ChipMOS: Undervalued Despite Unfavorable Merger Agreement
Overbet For Value • 51 Comments
Overbet For Value • 51 Comments
ChipMOS Shareholders Should Be Rewarded... Finally
Dane Capital Management, LLC • 37 Comments
Dane Capital Management, LLC • 37 Comments
ChipMOS: Oligopoly At 4x EBITDA, 8x EPS With Pending Buyback - A Holiday Gift
Dane Capital Management, LLC • 109 Comments
Dane Capital Management, LLC • 109 Comments
Mon, May 16, 2:38 PM
- ChipMOS' (IMOS +0.8%) Taiwanese subsidiary (ChipMOS Taiwan) has obtained two credit lines with a total value of NT$13.2B ($409M). Both feature floating interest rates; they'll be used to refinance bank debt and for "general corporate purposes."
- ChipMOS' U.S.-listed unit had $370M in cash and $232M in bank loans as of the end of 2015. The merger of the company's U.S. and Taiwan-listed units is due to close in Q3.
Thu, May 12, 4:17 PM
Thu, Mar. 10, 6:38 PM
- ChipMOS (NASDAQ:IMOS) has used its Q4 report to guide for to guide for a low-single digit Q/Q Q1 revenue drop, and for 2016 revenue to be flat to up single digits relative to 2015. The 2-analyst consensus is for revenue to drop 1% Q/Q in Q1 to $143.7M, and rise 3% in 2016 to $627.2M.
- Though officially beating consensus, Q1 revenue of $145M (-18% Y/Y) was telegraphed via monthly sales reports. Meanwhile, official EPS of $0.07 (missing by $0.26) saw a $0.20 hit from $6.1M in extra income tax expenses and $2M in expenses related to the planned merger of ChipMOS' U.S. and Taiwan-listed units.
- Gross margin fell to 19.2% in Q4 from 25.2% a year ago, but was above initial guidance of 14%-18%. Q1 GM guidance is at 17%-21%, and full-year guidance at 16%-20%. ChipMOS expects to spend $129M on capex in 2016, partly on capacity expansion at ChipMOS Shanghai; $111.1M was spent on capex in 2015.
- ChipMOS has also reported February revenue of $45.1M, down 6.5% M/M (hurt by two fewer days relative to January) and 9.3% Y/Y. The annual decline narrowed slightly from January's 10.7%.
- CEO S.J. Cheng predicts 4KTV growth and improving macro conditions will drive a 2016 sales rebound. "There is a dramatic multiplier effect, whereby 4K2K TVs require significantly higher driver content per TV, with 4K2K sets requiring over 2X as many LCD drivers as a typical HD TV. We are also optimistic about the healthier channel inventory of the DRAM and smartphone markets, which will help a recovery in 2016."
- Shares haven't yet moved after hours.
- ChipMOS' Q4 results, earnings release
Thu, Mar. 10, 5:03 PM
Tue, Feb. 16, 3:05 PM
- Plenty of tech companies are posting outsized gains on a day the Nasdaq is up 2%. Not surprisingly, many of the standouts are companies that have been hammered since New Year's.
- Notable gainers include action camera leader GoPro (GPRO +12.9%) and GoPro video processor supplier Ambarella (AMBA +6.2%), threat-prevention tech provider FireEye (FEYE +11.2%), supercomputer maker Cray (CRAY +19.5%), chip packaging/testing firm ChipMOS (IMOS +17.8%), point-of-sale hardware/software firm NCR (NCR +9.7%), Web hosting/domain registration firm GoDaddy (GDDY +9%), and driver-assistance system provider Mobileye (MBLY +7.4%). FireEye fell on Friday in the wake of its Q4 report.
- Other big gainers: RF chipmakers Skyworks (SWKS +6.4%) and Qorvo (QRVO +8.9%), 4G modem/M2M module maker Sierra Wireless (SWIR +8%), microcontroller/flash memory maker Cypress Semi (CY +7.5%), microphone maker Knowles (KN +8%), inventory-tracking hardware firm Zebra Technologies (ZBRA +8.5%), cloud HR software firm Paylocity (PCTY +7.8%), cloud collaboration/chat software firm Atlassian (TEAM +10.5%), touch controller/display driver vendor Synaptics (SYNA +7.8%), and online P2P lender LendingClub (LC +14.2%). LendingClub rallied last week after posting a Q4 beat and announcing a $150M buyback.
- Previously covered: Solar stocks, Chinese tech stocks, Groupon, Sonus, Black Box, Canadian Solar, Palo Alto Networks, Qualcomm
Fri, Feb. 12, 9:59 AM
- ChipMOS (IMOS -7.2%) reports January revenue of $47.9M, +1.7% M/M and -10.7% Y/Y. The annual decline narrowed from the 17.4% reported for December and the 18% reported for the whole of Q4.
