Electronic Contract Manufacture (ECM) Sector Message Board

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Strategies & Market Trends : Electronic Contract Manufacture (ECM) Sector

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To: Robert G. Harrell who wrote (2115)	7/26/1999 5:21:00 PM
From: rich evans	Read Replies (1) of 2542

I may have to disagree with Solderman's view. DIIG in their recent conference call and reports indicated they were extremely excited with their prospects. They were in registration so could not comment much forward looking but all their book to bills in their 3 divisions are over 1.Dovatron should have a strong second 1/2 and is expanding fast in China, Malaysia, and Guadalahara. Multech their PCB divison is at capacity and needs to balance their innerlayer and outerlayer at their different facilities. It is a jewel making IBM's SLC product. The gross margins are 25% which is much higher then HDCO and they have the best microvias technology etc. Actually Dovatron revs are much higher then multechs 180 to 81. Only backpanels are underperforming. No one can compete with SANM it seems. The semi group is now an asset instead of liability and many customers like the linked strategy with the option to design into the silicon versus designing into the PCB.Once this secondary goes for 6 million shares I would think they would be close to debt free on a net cash basis and they discussed at some length their acquistion strategy.I don't know if we can project 50% growth with seems to be the FLEX,JBL, SLR estimations, butstill this company deserves higher multiples in my opinion. Although what has happened is the others have lowered their multiples instead of DIIG raising. The PSRs you discussed don't seem correct on a forward looking basis. If FLEX for example and do close to 3 bill by march 2000 with 54 million shares out the psr is much lower then your quotes. DIIG indicated Europe is picking up as did ATSN and others. DIIGs CZECH falicity is well positioned similar to FLEXs Hungary operation. They are increasing their assembly where BOX build will be over 30% of business not just a PCBAer anymore. I think we have a horse race between DIIG, JBL,FLEX and even SCI and I think thats fine because I own them all. Rich

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