UMS Holdings

(11-06-2014, 02:11 PM)Drizzt Wrote:

(11-06-2014, 10:01 AM)Stephentoh Wrote: Yea i'm add more lots @ 54cents. Business fundamentals are there, the frantic sale after bonus and sales by AMAS & Andy may just create an opportunity to enter at this current price,personally i dont see why the value now is not attractive. But the outlook for next year onward will be of concern, we know that its a cylincal coy. Excerise with cautious buddies.

seems that what you say is contradicting your buy decision.

Yes indeed, different people have different views, different perspective. What i feel as my margin of safety is not your. So its your call, the decision of mine is based on what i view UMS -AMAT relation. I acknowledge there is the player, TEL, out there , but its your call in whether you want intiate a buy position. I value the business, if you do i believe you will have your own decisions too

Reason I ask when I bonus share credit to me is I found some questions from sgx announcement.

On 2 June(during CB), AMAT sold 193 lot , from 6% (20639.4lot) reduce to 5.95%(20446.4lot).
On 5 June(XB), AMAT sold 2731 lot, from 5.63% (19331.4lot) reduce to 4.83%(16600.4lot).

My questions is;
1) where is the 1115 lot from AMAT? (20446.4-19331.4) Sold secretly without inform sgx?

Calculation on 5 June is without bonus shares. Once bonus share credit to AMAT, which is 4089.28 lot.(base on 20446.4 lot).
2) Is it meaning that AMAT holding share will back to 5.015%?
Which is (16600.4 + 4089.28)/412,505,219 outstanding ordinary shares (343,754,327 x 1.2)

(11-06-2014, 03:22 PM)ckphang84 Wrote: Reason I ask when I bonus share credit to me is I found some questions from sgx announcement.

On 2 June(during CB), AMAT sold 193 lot , from 6% (20639.4lot) reduce to 5.95%(20446.4lot).
On 5 June(XB), AMAT sold 2731 lot, from 5.63% (19331.4lot) reduce to 4.83%(16600.4lot).

My questions is;
1) where is the 1115 lot from AMAT? (20446.4-19331.4) Sold secretly without inform sgx?

Calculation on 5 June is without bonus shares. Once bonus share credit to AMAT, which is 4089.28 lot.(base on 20446.4 lot).
2) Is it meaning that AMAT holding share will back to 5.015%?
Which is (16600.4 + 4089.28)/412,505,219 outstanding ordinary shares (343,754,327 x 1.2)

AMAT had probably sold all their stake by now, they no longer need to declare their stake....

(11-06-2014, 02:05 PM)Jacmar Wrote:

(11-06-2014, 01:54 PM)Freenasi Wrote: One question, is UMS too risky to be dependent on one major customer for its business? If Amat really pull out i think its almost game over.

This is the single reason why I have not invested in UMS in all these yrs despite the juicy dividends. TEL has all the capabilities that UMS has and if the M&A goes through there is no reason for AMAT to hold on to a smaller player and small stake. Best to consol all in house. At this moment the risk reward is too high to hold on to UMS.

not vested

Absolutely, the biggest risk for investing in UMS is customer and industry concentration risk – one customer and one industry.

I believe AMAT and TEL each has its “in house” capabilities in doing what UMS has been doing for AMAT.

AMAT has made Singapore its global manufacturing hub for its semiconductor equipment since opening its Singapore manufacturing plant in 2010.

Under such business model/arrangement, by moving its manufacturing base from USA to Singapore, AMAT has been able to achieve an overall net cost saving, taking all benefits, including tax etc. into consideration.

AMAT is still enjoying this benefit, and in order to reap more benefits (reducing costs), it is in their game plans, upon successful merger of AMAT + TEL, to shift more manufacturing jobs to Singapore.

To my knowledge, TEL only has semiconductor equipment manufacturing facilities in Japan and USA.

It is of anyone’s guess if UMS would get more, less, or no additional jobs from AMAT (with or without TEL).

For those who have invested in UMS in early 2010, they would have collected a total DPS of SGD 22.5 cents to date.

(vested)

(11-06-2014, 10:45 AM)Boon Wrote:

(11-06-2014, 09:36 AM)Boon Wrote:

(11-06-2014, 01:32 AM)Tiggerbee Wrote: Rather than taking 2 years for UMS to acquire the technology know how, it probably take about 2 years for UMS supplied parts and Endura system to pass the clean room qualification criteria as the Enduta system and the parts shipped from UMS had to be proven to be not generating foreign particles that are going to end up as killer defects on customers' wafers. The testing system are copied direct from AMAT plants and any engineer trained by AMAT can easily perform the assembly and testing operations. AMAT probably has other vendors supplying the same Endura components and consumables so those parts are already qualified. What I'm saying is that any other existing vendor that's already supplying the parts can easily carry out the assembly and testing operations on the Endura. There are many Taiwanese and Korean companies that are capable of performing such operations. These vendors purchased 2nd hand semiconductor systems to refurb and final test these tools to re sell them to the wafer fabs.

