Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

Sino American Silicon Products / Equity Bottom-Up

<ul>
<li>Our NAV analysis suggests a target price of 146.5 TWD for Sino-American Silicon Products (SAS), representing a lack of upside from current price.</li>
<li>Sino-American Silicon Products' stake in Global wafers represents 109% of SAS's current market cap. </li>
<li>Two major risk factors on SAS include concerns about a global semiconductor sector downturn combined with increasing hostile political conflict between China and Taiwan. </li>
</ul>


Our NAV analysis suggests a target price of 146.5 TWD for Sino-American Silicon Products (SAS), representing a lack of upside from current price.
Sino-American Silicon Products' stake in Global wafers represents 109% of SAS's current market cap. 
Two major risk factors on SAS include concerns about a global semiconductor sector downturn combined with increasing hostile political conflict between China and Taiwan. 


Sino-American Silicon Products: Increasing Concerns About a Global Semiconductor Downturn

<div class="content-highlight">
<p><a href="https://www.smartkarma.com/entities/sino-american-silicon-products-inc" target="_blank" data-smartkarma-citation="entities:3441:1" rel="noopener">Sino American Silicon Products (5483 TT)</a> currently has a market cap of 97.3 billion TWD (US$3.5 billion). Sino American Silicon Products has a 51.2% stake in <a href="https://www.smartkarma.com/entities/globalwafers-co-ltd" target="_blank" data-smartkarma-citation="entities:17916:1" rel="noopener">Globalwafers (6488 TT), </a>which has a market cap of 326.4 billion TWD (US$11.7 billion).</p>
<p>SAS's 51.2% stake in Globalwafers is currently worth 168.7 billion TWD (US$6.0 billion). In other words, Sino American Silicon Products' 51.2% stake in Globalwafers is nearly twice as high as the former company's entire market cap right now. </p>
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<tr><td colspan="2" style="width: 401pt;"><strong>Sino American Silicon Products' 51.2% stake in Globalwafers (Market Cap Comparison)</strong></td></tr>
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<td></td>
<td style="text-align: center;"><strong>Market Cap (US$ bn)</strong></td>
</tr>
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<td><strong>Sino American Silicon Products</strong></td>
<td style="text-align: center;"><strong>3.5</strong></td>
</tr>
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<td>Globalwafers</td>
<td style="text-align: center;">11.7</td>
</tr>
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<td><strong>Sino American Silicon Products' 51.2% stake in Globalwafers</strong></td>
<td style="text-align: center;"><strong>6.0</strong></td>
</tr>
<tr>
<td>Source: Company data, Yahoo Finance</td>
<td style="text-align: center;"></td>
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</table><div class="content-highlight"><p><strong>Our NAV analysis suggests a target price of 232 TWD for Sino American Silicon Products, representing a 40% upside from current price. </strong></p></div>


Sino American Silicon Products (5483 TT) currently has a market cap of 97.3 billion TWD (US$3.5 billion). Sino American Silicon Products has a 51.2% stake in Globalwafers (6488 TT), which has a market cap of 326.4 billion TWD (US$11.7 billion).
SAS's 51.2% stake in Globalwafers is currently worth 168.7 billion TWD (US$6.0 billion). In other words, Sino American Silicon Products' 51.2% stake in Globalwafers is nearly twice as high as the former company's entire market cap right now. 






Sino American Silicon Products' 51.2% stake in Globalwafers (Market Cap Comparison)


Market Cap (US$ bn)


Sino American Silicon Products
3.5


Globalwafers
11.7


Sino American Silicon Products' 51.2% stake in Globalwafers
6.0


Source: Company data, Yahoo Finance



Our NAV analysis suggests a target price of 232 TWD for Sino American Silicon Products, representing a 40% upside from current price. 

Sino-American Silicon Products - Its Majority Stake in Globalwafers Is Worth More Than Its Mkt Cap

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<p><a href="https://www.smartkarma.com/entities/sino-american-silicon-products-inc" target="_blank" data-smartkarma-citation="entities:3441:1" rel="noopener">Sino American Silicon Products (5483 TT)</a>  is a Taiwan-based company mainly engaged in the research, development, design, manufacture, and distribution of semiconductor wafer products with subsidiaries in both listed and unlisted companies including <a href="https://www.smartkarma.com/entities/globalwafers-co-ltd" target="_blank" data-smartkarma-citation="entities:17916:1" rel="noopener">Globalwafers (6488 TT)</a> , <a href="https://www.smartkarma.com/entities/parade-technologies-ltd" target="_blank" data-smartkarma-citation="entities:6987:1" rel="noopener">Parade Technologies (4966 TT)</a> , <a href="https://www.smartkarma.com/entities/actron-technology-corp" target="_blank" data-smartkarma-citation="entities:4989:1" rel="noopener">Actron Technology (8255 TT)</a> and <a href="https://www.smartkarma.com/entities/advanced-wireless-semiconduc" target="_blank" data-smartkarma-citation="entities:16559:1" rel="noopener">Advanced Wireless Semiconduc (8086 TT)</a> with only in Globalwafers - SAS owns more than 51%.</p>
<p>The large discount between SAS and its subsidiaries could be due to 1) lack of bulge-bracket coverage, 2) higher polysilicon price 3) and 3) weak 1H demand from the solar and the semiconductor from COVID-19 plague which caused investors to care less about the value dislocation between SAS and its subsidiaries.</p>
<p>With a somewhat certain 28-30% gain in the earning as early Q1 2022, investors should start slowly building positions in SAS as the risk-off beast may disturb the confidence in the equity market much longer than what investors would like. The second scenario of increasing stake in Parade Tech should be treated as a call option as when it happens, it is a bonus of another 24%. Thus the total upside could be around 54%. </p>
<div class="content-highlight">
<p>Besides the above-mentioned reasons, <a href="https://www.smartkarma.com/entities/sino-american-silicon-products-inc" target="_blank" data-smartkarma-citation="entities:3441:1" rel="noopener">Sino American Silicon Products (5483 TT)</a> remains a smart way to gain exposure in Globalwafers which trades at 24x PER, compared to SAS that trades at 13x PER. The other factor is that Globalwafers dividend yield is 2.28% while SAS is 5.22%. </p>
</div>

