ASM Pacific 522

[winston]

Not vested.

DJ MARKET TALK: Goldman Sachs Downgrades ASM Pacific To Sell

1137 [Dow Jones] STOCK CALL: Goldman Sachs downgrades ASM Pacific (0522.HK) to Sell from Neutral. Says stock has outperformed HSI by 45% over last 3 months, mainly due to potential secular growth of LED and copper wirebonding.

But, house thinks impact of LED and copper has been overdone; notes company still generates 75% of revenue from semiconductor equipment and is therefore subject to next semiconductor price correction, potentially in 4Q10-1Q11.

However, house raises target price to HK$65.00 from HK$58.00 on 17X P/E vs historical average 5X P/E due to secular growth of LED and copper. It last down 6.8% at HK$66.05.

Source: Dow Jones Newswire

[winston]

Dividend remains

ASM Pacific Technology (0522) said its net profit last year declined 3.9 percent to HK$935 million despite a strong rebound in the fourth quarter.

But the world's largest semiconductor equipment maker still recommended a final dividend of HK$1.20 and a special dividend of 40 HK cents - making the full-year dividend HK$2.20 per share.

This is a payout ratio of 91 percent versus the full-year earnings per share of HK$2.40.

Chief executive Lee Wai- kwong said the high dividend payout was a result of the firm's cash reserves of US$160 million (HK$1.24 billion) and zero debts.

Lee expects ASM to record a net profit of more than HK$1 billion this year. "I am bullish .. since there is no sign of market momentum declining."

Lee said capital expenditure this year will hit HK$500 million - four times that of 2009. A new plant will be built in southern China in the third quarter.

By: SOPHIE HE, The Standard HK

http://www.thestandard.com.hk/news_deta ... 00226&fc=8

[winston]

Not vested.


DJ MARKET TALK: ASM's Extended Upcycle Approaching Peak - CS

0927 [Dow Jones] STOCK CALL: Credit Suisse raises ASM Pacific (0522.HK) target price to HK$63.00 from HK$46.50 after consensus-beating 4Q09 results, raises ASM's FY10-11 earnings forecasts by 17%-28%, stronger-than-expected backlog, industry cyclicality.

Still, keeps Underperform call, as believes after exceptional industry slump, current upcycle is extended on pent-up demand; assuming extended cycle of 12-15 months, "potential peak" likely in 1Q-2Q10.

Although agrees ASM should continue to benefit from demand of LED applications, copper wire-bonding in medium term, "it is approaching the current cycle peak after a year of strong recovery." Stock ends +3.1% at HK$71.40 post-results, but off intraday high of HK$73.20.

Source: Dow Jones Newswire

[winston]

Vested.

DJ MARKET TALK: AMD Comment May Further Buoy Lenovo, ASM Pacific
April 16, 2010

0832 [Dow Jones] Lenovo (0992.HK), ASM Pacific (0522.HK) in short term likely remain buoyant although valuations appear lofty; further evidence of strong PC demand coming from news Advanced Micro Devices (AMD) saying demand for semiconductors continues to outpace supply even as chip makers try to increase production to meet renewed sales of PCs and servers, echoing upbeat view from Intel (INTC).


Source: Dow Jones Newswire

[winston]

Not vested.

DJ MARKET TALK:ASM Pac's Record 1Q Result Likely Partly Priced In

0908 [Dow Jones] ASM Pacific (0522.HK) continues to deliver strong earnings growth, question is how much of that being priced in, given stock rallied 136% in past year. 1Q net profit at record HK$466 million vs year ago net loss of HK$85 million, though on-quarter growth only 1.5%, with company retaining world No. 1 position in assembly, packaging equipment industry held since 2002.

Likely taken as positive is strong backlog orders, which amounted to US$384 million (also a record), +35% on-quarter, indicating demand remains strong. If stripping out cash on hand (company has zero debt) of HK$1.43 billion, forward FY10 P/E at 17.3X based on Thomson Reuters, would suggest shares probably have priced in quite a lot expectations of strong earning growth. ASM bucked market fall yesterday, +0.8% at HK$78.05, psychological HK$80 may act as immediate cap.

Source: Dow Jones Newswire

[winston]

Not vested.

SCENARIOS-ASMI faces split-up demand over Hong Kong stake

* ASMI wants to postpone debate about potential split-up
* Shareholders to vote on May 20 shareholders meeting
* Special dividend could keep activists quiet

By Harro ten Wolde

PARIS, May 19 (Reuters) - Dutch semiconductor equipment maker ASM International (ASMI.AS)(ASMI.O) has a battle on its hands on Thursday to fend off activist shareholders seeking a breakup of the company.

The shareholders want to unlock the value of ASMI's 53-percent stake in Hong Kong-listed ASM Pacific Technology (0522.HK), which makes machines for chip assembly and packaging.

The stake alone is worth 1.3 billion euros ($1.6 billion), based on ASM Pacific's share price -- some 450 million above ASMI's total market capitalisation.

ASMI promised shareholders in 2008 it would put the valuation mismatch on the agenda of the annual shareholder meeting in 2010, but last month said it wanted to hold the discussion only in 2012 due to the recession depressing the value of its own shares.

