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Universal Display Corp. Message Board

rul4king 13 posts  |  Last Activity: Jan 26, 2015 3:11 PM Member since: Jul 4, 2010
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  • Reply to

    Confused Investors

    by pitchnputt017 Jan 26, 2015 2:39 PM
    rul4king rul4king Jan 26, 2015 3:11 PM Flag

    Back in August 2011 when UDC announced their contract with Samsung the week of Aug 22 – Aug 26 UDC’s stock went up from $27.92 to $51.71 or 85.2%.

    85.2% for a seven year contract that paid a beginning licensing fee of $10 million for 2011 and material sales to Samsung of about $21.3 million for a total of $31.3 million. In 2015 the licensing fee will be approx. $60 million.

    Today UDC announced an eight year agreement with LG. While the details have not been revealed as they were not with Samsung I would expect UDC’s agreement with LG to be as lucrative as Samsungs, why is UDC up only 5% today?

    During the week of Aug 22 the stock went up double digits 4 out of 5 days. Where are the analysts’ stock upgrades? Could it be they are encouraging their clients to by as they will upgrade tomorrow?

    After all this announcement should be a major milestone.

    Sentiment: Strong Buy

  • Reply to

    What percentage of OLED material cost in a TV?

    by abqnorseman Jan 21, 2015 12:35 PM
    rul4king rul4king Jan 21, 2015 3:12 PM Flag

    Analysis that I put on the message board December 18th see full analysis on that date.

    Ever since Samsung Display (SDC) signed their licensing agreement with UDC, people have been questioning when is LG going to sign a similar agreement?
    Simply put it will happen when it is economically feasible for LG to sign.
    SDC has agreed to pay an escalating licensing fee and purchase minimum quantities of materials. The fee for 2014 is $50 million up from 2013’s $40 million and most likely will increase in 2015 to approx. $60 million. In exchange for these conditions, SDC does not pay a royalty and receives discounts based on purchasing milestones. The amount SDC pays is substantially less than the prices LG and others pay. According to my calculations this amounts to a 60% reduction. Therefore materials that LG pays $1 for SDC only pays $.40.
    In 2013 UDC’s revenue from LG was $13.2 million and in 2014 LG purchased $29.7 million through the 3rd qtr. and when the 4th qtr is added in will approx. $40 million. Had LG signed a similar contract as SDC in 2014 they would have paid UDC $50 million in licensing only to have saved 60% of $40 million or $24 million in savings. Obviously no company is going to spend $50 million to save only $24 million, so they didn’t sign in 2014.
    2015 is a different story however, the license fee goes up to $60 million. Breakeven for a 60% savings on a fee of $60 million would amount to $100 million at current pricing.
    Will LG purchase at least $100 million in 2015? At first glance it would seem to be a tall task. But in looking at the increase from 2013, $13.2 million to 2014, $40 million we see a tripling of sales. To triple again in 2015 would result in sales of $120 million.
    While I expect the small screen production to increase some, Apple I Watch, the big increase will come in the production of TV screens on the new Gen 8 plant.

    Sentiment: Strong Buy

  • Reply to

    UDC and Samsung

    by bcarnovale22 Jan 14, 2015 9:41 AM
    rul4king rul4king Jan 14, 2015 2:55 PM Flag

    On the cheaper screens they maybe using flourescent green to save money.

  • Reply to

    Funny-----

    by skimer99 Jan 7, 2015 10:09 AM
    rul4king rul4king Jan 7, 2015 4:00 PM Flag

    The sales volumes that Samsung purchased is not an accurate gauge.

    See my analysis December 18th in message "Is ZikZak still around??" in which I go through the numbers.

    I believe there's a good chance of LG signing sometime this year.

  • Reply to

    Funny-----

    by skimer99 Jan 7, 2015 10:09 AM
    rul4king rul4king Jan 7, 2015 3:39 PM Flag

    oledclimber,

    That's about the average margin management has said for emitters as the commoditized hosts are 40 - 50%. A lot depends on the customer as Samsung gets price breaks under their agreement. On top of that there is old red and old green vs. new red and new green.

    Since LG has not signed a contract and therefore pays more as they ramp up purchases compared with Samsung's purchases margins may increase until LG signs an agreement.

