CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

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Equity Bottom-Up

<ul><li>Improving asset turnover, high level of cash sales, and good price momentum relative to its sector </li><li>Wafer demand above supply should continue as top 5 players produce over 90% of supply and no one plans to increase capacity before 2019 </li><li>JV with <a href="https://www.smartkarma.com/entities/4950" target="_blank" data-smartkarma-citation="entities:4950:1">Ferrotec Corp (6890 JP)</a> in China to produce up to 450k 8” wafers/month starting from 150k wafers/month, about 20% expansion </li><li>Trades above Asian Info Tech at 17CE* 25.2x PE but earnings have turned and GWC has reduced its gearing substantially </li><li>Risks: Top producers’ capacity increases and new regulations for product certifications</li></ul>* Consensus Estimates

Improving asset turnover, high level of cash sales, and good price momentum relative to its sector Wafer demand above supply should continue as top 5 players produce over 90% of supply and no one plans to increase capacity before 2019 JV with Ferrotec Corp (6890 JP) in China to produce up to 450k 8” wafers/month starting from 150k wafers/month, about 20% expansion Trades above Asian Info Tech at 17CE* 25.2x PE but earnings have turned and GWC has reduced its gearing substantially Risks: Top producers’ capacity increases and new regulations for product certifications* Consensus Estimates

GWC (6488 TT): The World's Third Largest Wafer Producer

Japan

Ferrotec Corporation develops, manufactures, and sells equipment that incorporates magnetic fluid (ferrofluid) technology. The Company manufactures and processes electronics components, manufactures machine tools, and cleans parts used in semiconductor manufacturing equipment as CMS (contract manufacturing service) business in China.

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GWC (6488 TT): The World's Third Largest Wafer Producer

Improving asset turnover, high level of cash sales, and good pricemomentum relative to its sector Wafer demand above supply should continue as top...

A. Stotz Investment Research