This prompted investor advisor Churchill Capital to urge shareholders to block the postponement proposal, which Dutch shareholders' group VEB also wants to see voted down. [ID:nLDE64C0J1]

Following is an outline of what could come next:

WAIT TWO MORE YEARS

It will be hard for activist shareholders to find enough support to block ASMI's proposal at the May 20 meeting as ASMI founder Arthur del Prado alone owns more than a fifth of the company.

The three main activist shareholders have been reducing their individual stakes since 2008 to below 5 percent due to the financial crisis.

At the same time ASMI's customers Tokyo Electron (8035.T) and Intel (INTC.O) have bought stakes of a little under 5 percent each in ASMI.

A big turnout is needed to block the proposal and shareholders may end up having to wait two more years to unlock the underlying value of their ASMI shares.

SEE YOU IN COURT (AGAIN)

There is always the option for shareholders to go to the Dutch commercial court. It is already looking into another case, which involves ASMI management's handling of an offer from Applied Materials (AMAT.O) for a major part of the company in 2008.

The court is also investigating whether the issuance of shares to a management-allied foundation was intended to protect management against activist shareholders Hermes and Fursa, who wanted to sack Chief Executive Chuck del Prado, son of founder Arthur.

Shareholders may however reconsider the court option as new judge Peter Ingelse is seen as less receptive to activists.

In March, the court denied all claims of investors who opposed Canon Inc's (7751.T) $1-billion buy of Dutch photocopier and printing firm Oce. [ID:nLDE6221ZF]

SPECIAL DIVIDEND

ASMI could opt for a less radical solution and return some of the hidden value of ASM Pacific to shareholders via dividend payments.

That could keep activists quiet for a while as it will take away part of the 30 percent discount of ASMI shares to ASM Pacific.

"A closure of the valuation gap is in our view also the best defence for ASMI against new attacks from activist shareholders," SNS Securities analyst Victor Bareno said two months ago in a research note.

"If the discount would persist at the current extreme levels, it cannot be excluded that action-oriented investors will take a fresh look at the stock again."

Following is an overview of major shareholders:

COMPANY NAME % VOTING RIGHTS* DATE
Arthur del Prado 22.29 Aug 3, 2009
Lazard Asset Management 5.43 April 29, 2010
Fidelity Management &
Research Company 5.03 Dec 22, 2009
Hermes Focus Asset
Management Europe Limited 4.97 Oct 2, 2009
Centaurus Capital 4.95 March 11 2009
Tokyo Electron (8035.T) 4.9 April 2009
Fursa Alternative
Strategies LLC 4.19 May 14, 2008
Intel (INTC.O) Capital 4 May 2009

* Under Dutch law shareholders only have to file their holdings in companies when passing a threshold, of which 5 pct is the first. Any changes below the 5 pct notch are invisible to supervisors.

Sources: Dutch Authority for the Financial Markets (AFM), company statements

[winston]

DJ MARKET TALK: Morgan Stanley Upgrades ASM Pacific To Overweight

1204 [Dow Jones] STOCK CALL: Morgan Stanley upgrades ASM Pacific (0522.HK) to Overweight from Equalweight as says stock down sharply recently (down 20% in May), valuation more attractive.

House also raises target price to HK$75.00 from HK$60.00 after revising up earnings estimates. Says while macro environment remains uncertain, semiconductor industry has seen some significant capex increases among at least 2 key players recently: Samsung and GlobalFoundries. Thinks these could provide upside to other foundry capex plans as well. Stock last down 1.2% at HK$63.85.


Source: Dow Jones Newswire

[winston]

Vested.

DJ MARKET TALK: ASM Pacific Fundamentals Remain Solid - Mirae
May 11, 2010

1302 [Dow Jones] STOCK CALL: Mirae Asset says ASM Pacific's (0522.HK) valuation not excessive on P/B; says since 1994, ASM Pacific's accumulated cash dividend amount to HK$31.

Should company retain all its earnings, 2010 book value would balloon to HK$38 which puts stock at mere 1.75X P/B.

"Investors should look at P/E as its earnings are backed up by strong free cash flow and cash dividend (100% payout) and a superior ROE."

Keeps stock at Buy with HK$100 target; notes ASM shares were sold down on concerns of peaking in momentum, potential share loss in Cu-wirebonders.

"We think otherwise as our checks show that fundamentals remain solid and valuations are attractive."


Source: Dow Jones Newswire

[winston]

Vested.

Will Intel's good result flow into this company ?

DJ MARKET TALK: Lenovo +4.3% At Pre-Open; Intel Boost

0941 [Dow Jones] Lenovo (0992.HK) indicated +4.3% at HK$4.60 at pre-open, probably most visible HK-listed tech-related share to benefit from Intel's (INTC) bullish 2Q results, outlook.

Among others, ASM Pacific (0522.HK) bid up 1.2% at HK$63.00.


Source: Dow Jones Newswire

[winston]

Vested. Results out on Wednesday, July 28.

http://www.hkexnews.hk/listedco/listcon ... 712172.pdf