Equity Analyst, LightStream Research

Farha Sabri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul><li>Revenue and operating profits to soar on the back of increased wafer prices. Sumco has planned a 20% price hike in FY12/18 and we expect revenue to grow by 20.8% YoY and OPM to improve from last year’s levels. We expect the OPM to improve to approximately 16.5% in the current fiscal year.</li><li>Sumco plans to increase production capacity for 300mm wafers gradually. The company is still skeptical about capacity expansion for 200mm wafers. As such, this segment does not presently have any expansion plans.</li><li>Sumco seems to be undervalued with our estimates showing a FY1 PE of 24.3x, below the company’s historical median as well as peer multiples.</li></ul>

Revenue and operating profits to soar on the back of increased wafer prices. Sumco has planned a 20% price hike in FY12/18 and we expect revenue to grow by 20.8% YoY and OPM to improve from last year’s levels. We expect the OPM to improve to approximately 16.5% in the current fiscal year.Sumco plans to increase production capacity for 300mm wafers gradually. The company is still skeptical about capacity expansion for 200mm wafers. As such, this segment does not presently have any expansion plans.Sumco seems to be undervalued with our estimates showing a FY1 PE of 24.3x, below the company’s historical median as well as peer multiples.

Sumco Benefits from Rebound in Wafer Prices Following Demand-Supply Mismatch

SUMCO Corp

Sumco Benefits from Rebound in Wafer Prices Following Demand-Supply Mismatch