Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

SK Holdings Co Ltd/Old / Equity Capital Markets

SK Siltron is expected to complete its IPO in 2H18. This is expected to be one of the highly anticipated IPOs in the Asian semiconductor sector this year. SK Siltron makes silicon wafers which are thin discs used as a basic material for semiconductors. These wafers are used to make semiconductor devices such as DRAM, flash memory, LCD drivers, image sensors, and power devices. Currently, <a href="https://www.smartkarma.com/entities/393" target="_blank" data-smartkarma-citation="entities:393:1">SK Holdings Co Ltd (034730 KS)</a> has a 70.6% stake in SK Siltron. <h2>Company Background</h2>Established in 1983, SK…

SK Siltron is expected to complete its IPO in 2H18. This is expected to be one of the highly anticipated IPOs in the Asian semiconductor sector this year. SK Siltron makes silicon wafers which are thin discs used as a basic material for semiconductors. These wafers are used to make semiconductor devices such as DRAM, flash memory, LCD drivers, image sensors, and power devices. Currently, SK Holdings Co Ltd (034730 KS) has a 70.6% stake in SK Siltron. Company BackgroundEstablished in 1983, SK…

Equity Analyst, LightStream Research

Farha Sabri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul><li>Revenue and operating profits to soar on the back of increased wafer prices. Sumco has planned a 20% price hike in FY12/18 and we expect revenue to grow by 20.8% YoY and OPM to improve from last year’s levels. We expect the OPM to improve to approximately 16.5% in the current fiscal year.</li><li>Sumco plans to increase production capacity for 300mm wafers gradually. The company is still skeptical about capacity expansion for 200mm wafers. As such, this segment does not presently have any expansion plans.</li><li>Sumco seems to be undervalued with our estimates showing a FY1 PE of 24.3x, below the company’s historical median as well as peer multiples.</li></ul>

Revenue and operating profits to soar on the back of increased wafer prices. Sumco has planned a 20% price hike in FY12/18 and we expect revenue to grow by 20.8% YoY and OPM to improve from last year’s levels. We expect the OPM to improve to approximately 16.5% in the current fiscal year.Sumco plans to increase production capacity for 300mm wafers gradually. The company is still skeptical about capacity expansion for 200mm wafers. As such, this segment does not presently have any expansion plans.Sumco seems to be undervalued with our estimates showing a FY1 PE of 24.3x, below the company’s historical median as well as peer multiples.

Sumco Benefits from Rebound in Wafer Prices Following Demand-Supply Mismatch

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

We believe that conditions within the semiconductor chain make the relative prospects for wafer manufacturers extremely attractive in terms of both potential upside as well as the likelihood and volatility of profit growth over the next 3-4 years. In contrast, surging capex levels in 2017 make us concerned that we are nearing the top in terms of wafer fabrication equipment spending. While we are not outright negative on semi capex, we feel the potential for a plateau is increasingly high. More…

We believe that conditions within the semiconductor chain make the relative prospects for wafer manufacturers extremely attractive in terms of both potential upside as well as the likelihood and volatility of profit growth over the next 3-4 years. In contrast, surging capex levels in 2017 make us concerned that we are nearing the top in terms of wafer fabrication equipment spending. While we are not outright negative on semi capex, we feel the potential for a plateau is increasingly high. More…

Asia and Global Semiconductor and Tech Research

Andrew Lu

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) (2330 TT)

TSMC (Taiwan Semiconductor Manufacturing)

<h2>Summary</h2>Despite much in line 1Q18 guidance (8-10% q/q sales decline, 49.5-51.5% gross margin, 38-40% operating margin), most of the incremental new messages from TSMC should drive 18 bull analysts (18 buys and 14 holds) to stay positive on the company and some of 14 bear analysts to change the side. We are positive on lower capex density (although raises sales growth to 10-15% from 5-10% y/y) with room to raise cash dividends to NT$10 per share within the next few years. We are positive on much…

SummaryDespite much in line 1Q18 guidance (8-10% q/q sales decline, 49.5-51.5% gross margin, 38-40% operating margin), most of the incremental new messages from TSMC should drive 18 bull analysts (18 buys and 14 holds) to stay positive on the company and some of 14 bear analysts to change the side. We are positive on lower capex density (although raises sales growth to 10-15% from 5-10% y/y) with room to raise cash dividends to NT$10 per share within the next few years. We are positive on much…

TSMC Expects Stronger Sales but Lower Capex Density, Implying Room to Raise Cash Dividends

Macro & Asian equity Technical Strategies, BBSP Asia

Federico D'Inca

Macro & Asian equity Technical Strategies

BBSP Asia

Technical Analysis

Weekly Key elements :Testing key fractal at 2570....surpassing this level (daily close minimum) confirms the bullish exit from the range with a target at 4300.Should you have any questions and wish to speak with one of our analysts, please don’t hesitate to contact us. Equity Asia: + (65) 6735 3040 or <a href="mailto:asia@bbsp.sg" target="_blank">asia@bbsp.sg</a> Access to this document is restricted to the use of the intended recipient designated by BBSP and may not be shared with others. Any unauthorised use, dissemination, distribution or…

Weekly Key elements :Testing key fractal at 2570....surpassing this level (daily close minimum) confirms the bullish exit from the range with a target at 4300.Should you have any questions and wish to speak with one of our analysts, please don’t hesitate to contact us. Equity Asia: + (65) 6735 3040 or asia@bbsp.sg Access to this document is restricted to the use of the intended recipient designated by BBSP and may not be shared with others. Any unauthorised use, dissemination, distribution or…

SUMCO (3436 JP) 60%+ Upside Potential Congestion Exit

Japan

SUMCO Corporation manufactures silicon wafers for the semiconductor industry. The Company produces silicon wafers used to produce solar batteries as well as ultra-high purity quartz used to produce vessels for silicon manufacturing process. SUMCO markets its products worldwide.

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SUMCO Corp (3436 JP)

SK Siltron IPO Preview (Part 1)

SK Siltron is expected to complete its IPO in 2H18. This is expected to be one of the highly anticipated IPOs in the Asian semiconductor sector...

Douglas Kim

Sumco Benefits from Rebound in Wafer Prices Following Demand-Supply Mismatch

Revenue and operating profits to soar on the back of increased wafer prices. Sumco has planned a 20% price hike in FY12/18 and we expect revenue...

Farha Sabri

Sumco Vs. TEL: Wafers over Etchers

We believe that conditions within the semiconductor chain make the relative prospects for wafer manufacturers extremely attractive in terms of both...

Mio Kato

TSMC Expects Stronger Sales but Lower Capex Density, Implying Room to Raise Cash Dividends

SummaryDespite much in line 1Q18 guidance (8-10% q/q sales decline, 49.5-51.5% gross margin, 38-40% operating margin), most of the incremental new...

Andrew Lu

SUMCO (3436 JP) 60%+ Upside Potential Congestion Exit

Weekly Key elements :Testing key fractal at 2570....surpassing this level (daily close minimum) confirms the bullish exit from the range with a...

BBSP Asia

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