I guess that UMS is supplying parts like the Endura mainframe and chambers as it's not cost effective to ship them from elsewhere. UMS probably also supply other components like skit valves and other moving parts made of aluminum as UMS has the expertise to machine these parts. That explains why their revenue consisted not only of assembly and testing services but also Endura parts and consumables.

In summary, what I'm saying is that the entry barrier is low for existing competitors in the Semicon industry, especially when the IP and specs of the manufactured parts belong to AMAT. So why does AMAT gives most of the orders to UMS in the past and not split the orders among different vendors? Perhaps it's because of Andy's relationship with AMAT senior management, or AMAT does not trust the Taiwanese and Koreans (there are OEM parts available from Korean and Taiwanese suppliers). Perhaps that's why UMS is enjoying a "loyalty margin".

UMS has made a representation that the barrier of entry is HIGH

Our Edge
3. Entrenched Relationship with Top Global Customers
•Serves a select group of leading global corporations (eg, Applied Materials Inc, Schlumberger)
•Deep & continuous collaborative effort from R&D to manufacturing of components to subassembly to surface finishing
•High barrier of entry for competitors
•Management criteria for customer acquisition:
•Earnings accretive
•Healthy and sustainable margin

http://www.set.or.th/th/asean_exchanges/..._ASEAN.pdf

(vested)

UMS to Improve Margin:

UMS is qualified for more than 70 special processes in the production of components for semiconductor equipment manufacturers.
Via the acquisition of the IMT Group (Integrated Manufacturing Technologies Pte. Ltd. (IMT-S) and Integrated Manufacturing Technologies, Inc (IMT-USA), UMS adds vacuum welding and tube bending services to its list of qualified capabilities.

The acquisitions (completed in February 2012) will reduce the subcontracting needs of the company and allow more margin to accrue in-house (starting from mid 1Q to 2Q 2012). More importantly, the lack of qualified vacuum welding and tube bending Applied contractors in the region provides the company with a marginal discriminatory pricing advantage – thus raising barriers of entry to the systems integration services market.

http://umsgroup.listedcompany.com/misc/UMS_050312.pdf

(vested)

Below are my personal opinions based on my years of experience working in the semicon industry.

I think the high barrier of entry are the tedious qualification process involved in qualifying the Endura components. If AMAT had other existing qualified vendors aside from UMS that can provide the service, the argument is that AMAT would already have channelled more orders to other vendors. For risk management, I doubt AMAT will reply solely on UMS as a single source so AMAT is most likely giving some orders to another vendor for risk management and benchmarking. And since UMS offers the lowest price, UMS is getiing the lion share of the biz. Has investors asked why UMS is able to enjoy high healthy sustainable margin? And why AMAT as the biggest customer does not exercise its muscle to reduce price? The semicon industry is known to be very tough for subcon vendors, especially when you're serving one of the biggest customers in the industry.

(11-06-2014, 03:34 PM)desmondxyz Wrote:

(11-06-2014, 03:22 PM)ckphang84 Wrote: Reason I ask when I bonus share credit to me is I found some questions from sgx announcement.

On 2 June(during CB), AMAT sold 193 lot , from 6% (20639.4lot) reduce to 5.95%(20446.4lot).
On 5 June(XB), AMAT sold 2731 lot, from 5.63% (19331.4lot) reduce to 4.83%(16600.4lot).

My questions is;
1) where is the 1115 lot from AMAT? (20446.4-19331.4) Sold secretly without inform sgx?

Calculation on 5 June is without bonus shares. Once bonus share credit to AMAT, which is 4089.28 lot.(base on 20446.4 lot).
2) Is it meaning that AMAT holding share will back to 5.015%?
Which is (16600.4 + 4089.28)/412,505,219 outstanding ordinary shares (343,754,327 x 1.2)

AMAT had probably sold all their stake by now, they no longer need to declare their stake....

No need to disclose from 5.95% to 5.63%

Events triggering reporting obligations

Upon becoming a “substantial holder”

Upon ceasing to be a “substantial holder”

Upon a change in “percentage level” of “substantial
holding” (discrete level of 1%)
----------------------------------------------------
(1660.4 x 1.25)/(343,754.327 x 1.25)=4.83%

http://www.imas.org.sg/uploads/media/201...ations.pdf

(vested)

(11-06-2014, 03:22 PM)ckphang84 Wrote: Reason I ask when I bonus share credit to me is I found some questions from sgx announcement.

On 2 June(during CB), AMAT sold 193 lot , from 6% (20639.4lot) reduce to 5.95%(20446.4lot).
On 5 June(XB), AMAT sold 2731 lot, from 5.63% (19331.4lot) reduce to 4.83%(16600.4lot).

My questions is;
1) where is the 1115 lot from AMAT? (20446.4-19331.4) Sold secretly without inform sgx?