- The company adds it resumed normal operations on Feb. 6 following "only a very minor impact at its manufacturing operations in the Tainan Science Park following the earthquake earlier that day."
- Shares have made new 52-week lows. They fell last month after ChipMOS announced its U.S. and Taiwan-listed units are merging.
Thu, Jan. 21, 10:42 AM
- Though the deal's official price involved a premium to Wednesday's close, ChipMOS' (NASDAQ:IMOS) U.S.-listed arm (ChipMOS Bermuda) has sold off following news the unit is merging with ChipMOS' Taiwan-listed unit (ChipMOS Taiwan) in a deal for which most of the payout to ChipMOS Bermuda holders consists of shares in a new ChipMOS Taiwan ADS.
- Shares now go for 11x a 2016 EPS consensus of $1.59. Q4 results are expected in the coming weeks.
Thu, Jan. 21, 8:17 AM
- ChipMOS Bermuda shareholders will receive $3.71/share in cash + 0.9355 newly-created ChipMOS Taiwan ADS'. that will trade on the Nasdaq The deal is expected to close in Q3.
- ChipMOS: "The merger is consistent with the ongoing efforts to simplify and streamline the group structure, reduce operating costs in order to enhance operation efficiency, and achieve a more efficient tax structure."
- The agreement follows a December deal to sell a 25% stake in ChipMOS Taiwan to China's Tsinghua Unigroup. Chip packaging/testing peer Siliconware (NASDAQ:SPIL), which has its own deal to sell a stake to Tsinghua (and is contending with ASE's efforts to acquire the company), will own a 17.6% post-merger stake in ChipMOS Taiwan.
- IMOS hasn't yet moved premarket.
Fri, Jan. 8, 9:50 AM
- ChipMOS (IMOS +3.3%) had December revenue of $48M, down fractionally M/M and 17.4% Y/Y. The annual decline improved a bit from November's 19.1%.
- For the whole of Q4, revenue totaled $145M, -1.5% Q/Q and -18% Y/Y. That's above a 2-analyst consensus of $142.5M, and guidance (issued in November) for a 4%-9% Q/Q revenue drop. ChipMOS also expects Q4 gross margin to be above a prior guidance range of 14%-18%.
- Shares are rallying on a morning the Nasdaq is up 1%.
Dec. 11, 2015, 11:53 AM
- ChipMOS (NASDAQ:IMOS) has rallied towards $20 following news China's state-controlled Tsinghua Unigroup is buying a 25% stake in ChipMOS' Taipei-listed unit for $368.3M.
- Meanwhile, Taiwanese chip packaging/testing peer Siliconware Precision (NASDAQ:SPIL) has struck a similar deal with Tsinghua. Tsinghua is buying 1.03B of Siliconware's Taipei-listed shares for NT$55 apiece (a 21% premium to today's close). Tsinghua's purchase price is equal to $1.65B, and gives it a 24.9% stake.
- As with ChipMOS, Tsinghua will partner with Siliconware to help the latter grow its Chinese operations, and expand its sales to local firms. Siliconware also plans to "explore vertical integration with suppliers of major packaging and testing materials to secure a stable, high-quality supply," and invest in expanding its Taiwanese chip packaging and R&D ops.
Dec. 11, 2015, 9:22 AM
- State-owned Tsinghua Unigroup is continuing its chip investment/acquisition spree by acquiring a 25% stake in Taipei-listed ChipMOS Taiwan for NT$12B ($368.3M) at a price of NT$40/share (24% above today's close in Taipei).
- Following the deal, U.S.-listed ChipMOS Technologies (NASDAQ:IMOS) will own 43% of ChipMOS Taiwan, down from a current 58%. The investment comes with a "Strategic Alliance Agreement" through which Tsinghua "will assist ChipMOS Taiwan in expanding and strengthening the relationship between ChipMOS Taiwan and companies relating to the assembly and testing services of LCD drivers and wafer bumping services in Mainland China, and will introduce other potential suppliers, customers and business partners in Mainland China to ChipMOS Taiwan."
- ChipMOS hasn't yet moved premarket.
- Last month: Tsinghua aims to build chip empire
Nov. 12, 2015, 6:49 PM
- ChipMOS' (NASDAQ:IMOS) Q3 EPS benefited from a $10M ($0.35/share) forex gain. Excluding the gain, EPS was $0.13, below a $0.22 2-analyst consensus.
- Q3 revenue was telegraphed via monthly sales reports. Q4 guidance is for a 4%-9% Q/Q revenue drop. Though declared to be better than a standard 10% seasonal decline, the guidance implies a revenue range of $133.2M-$140.5M, below a $146.2M 2-analyst consensus and down from $183.4M a year ago.
