production could arrive earlier, it would be an added bonus !

Construction of 450mm Fab 'Well Underway'
8/15/2013 10:20 AM EDT
http://www.eetimes.com/author.asp?sectio...id=1319230

(Vested)

[felixleong]

Yeah I strongly agree, eventually it will be 100% smartphones

[Boon]

Welcome to the “New Normal”

Revenue (SGD million) (UMS)
1Q2011 = 34.957 (strong)
2Q2011 = 32.664 (strong)
3Q2011 = 21.650 (weak)
4Q2011 = 25.156 (weak)
1Q2012 = 31.992 (strong)
2Q2012 = 36.637 (strong)
3Q2012 = 22.952 (weak)
4Q2012 = 21.631 (weak)
1Q2013 = 27.845 (strong, may be not so strong)
2Q2013 = 32.821 (strong)
3Q2013 = “breather”?
4Q2013 = “breather”?

DPS (SGD) UMS
FY2011 = 6 cents
FY2012 = 5 cents
FY2013 = ? cents

If management’s expectation on the “breather” in 2H2013 is correct, then, for three consecutive years, UMS would have been trending on the path of having two strong quarters to be followed by two relatively weaker quarters. This is consistent with what AMAT has observed

“Now let me turn to our outlook, through the third year in a row seasonal buying patterns are evident as consumers wait for new smartphone and tablet models to be released in the fall, as a result we’re seeing a near term slowdown in investment by our foundry customers as they focus on ramping new capacity installed over the past two quarters. This will deliver product for the holiday season and readying their next generation of technology. We expect investment levels to recover in the fourth calendar quarter.” – by Mike Splinter of AMAT, during analysts briefing – 3Q2013 results.

To me, as long as the “two strong quarters” are “strong enough” to generate a total FCF of around 4 cents per share (or SGD 13.8 million) to cover the quarterly dividend payout of at least 1 cent, then it should be fine.

For the other “two weaker quarters”, regardless of how weak they might be, as long as an additional FCF of 1 to 2 cents per share could be generated to top up the yearly DPS from 4 cents to 5 or 6 cents, then it should be fine as well.

In short, “two strong quarters + two weaker quarters” is fine as long as the yearly FCF generated could sustain a yearly DPS of 5 to 6 cents – So far so good - this is what matter most to investors

Welcome to the “New Normal”- we'd better get used to it - ha-ha !

(Vested)

[Dividend Warrior]

Yes. The trend of increased data usage will continue.
We cannot live without our precious smartphones.

[Boon]

North American Semiconductor Equipment Industry Posts July 2013 Book-to-Bill Ratio of 1.00

SAN JOSE, Calif. — August 20, 2013 — North America-based manufacturers of semiconductor equipment posted $1.27 billion in orders worldwide in July 2013 (three-month average basis) and a book-to-bill ratio of 1.00, according to the July EMDS Book-to-Bill Report published today by SEMI. A book-to-bill of 1.00 means that $100 worth of orders were received for every $100 of product billed for the month.

The three-month average of worldwide bookings in July 2013 was $1.27 billion. The bookings figure is 4.6 percent lower than the final June 2013 level of $1.33 billion, and is 3.1 percent higher than the July 2012 order level of $1.23 billion........................................

"However, order data moderated slightly in the July report and we will look to the month ahead to determine if this reflects a trend change."

http://www.semi.org/en/node/46776?id=highlights

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Digitimes Research: Global smartphone shipments to reach 950 million in 2013

Luke Lin, DIGITIMES Research, Taipei [Monday 19 August 2013]

Global smartphone shipments reached 420 million units in the first half of 2013 and are expected to top nearly 950 million units for the full year, Digitimes Research has estimated.

The supply of mobile RAM and NAND flash chips, which was tight and costly in the first half of 2013 in part due to price manipulation by suppliers, will ease in the second half, but that for HD and Full HD displays will remain tight in latter half of the year.

Shipment growth in China will be limited in the second half as vendors will continue to digest their high inventories of 3.5-inch TD-SCDMA models, but shipments in India, Russia, Eastern Europe, Southeast Asia and Latin America will remain robust during the period.

Some handset design houses and OEMs in China have been shifting their focus to overseas markets, alleviating price competition in the homeland. Meanwhile, the top-four telecom carriers in the US have begun offering one-year subscription contracts, which is expected to stir up demand for high-end models.

Four out of the top-10 smartphone vendors in 2013 will be China-based brands, and Taiwan-based HTC will be excluded from the top-10 ranking. Samsung Electronics, Apple and LG Electronics will be the top-three vendors, with Lenovo, Sony Mobile Communications and Huawei taking the fourth to sixth positions. ZTE will rank seventh, followed by Yulong (Coolpad), Nokia and BlackBerry, with each of the last four vendors shipping about 30 million smartphones in the year, Digitimes Research estimated.

http://www.digitimes.com/news/a20130819P...tml?chid=2

(vested)

[KopiKat]

Looking at the 'New Normal", it can be comforting to see a seemingly seasonal trend for the past 3 years. Using the BB ratio,

[Image: 5ycm82.jpg]

But, as highlighted by Nick in a much earlier post, we should also look at the Billing trend,

[Image: 25s8t4j.jpg]

Not as comforting... to see lower peaks... Perhaps need a stronger US recovery + an Europe recovery to counter potential recession in Asia?

[freedom]

Digitimes Research: Global smartphone shipments to reach 950 million in 2013

I never understand why people are changing their smartphones so often. A well-built smartphone can last a few years without any problem and smartphone is not exactly a cheap device.

Is current estimate of smartphone shipments really logical?

[Drizzt]

Digitimes Research: Global smartphone shipments to reach 950 million in 2013

I never understand why people are changing their smartphones so often. A well-built smartphone can last a few years without any problem and smartphone is not exactly a cheap device.

Is current estimate of smartphone shipments really logical?

habit that the telcos build up. its sickening and now they are suffering because they want to reduce the subsidies now that 3G and 4G have taken off but couldn't as they will lose customers.

Vodafone tried. didnt work.

but they will keep trying.