Calculation on 5 June is without bonus shares. Once bonus share credit to AMAT, which is 4089.28 lot.(base on 20446.4 lot).
2) Is it meaning that AMAT holding share will back to 5.015%?
Which is (16600.4 + 4089.28)/412,505,219 outstanding ordinary shares (343,754,327 x 1.2)

FYI, SSH doesn't need to announce every trade, but only on the trade that crosses a % point. In this case, the 5% point.

(11-06-2014, 03:49 PM)Tiggerbee Wrote:

(11-06-2014, 10:45 AM)Boon Wrote:

(11-06-2014, 09:36 AM)Boon Wrote:

(11-06-2014, 01:32 AM)Tiggerbee Wrote: Rather than taking 2 years for UMS to acquire the technology know how, it probably take about 2 years for UMS supplied parts and Endura system to pass the clean room qualification criteria as the Enduta system and the parts shipped from UMS had to be proven to be not generating foreign particles that are going to end up as killer defects on customers' wafers. The testing system are copied direct from AMAT plants and any engineer trained by AMAT can easily perform the assembly and testing operations. AMAT probably has other vendors supplying the same Endura components and consumables so those parts are already qualified. What I'm saying is that any other existing vendor that's already supplying the parts can easily carry out the assembly and testing operations on the Endura. There are many Taiwanese and Korean companies that are capable of performing such operations. These vendors purchased 2nd hand semiconductor systems to refurb and final test these tools to re sell them to the wafer fabs.

I guess that UMS is supplying parts like the Endura mainframe and chambers as it's not cost effective to ship them from elsewhere. UMS probably also supply other components like skit valves and other moving parts made of aluminum as UMS has the expertise to machine these parts. That explains why their revenue consisted not only of assembly and testing services but also Endura parts and consumables.

In summary, what I'm saying is that the entry barrier is low for existing competitors in the Semicon industry, especially when the IP and specs of the manufactured parts belong to AMAT. So why does AMAT gives most of the orders to UMS in the past and not split the orders among different vendors? Perhaps it's because of Andy's relationship with AMAT senior management, or AMAT does not trust the Taiwanese and Koreans (there are OEM parts available from Korean and Taiwanese suppliers). Perhaps that's why UMS is enjoying a "loyalty margin".

UMS has made a representation that the barrier of entry is HIGH

Our Edge
3. Entrenched Relationship with Top Global Customers
•Serves a select group of leading global corporations (eg, Applied Materials Inc, Schlumberger)
•Deep & continuous collaborative effort from R&D to manufacturing of components to subassembly to surface finishing
•High barrier of entry for competitors
•Management criteria for customer acquisition:
•Earnings accretive
•Healthy and sustainable margin

http://www.set.or.th/th/asean_exchanges/..._ASEAN.pdf

(vested)

UMS to Improve Margin:

UMS is qualified for more than 70 special processes in the production of components for semiconductor equipment manufacturers.
Via the acquisition of the IMT Group (Integrated Manufacturing Technologies Pte. Ltd. (IMT-S) and Integrated Manufacturing Technologies, Inc (IMT-USA), UMS adds vacuum welding and tube bending services to its list of qualified capabilities.

The acquisitions (completed in February 2012) will reduce the subcontracting needs of the company and allow more margin to accrue in-house (starting from mid 1Q to 2Q 2012). More importantly, the lack of qualified vacuum welding and tube bending Applied contractors in the region provides the company with a marginal discriminatory pricing advantage – thus raising barriers of entry to the systems integration services market.

http://umsgroup.listedcompany.com/misc/UMS_050312.pdf

(vested)

Below are my personal opinions based on my years of experience working in the semicon industry.

I think the high barrier of entry are the tedious qualification process involved in qualifying the Endura components. If AMAT had other existing qualified vendors aside from UMS that can provide the service, the argument is that AMAT would already have channelled more orders to other vendors. For risk management, I doubt AMAT will reply solely on UMS as a single source so AMAT is most likely giving some orders to another vendor for risk management and benchmarking. And since UMS offers the lowest price, UMS is getiing the lion share of the biz. Has investors asked why UMS is able to enjoy high healthy sustainable margin? And why AMAT as the biggest customer does not exercise its muscle to reduce price? The semicon industry is known to be very tough for subcon vendors, especially when you're serving one of the biggest customers in the industry.

not that AMAT never squeeze the price, but think UMS had invested alot along the years on CAPEX, thus they are more comfortable getting the jobs done.. while others may face high capex low return thus not willing to get it... UMS factory just next to Applied Material also 1 factor..

http://infopub.sgx.com/FileOpen/_eFORM1_...eID=300987

Andy Luong selling again....

21.99% -> 20.25%

expected looking at yesterday volume... Quite likely he sold as well today as volume was still very big. Announcement will only be made tomorrow evening if that happened today. Really expecting an announcement from UMS clarifying why Andy is selling so massively. Can't sell between 6 to 10M shares every day that's such an inefficient way to sell shares