STATS ChipPAC   

StatsChP Q3 earnings

OCBC says it has raised its rating to "buy" from "hold" and increased its fair value for the stock to $1.16 from $1.05 because of the outlook for the company.



In the fourth quarter, the firm expects revenue to rise 1-6% qoq.



OCBC analyst Carey Wong said in note: "Growth drivers are expected to come from the recovery in the PC segment as STATS would be embarking on two new gaming-related programs, although it noted that the communications segment could still see some customers making inventory adjustments."



He added: "While the recovery is nowhere as robust as the traditional double-digit ramp-up, we think that there may not be a big seasonal slowdown in [the] first quarter [of] 2007 either."



OCBC has revised upwards its estimates of net profit for this year by 8.8% to US$72.4m and for next year by 13.2% to US$91.2m.

 

It will continue to cut costs in an effort to hit its target for gross profit margins of 20-25%, even though there are still pricing pressures in the industry, the company said.



The company reported today a net profit of US$18.5m for the third quarter, reversing the net loss of US$1.01m it made a year earlier. Sales rose 31.8% yoy to US$397.11m and margins increased on the back of reduced operating costs, although average selling prices were about 1% lower than in the second quarter, the company said.



Looking ahead, STATS ChipPAC's chief financial officer, Michael Potter, said he expected pricing pressures to continue to be moderate.



"We are in an industry where there is pricing pressure and where it is also competitive, so we have to watch our costs very carefully, where we want to get our gross margins up in line with our competitors," Potter said.



STATS ChipPac's gross margins for the nine months to September were 20.2%, and the company reiterated that its business model can support gross margins of up to 25%.



President and chief executive Tan Lay Koon said that his company would take a three-pronged approach to controlling costs and hitting its target for gross margin.



"We continue to rationalize the product portfolio that we have, and we have identified certain other things that may not be strategic to us," Tan said. He declined to give details.



"We are looking at technology for [a] quantum leap [in] cost improvement, not just in terms of operation efficiency, but looking at what we can use in terms of technology to build existing parts cheaper," he said.



Tan said the company would work on improving operational efficiency to save costs.



The company declined to say when it aimed to hit its target for gross profit margin by.



For the fourth quarter, it expects growth to be flat, with net profit of US$19-26m on sales of US$401-421m, as the weakness in its communications segment is expected to continue to offset gains in its consumer and multi-applications segment.



Even so, this year is expected to be a record year for both revenue and profitability, Tan said.



"[I] am positive in our outlook, given our balanced product portfolio and strategic geographical footprint, technology leadership, function integration and good traction with new customer programs," he said.

 

today may see statschippac break $1.00 resistance.

 

 

   CIMB which has an Outperformance rating on the stock with a TP of $1.21, expects the company to report net profit of US$22.5 millions vs US$1 million loss a year ago.

 

StatschP Q3 out 2molo at 8am (S'pore time). Earnings of tech stocks has been disappointing this quarter! Hope StatschP can pull a fast one.

 

no lah, i only have sph, creative, statschippac, allco reits, frasers reit, biot and cnersave only.....

 

this counter has healthy volume... unfortunately, RSI and Acc/Dist are heading south.

 

Wow! You seem to be interested in quite a few counters ya, Chipchip66?! I am greenish in StatschP (my opinion) and already vested on long term ... Wait & see game from November on.

 

Hi Billywows, Stats chippac went below $1.00 again. I will accumulate more!

 

Now down only 2% in Nasdaq, chipchip66 ... Must be patient cos tech's chiong-time is from November now.

 

Stats Chippac dropped 4.30% now in Nasdaq!! Is it Holloween effect??

 

I think it is a good time to look at this counter now. Will test $1.00 soon.

 

Wonder anything good coming out from below next week .... its during IMF period

---------------------

Press Release

Source: STATS ChipPAC

STATS ChipPAC to Present at JP Morgan Asia Bond Investor Conference
Wednesday September 6, 8:15 am ET

UNITED STATES--(MARKET WIRE)--Sep 6, 2006 -- SINGAPORE -- 09/06/2006 

 

UBS has cut its target price to $1.05 because of limited catalysts in the near-term.



"Given the ongong inventory adjustment, we believe revenue momentum for STATS ChipPAC is likely to remain muted in the near term," UBS said in a note.



It cited weak orders from STATS customers in the wireless handset, local area network (LAN), wireless LAN and PC segments. Hence, UBS said it expects capacity expansion to slow, with the company's capital expenditure this year seen to be flat year-on-year at US$300m.

 

STATSChP is picking up momentum.

 

Looking at the TA charts, it seems like STATSChp is undergoing a correction phase.  Suggest that it is a good time to accumulate.

 

To me, StatschP is an attractive buy now at 1.00 ... this stocks moves in line with semicon stocks. And semicon industry was recently reported to be bottoming out now.

Coming this Christmas, tech stocks will inch up at least 20%. Why am I so confident? Cos tech stocks are oversold for the last 3 months ..... :) Tis my good opinion only - trade with care ya!

 

UBS has lowered its investment recommendation to "neutral" from "buy", citing muted sales. UBS analyst William Dong said in a note to investors he expected third-quarter sales to decline 5% quarter-on-quarter and fourth-quarter sales to rise by 2%. UBS cut its share price target for the stock to $1.15 from $1.22.