  • Reply to

    Performance of GLPI since inception

    by rul4king Jan 5, 2015 3:16 PM
    rul4king rul4king Jan 5, 2015 4:05 PM Flag

    One opportunity that I believe that, while risky, would provide significant upside potential is that of the Revel Casino in Atlantic City, New Jersey (Out of the Box thinking)

    Prior to the 2008 recession and Atlantic City’s downturn PENN tried to obtain land in which to build a resort style casino in Atlantic City (AC). One such attempt was to offer approx. $800 million for Bader Airfield. Had they purchased the field off the city PENN would have built an upscale resort on a portion of the property.
    This facility would be similar to Borgota Casino, Revel Casino and the M resort, in Nevada that PENN later acquired.

    Penn never purchased the field but former executive Kevin Desantis went on to develop the Revel Casino. Revel failed for several reasons 1) lack of revenue and 2) excessive costs.

    Revenue

    The Atlantic City market is saturated and therefore any participant needs to have a resort to bring in people from a wide area. The problem with Revel was that it was a stand-alone casino with no rewards from other casinos. When PENN bought the M Resort they were going to market that resort with sister facilities in other states. Not only does GLPI have the Perryville facility and maybe the Meadows Racino they have a working relationship with Penn which has 9 facilities within a 500 mile radius.

    Costs

    Revel spent $2.4 billion building the facility and had a third party spend $129 million on the construction of a power plant. Since this project was considered risky with little equity the interest rates are astronomical. Even though through bankruptcy the construction of the casino bonds have been reduced they still amount to over $100 million per year, power plant bonds are such that they are paying approx. $25 million (double Borgota’s) and Atlantic City will eventually reduce real estate taxes by as much as $20 million. Approx. $120 million in those 3 costs would go a long way towards turning around this property.

    Sentiment: Hold

  • GLPI was split off Penn National Gaming in order to pursue an aggressive growth agenda.

    Management in prospectus and 2013 corporate reports,

    “We believe that a number of gaming operators would like to de-lever or are seeking liquidity while continuing to generate the benefits of continued operations, which may present significant expansion opportunities for us to pursue. Of particular significance, we believe that a number of gaming operators would be willing to enter transactions designed to monetize their real estate assets (i.e., gaming facilities) through sale-leaseback transactions with an unrelated party not perceived to be a competitor.”

    In a Barron’s article October 7 2013,

    “It (GLPI) should have little trouble finding attractive targets; privately Penn management has said it received many expressions of interest from potential sellers.” “The REIT is expected to spend $500 million on new properties in its first year”.

    Now we’re out 14 months lets see how these, first year’s forecasts compare with actual results.

    In late 2013 GLPI bought the Queen Casino property for $140 million and a loan of $43 million, with a portion of the loan repaid.

    Having not found any transactions initiated by potential sellers they made an unsolicited offer to the Meadows Racino for $465 million including the operations as well as real estate property. The management team, having negotiated numerous casino transactions knows of the need to conduct a through due diligence prior to consummating the offer. Apparently they relied on bogus numbers provided by the seller that has led to a lawsuit.

    Meanwhile according to management they are pursuing transactions that provide favorable terms. They are going to have to produce results or the stock price with remain low because to date they have underperformed.

    Sentiment: Hold

  • rul4king rul4king Dec 30, 2014 11:43 AM Flag

    " Shifting to QD LCD TVs would allow the vendors to maintain influence in the TV segment as they continue to develop OLED TV technology."

    That's basically what I said. They'll maintain market share (tread water) until OLED is profitable in large number of units.

    Sentiment: Strong Buy

  • rul4king rul4king Dec 30, 2014 10:32 AM Flag

    LG’s QDot strategy

    Imagine you’ve been promoted to the position of product manager of LG’s television sales. In 2013, shipments of LCD TVs worldwide of 220.5 million units represented 97.3% of a total 226.7 million total units. In LG what you’ve inherited is shipments of 31.7 million LCD TV’s for 2013. At best, in the next 18 months, you will have a production capacity of 2 million OLEDs. Clearly you must ship, profitably, approx. 30 million LCD TV’s.

    LCD’s have been increasingly becoming a commodity with slim profit margins as Chinese manufacturers increase their market shares.

    Samsung, your main Korean competitor, had hopes of rapidly ramping up the production of OLEDs using a complex manufacturing design. When this design proved not competitive, as compared with your design they needed to find a temporary fix until they could redesign their OLED models. Enter the QDot version of LCD TVs. This enhancement of LCDs is similar to Apple’s marketing of retina displays. Apple couldn’t use OLEDs in their smart phones so they marketed their screens as retina, enhanced LCDs, that were almost as good as OLED.

