Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

A chartered management accountant with more than 10 years of rich experience in investment research and financial analysis. Worked as an equity analyst for one of the world's largest asset managers with USD2.5trn in AUM covering numerous sectors including chemicals, retail, tech, autos, telco, real-estate and banks, globally. Experienced in fundamental equity research, industry research, commodity studies, forensic accounting, and due diligence reviews.

Equity Analyst

Sumco 3Q Results: Earnings Beat Consensus; Current Valuation Provides a Good Entry Point

Silicon Wafers Q3 2019. LTAs & Joint Investments Are Fixing Some Problems But Creating Others

Sumco: Earnings Growth to Resume in 1QFY2020 After Dropping for Five Straight Quarters

Sumco Reports Solid Growth in Revenue and Operating Profit; Stock Is Still Trading at a Discount

Sumco Reports Strong First Quarter Results; We Remain Optimistic on the Stock

Sumco: Well Positioned to Expand Capacity Faster than Its Competitors if Demand Picks Up

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

Sumco reported 2Q2019 results on Tuesday (06th August 2019) which saw the company revenue and operating profit decline on a YoY as well as on a QoQ basis. The reported revenue and operating profit for the quarter were well below Sumco’s own guidance as well as consensus estimates. The drop-in earnings were mainly due to declining demand for 300mm wafers while 200mm wafer has started showing signs of softening. Going into the second half of the year, the management does not expect a material recovery in the global semiconductor demand and as such expects the earnings during third quarter 2019 to decline compared to last year as well as the second quarter results. That being said, a look at the company’s historical earnings trend and the performance during past semiconductor downturns, the current earnings are way above the earnings at the bottom of the previous semiconductor cycle in 2015 and early part of 2016. Sumco’s share price has started declining since May 2018 even before the company earnings started declining or the company provided negative earnings guidance. The market is expecting the semiconductor demand to start recovering towards the end of 2019 and we expect the company earnings to start moving up going into 2020.We discuss the details below.

Sumco reported 2Q2019 results on Tuesday (06th August 2019) which saw the company revenue and operating profit decline on a YoY as well as on a QoQ basis. The reported revenue and operating profit for the quarter were well below Sumco’s own guidance as well as consensus estimates. The drop-in earnings were mainly due to declining demand for 300mm wafers while 200mm wafer has started showing signs of softening. Going into the second half of the year, the management does not expect a material recovery in the global semiconductor demand and as such expects the earnings during third quarter 2019 to decline compared to last year as well as the second quarter results. That being said, a look at the company’s historical earnings trend and the performance during past semiconductor downturns, the current earnings are way above the earnings at the bottom of the previous semiconductor cycle in 2015 and early part of 2016. Sumco’s share price has started declining since May 2018 even before the company earnings started declining or the company provided negative earnings guidance. The market is expecting the semiconductor demand to start recovering towards the end of 2019 and we expect the company earnings to start moving up going into 2020.We discuss the details below.

サムコ：2019年第2四半期の利益は減少したが、それでも過去の不況よりはまし

SUMCO Corp

サムコ：2019年第2四半期の利益は減少したが、それでも過去の不況よりはまし