It sounds like Q1 will be sequentially down as expected. I heard a comment that current utilitzation is 30% which implies a quarterly run rate of $270m. I suspect orders will increase later in the quarter. I also heard that management is confident about reaching full capacity in Q3 and Q4.
My sales forecast is as follows:
2013 total: $2,600
At the midpoint GM of 6.5% and SGA flat at 2% of sales, net margin will be around 4.5%
2013 profit $117m or $2.60 per share.
These results will represent YoY sales growth of 126% and profit growth of 75% and does not take into consideration other income.
I think a PE of 10 is in order for a high growth EMS company, which implies a share price target of $26 by end of the year.
He said "Right Now". 30%, but we are in Chinese New Year. Chinese New Year is next week. Most companies shut down for a solid 2 to 3 weeks. NTE might be in partial shut down mode right now. I think people are confused on this interpretation. Also, Q1 rates will on average be lower than Q4 anyways do to seasonality. Their is this thing called Christmas that has a tendancy to show up in Q4.
What was clear was that he said their is no orders cut for NTE, and even if orders were cut by end customer, it would not affect NTE because they are running under the customers requested capacity. i.e., they are one of the prefered suppliers and another suppler would be cut first. MaybeSsamsung?????? Or the other Korean company, LG? Hmmmm....
This is seasonality. The market is confused.
as I don't think they will be already fully ramped at the beginning of Q3 - Q2 revenue estimate might also be a little bit to high here - so a more conservative approach will most likely arrive at 2013 eps between $2 and $2.50 a share.
Looking at the calculation offered by Valuable Insights they modeled 2013 revenues even more conservative but were too optimistic on the gross margin so they will have to take down their eps estimates accordingly. Their margin assumptions for 2014 are even higher so some remodeling needs to be done here.
Gross margin guidance looks really disappointing here but will most likely prove conservative as I don't think they will go down from 10.5% all the way to 7% within a few quarters so there might be room for some upside here.
Things are playing out pretty much as expected here as NTE clearly will feel some Apple related pain at least in Q1. Also they obviously decided to trade some margin for additional business here as they still plan to reach full factory utilization somewhere in 2H2013.
Given that the company now most likely will come in below the estimates of Valuable Insights (remember the stock was up 10% due to the article) for 2013 (and perhaps also for 2014), the disappointing margin guidance and a rather slow Q1 the stock might stay under pressure for some more days here.
At $12 the stock offers an attractive 5% dividend yield but temporarily the stock might dive deeper - perhaps close to $10 mark as disappointed investors move to the sidelines or take some well deserved profits here.
But there might be some catalysts going forward, e.g. the initiation of some analyst coverage or another positive seekingalpha feature by Valuable Insights. As a long term investor I wouldn't sell here as the stock should recover over time but I wouldn't bet on lofty $40 price targets anymore.
For the short term trader the stock looks like a great short opportunity as the stock has been on the retreat the whole session on huge volume with more selling pressure likely going forward. Would cover at around $11.
As usual, I think exactly the opposite as hagen.
We're now at a PE of 9 and a forward PE of around 4 or 5, with a 5% dividend. If you take out cash, it gets even more ridiculous. Cash plus fixed deposits = $4.60 / share, which leaves the share price $8.40 / share excluding cash. PE ex. cash is 5.75, and forward PE ex. cash is around 3.
That's with a growing company with a 5% dividend, and the dividend is likely to rise. They've paid high dividends for most of their history and now have both high cash and profits. That's also not taking into account the land that is potentially worth hundreds of millions of dollars.
Today is panic selling based on the mistaken belief that GM will hit 7%, and based on Apple suddenly being less fashionable. Last quarter Koo said that GM would be around 7%, and what happened? It went up substantially. He has always been conservative -- it's a cultural thing.
He was sandbagging, and will probably continue to sandbag. Incidentally, a company with rapidly rising revenue that's trimming unprofitable market segments such as FPCB etc. does not generally have dropping margins. However, even if margins do drop, they expect to reach full capacity in the second half of the year. Do you really think they won't be able to make as much or more in a $900M revenue quarter as they did in this $465M quarter?
This is a hiccup that will soon disappear after the panic is gone. Other similar companies have a large number of analysts while Nam Tai has none, and once we see some coverage this price won't last. As memoryxpert pointed out earlier, Brian White was on the call and covered Nam Tai in the past. I expect he'll initiate coverage soon.
Sentiment: Strong Buy
Are you crazy? A P/E of 3?
Why do you think it would be so high?
I'm thinking a little over a P/E of 1, MAYBE 2....
Of course, you have to discount the cash.
The land, building, machinery and equipment is worth MAYBE $.05 on the dollar, purely scrap value only.
So I think NTE might be a good buy at $4-$5/share.
I've got some great bridges to sell too!
Just send me your money, and I'll mail you the title!