UMS Holdings

[Boon]

PROPOSED BONUS SHARE ISSUE ON THE BASIS OF ONE (1) BONUS SHARE FOR EVERY FOUR (4) EXISTING ORDINARY SHARES – RECEIPT OF IN-PRINCIPLE APPROVAL FROM SGX-ST

http://infopub.sgx.com/FileOpen/UMS_SGX-...eID=295690

(vested)

[LittleBoyInvestor]

Based on yesterday closing price of $0.820. If bonus shares is issued out, share price will be at $0.655.

UMS is rising steadily even after XD. Seems like those vested are gonna have a "free" dividend. Congrats to those holding on to it. Unfortunately, I missed this opportunity.

http://littleboyinvestment.blogspot.sg/2...-to-4.html

Cheers!

[Nick]

I highly suspect the Management will maintain the dividend of 5 - 6 cents post bonus issue. In that case, we may not necessarily see a full correction back to 66.5 cents ?

(Vested)

[LittleBoyInvestor]

I highly suspect the Management will maintain the dividend of 5 - 6 cents post bonus issue. In that case, we may not necessarily see a full correction back to 66.5 cents ?

(Vested)

Maintaining a 5 cents dividend after Bonus Shares issued means a dividend payout of approx $21.4m. I am optimistic that UMS is capable of paying this amount out given that they have a dividend payout of $20.5 in FY2012 alone. With UMS growing at such pace, it should not be a problem.

http://www.littleboyinvestment.blogspot.sg

Cheers!

[valuebuddies]

It has been consistent in paying 1c dividend each quarter and a special div at Q4. With this bonus share, I think the company still manage to pay 1c each quarter but I don't expect to have special div every year again. Will not surprise to see the price to go below the theoretical XB price, because it shouldn't gone up in the first place when bonus share announced.

(vested)

[Jeff]

It has been consistent in paying 1c dividend each quarter and a special div at Q4. With this bonus share, I think the company still manage to pay 1c each quarter but I don't expect to have special div every year again. Will not surprise to see the price to go below the theoretical XB price, because it shouldn't gone up in the first place when bonus share announced.

(vested)

To me it will be more reasonable if it takes same amount of cash each quarter for dividend, ie. 1 cts will become 0.8 cts. and similarly remains same amount of cash for special dividend at year end. Thus the company will still have enough cash for its business use.

Jeff

[Nick]

It will cost nearly $26 million to maintain 6.00 cents dividend post bonus issue. Including estimated capex of $4-5 million, the Company will need to generate $30 million OCF to sustain such a payout. Is this possible ? The only time it breached this amount was in FY 2011 (it benefited from the solid FY 2010 performance). If FY 2014 turns out to be a great year, such a feat could be repeated. Naturally, this business is highly seasonal so one should expect the Company to report much lowered profits in poor times and a drastically lower dividend. The base dividend has been 5 cents (1 cent for 1 - 3Q and 2 cent for 4Q) with special dividend also declared in 4Q (1.5 cents in 4Q 2013). I think barring a great dip in the macro outlook, 5 cent dividend should be easily maintained. Let's not forget, UMS is debt-free with $29 million cash so it doesn't truly need to retain significant sums of cash unless there is a M&A.

On a lighter note, the peak UMS share float was in 2007 at 410 million shares. Since then, the Company aggressively repurchased shares reducing the float to 343 million. After the bonus issue, we will be back to around that level again.

(Vested)

[wahkao]

when is the bonus shares coming in?

[Nick]

when is the bonus shares coming in?

The book closure date isn't out yet.

[Boon]

Overall, IC Insights believes that most of the large fabless IC suppliers will continue to do well and will help to drive significant sales gains by the major IC foundries (e.g., TSMC, GlobalFoundries, Samsung, UMC, etc.).

Moreover, as the barriers to entry (i.e., high design costs, increasingly difficult access to venture capital money, etc.) rise, and fewer fabless companies are founded, IC Insights believes that the total fabless IC supplier listing will continue to become increasingly “top-heavy” in the future.

Over the long-term, IC Insights believes that fabless IC suppliers, and the IC foundries that serve them, will continue to become a stronger force in the total IC industry.
________________________________________________________________________________________________________________________________________________

Taiwanese and Chinese Companies Represented Five of the Eight Fastest Growing Top-25 Fabless IC Suppliers in 2013
China-based Spreadtrum lead the way with a 48% surge in year-over-year growth.

RESEARCH BULLETIN by IC Insights
MAY 7, 2014

http://www.icinsights.com/data/articles/...ts/663.pdf

(vested)