    LG is fighting back with it’s own version of QDot’s as an intermediate quality of TV, to maintain market share. This will be priced between the higher priced OLED and lower priced LCD and hopefully produce better profit margins.

    Eventually as economies of scale takes place OLED will prevail.

    Sentiment: Strong Buy

  • Reply to

    Is ZikZak Still Around????

    by tenpenny227 Dec 18, 2014 8:10 AM
    rul4king rul4king Dec 18, 2014 4:16 PM Flag

    jmuronis,

    I agree with you that we will see an LG contract in 2015. Following is an analysis that I did regarding an LG Contract.

    Ever since Samsung Display (SDC) signed their licensing agreement with UDC, people have been questioning when is LG going to sign a similar agreement?

    SDC has agreed to pay an escalating licensing fee and purchase minimum quantities of materials. The fee for 2014 is $50 million up from 2013’s $40 million and most likely will increase in 2015 to approx. $60 million. In exchange for these conditions, SDC does not pay a royalty and receives discounts based on purchasing milestones. The amount SDC pays is substantially less than the prices LG and others pay. According to my calculations this amounts to a 60% reduction. Therefore materials that LG pays $1 for SDC only pays $.40.

    In 2013 UDC’s revenue from LG was $13.2 million and in 2014 LG purchased $29.7 million through the 3rd qtr. and when the 4th qtr is added in will approx. $40 million. Had LG signed a similar contract as SDC in 2014 they would have paid UDC $50 million in licensing only to have saved 60% of $40 million or $24 million in savings. Obviously no company is going to spend $50 million to save only $24 million, so they didn’t sign in 2014.

    2015 is a different story however, the license fee goes up to $60 million. Breakeven for a 60% savings on a fee of $60 million would amount to $100 million at current pricing.
    Will LG purchase at least $100 million in 2015? At first glance it would seem to be a tall task. But in looking at the increase from 2013, $13.2 million to 2014, $40 million we see a tripling of sales. To triple again in 2015 would result in sales of $120 million.

    While I expect the small screen production to increase some, Apple I Watch, the big increase will come in the production of TV screens on the new Gen 8 plant.

    According to Steve Abramson on the 3rd qtr CC capacityof Gen 8 will increase from the 8,000 plates in 2014 to 34,000 by the end of 2015 or an increase of 4.25 times. This will require a significant amount of materials.

    Sentiment: Strong Buy

  • Reply to

    Main customers

    by grayble3 Nov 7, 2014 7:21 AM
    rul4king rul4king Nov 7, 2014 9:58 AM Flag

    A review through the 10Q, I came up with an interesting fact.
    Given
    Customer A is Samsung @37% and customer B is LG @ 31% = Korea’s 68% of sales.
    Customer C is NSSC, host, at 18% or $5.92 million from Japan. Who in Japan purchased the other 8.2% or $2.66 million? Was it Konica Minolta or Japan Display? Prior to 3rd qtr NSSC was practically all of the sales to Japan.

    Sentiment: Strong Buy

  • Reply to

    Earnings Prediction

    by ptbot Nov 6, 2014 12:15 PM
    rul4king rul4king Nov 6, 2014 1:12 PM Flag

    Your prediction is about right.

    Analyst have them with a revenue decline from the 2nd qtr. of $1 million + based upon sluggish sales to Samsung based upon S5 sales. Samsung has used this capacity on other phones and tablets. Since Samsung's capacity has been used on a variety of screen sizes their utilization rates have probably taken a hit. Therefore sales of host and emitter sales to Samsung probably went down approx. $2 million.

    LG on the other hand has been ramping up production and therefore I am estimating an increase in revenue of approx. $3 million. Note margins on sales to LG are higher than Samsung's.

    I am estimating revenues of $39 - $41 million and eps. of $.08 - $.12.

    Sentiment: Strong Buy

  • Reply to

    QMC To Quadruple Quantum Dot Production Space

    by pholedphan Nov 5, 2014 2:33 PM
    rul4king rul4king Nov 5, 2014 4:03 PM Flag

    Yes. They are going to double their scientific staff. According to Yahoo their whole staff is 10 people. How many are scientific staff? Soo their going to hire 5 people. Big deal. I bet UDC in the next 6 months will hire 5 people.

    Sentiment: Strong Buy

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