- CEO S.J. Cheng: "Inventory continues to be digested in the channel but it will take time to get to a healthy level as LCD panel companies balance lower panel ASPs. The market situation has resulted in some idle capacity in our Taiwan facilities, which we plan to use to support demand that would have required a more immediate expansion of our Shanghai facility. We are continuing discussions around a potential expanded business venture in China but with more of a longer-term focus..."
- Q3 details: Chip testing was 26% of revenue, chip assembly 32%, LCD driver testing/assembly 27%, and wafer bumping 15%. Utilization rate fell to 65% from Q2's 68%. Gross margin was 18.1%, down from Q2's 22.4% and Q3 2014's 25.8% but in-line with guidance of 17%-21%. Q4 guidance is at 14%-18%. GAAP operating expenses (exc. the "Other" segment) rose by $1.2M Y/Y to $12.3M.
- Shares haven't yet traded after hours, save for a 100-share trade at 4:00:58 that occurred 2.8% below today's close.
- Q3 results, PR
Nov. 12, 2015, 4:03 PM
- ChipMOS (NASDAQ:IMOS): Q3 EPS of $0.48 may not be comparable to consensus of $0.22.
- Revenue of $146.4M (-23.2% Y/Y) in-line.
Oct. 14, 2015, 3:10 PM
- Though still well below its May/June highs, the Philadelphia Semi Index (SOXX +2.9%) has reached its highest levels since August following calendar Q3 results from Intel, Linear Technology, and ASML, and reports SanDisk and Fairchild are in buyout talks with potential suitors (respectively Micron/Western Digital and ON Semi/Infineon). The Nasdaq is down slightly.
- Intel (up 1.5%) beat Q3 estimates and provided in-line Q4 guidance. ASP strength and signs of stabilizing PC demand are overshadowing a full-year guidance cut for Intel's server CPU division, Linear (up 4.6%) posted mixed FQ1 results and issued above-consensus FQ2 guidance.
- Lithography equipment giant ASML (ASML -0.4%) beat Q3 EPS estimates and posted nearly in-line sales, but also guided for Q4 revenue of €1.4B ($1.61B), below a $1.77B consensus. Soft demand from foundry clients is blamed. Credit Suisse and Cowen argue ASML is hurt by a lack of exposure to the 3D NAND flash ramp.
- Aside from Linear and companies associated with the SanDisk/Fairchild reports, chipmakers seeing big gains include NXP (NXPI +4.6%), Freescale (FSL +3.6%), Himax (HIMX +4.2%), Qorvo (QRVO +4.9%), Cypress (CY +6.9%), AppliedMicro (AMCC +4.9%), and Linear/Fairchild peers Semtech (SMTC +4.7%), MangaChip (MX +4.6%), Diodes (DIOD +4%), and Power Integrations (POWI +4.2%). Chip packaging/testing firms ChipMOS (IMOS +3.8%) and Amkor (AMKR +5.9%) are also rallying.
- With much already priced in, chip equipment makers are also doing well, in spite of ASML's guidance, a fresh $400M cut to Intel's 2015 capex budget (to $7.3B), and a Gartner forecast for global wafer fab equipment spend to drop 0.5% in 2015 and 2.5% in 2016 before returning to growth.
- Chip equipment gainers include Lam Research (LRCX +3.6%), KLA-Tencor (KLAC +1.6%), Kulicke & Soffa (KLIC +3.3%), and Teradyne (TER +1.9%). Possibly helping: Intel stated on its earnings call its capex will rise in 2016 from 2015's depressed levels.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Sep. 10, 2015, 2:47 PM
- With a chip industry inventory correction taking a toll, ChipMOS (IMOS -0.3%) had August revenue of $48.9M, -2.9% M/M and -18.7% Y/Y. The annual decline was larger than July's 15.8%.
- Near-term sales expectations were already low, particularly following the light Q3 guidance ChipMOS provided a month ago. Shares are down modestly on a day the Nasdaq is up 1.1%.
Aug. 21, 2015, 9:23 AM
- With Advanced Semiconductor Engineering (NYSE:ASX) buying up to 25% of Siliconware Precision Industries (NASDAQ:SPIL) at a healthy premium, Seeking Alpha contributor Dane Capital Management says ChipMOS (NASDAQ:IMOS) should be very much on watch.
- Even at a sizable premium, a purchase by almost any larger competitor would be tremendously accretive, says Dane, and IMOS' huge net cash position and tremendous cash flow makes funding a deal an easy task.
- Previously from Dane Capital: ChipMOS: Oligopoly At 4x EBITDA, 8x EPS With Pending Buyback - A Holiday Gift
- SPIL +23.55% premarket to $6.40.
ChipMOS Technologies (Bermuda) Ltd. is a holding company that engages in the research and development, manufacturing, assembly, and testing of semiconductors. It operates through the following segments: Testing, Assembly, Liquid Crystal Display (LCD), and Bumping. The Testing segment provides... More
Industry: Semiconductor Equipment & Materials
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