Sino American Silicon Products (5483 TT)  is a Taiwan-based company mainly engaged in the research, development, design, manufacture, and distribution of semiconductor wafer products with subsidiaries in both listed and unlisted companies including Globalwafers (6488 TT) , Parade Technologies (4966 TT) , Actron Technology (8255 TT) and Advanced Wireless Semiconduc (8086 TT) with only in Globalwafers - SAS owns more than 51%.
The large discount between SAS and its subsidiaries could be due to 1) lack of bulge-bracket coverage, 2) higher polysilicon price 3) and 3) weak 1H demand from the solar and the semiconductor from COVID-19 plague which caused investors to care less about the value dislocation between SAS and its subsidiaries.
With a somewhat certain 28-30% gain in the earning as early Q1 2022, investors should start slowly building positions in SAS as the risk-off beast may disturb the confidence in the equity market much longer than what investors would like. The second scenario of increasing stake in Parade Tech should be treated as a call option as when it happens, it is a bonus of another 24%. Thus the total upside could be around 54%. 

Besides the above-mentioned reasons, Sino American Silicon Products (5483 TT) remains a smart way to gain exposure in Globalwafers which trades at 24x PER, compared to SAS that trades at 13x PER. The other factor is that Globalwafers dividend yield is 2.28% while SAS is 5.22%. 


Sino American Silicon (5483): Entry to Globalwafers and Others

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Will Semiconductor   Shan / Technical Analysis

<p>New developments suggest caution is warranted, and leads us to believe the mixed market environment is poised to continue. The new and concerning developments include widening high yield spreads in the U.S. and Europe and improving relative strength for defensive Sectors -- both are clear signs of risk aversion. At the same time, global indexes remain above critical support levels; until this changes our neutral outlook remains appropriate.</p>

New developments suggest caution is warranted, and leads us to believe the mixed market environment is poised to continue. The new and concerning developments include widening high yield spreads in the U.S. and Europe and improving relative strength for defensive Sectors -- both are clear signs of risk aversion. At the same time, global indexes remain above critical support levels; until this changes our neutral outlook remains appropriate.

Global Equity Strategy: Reason For Caution; Actionable Themes: Services/Technology & Staples

Shenzhen Stock Exchange Composite Index / Technical Analysis

<p>China (MSCI China, Shenzhen A Share) offers a plethora of attractive setups and is a major focus in today’s report. Taiwan (TAIEX) is another focus as it is one of the few global indexes that is not yet breaking down. Lastly, Turkey (ISE National 100) appears to offer an attractive pullback opportunity. Within EM, we highlight attractive opportunities across the technology, consumer discretionary, health care and communications sectors.</p>

China (MSCI China, Shenzhen A Share) offers a plethora of attractive setups and is a major focus in today’s report. Taiwan (TAIEX) is another focus as it is one of the few global indexes that is not yet breaking down. Lastly, Turkey (ISE National 100) appears to offer an attractive pullback opportunity. Within EM, we highlight attractive opportunities across the technology, consumer discretionary, health care and communications sectors.

Taiwan

Sino-American Silicon Products Inc. supplies silicon-based products, including silicon lapped wafer, silicon diffusion wafer, silicon ingot, silicon diffused diode chip, and automobile rectifier.  The Company sells its products worldwide.

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Sino American Silicon Products (5483 TT)

Sino-American Silicon Products: Increasing Concerns About a Global Semiconductor Downturn

Our NAV suggests a target price of NT$146.5 for Sino-American Silicon Products, representing a lack of upside from current price. A downturn in the...

Douglas Kim

Sino-American Silicon Products - Its Majority Stake in Globalwafers Is Worth More Than Its Mkt Cap

Our NAV analysis suggests a target price of 232 TWD for Sino American Silicon Products, representing a 40% upside from current price.

Douglas Kim

Sino American Silicon (5483): Entry to Globalwafers and Others

Sino American Silicon remains a smart way to gain exposure in Globalwafers (24x PER), compared to SAS (13x PER). The other factor is that...

Henry Soediarko

Global Equity Strategy: Reason For Caution; Actionable Themes: Services/Technology & Staples

With interest rates expected to move sideways to lower, we recommend a mix of growth and defensive Sectors. Today we focus on Services/Technology...

Vermilion Research

EM Outperforming; Favor EM over EAFE

China (MSCI China, Shenzhen A Share) offers a plethora of attractive setups and is a major focus in today’s report. Taiwan (TAIEX) is another focus...

Vermilion Research

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