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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!
LRCX 185.06+8.2%3:59 PM EST
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To: Cary Salsberg who wrote (2512)9/8/1997 8:40:00 PM
From: Ian@SI   of 10921
 
Cary,

Nice post as usual.

Re CYMI's valuation.

First, CYMI is unlikely to let its backlog approach 2 years. It's in the process of ramping to more than 150 lasers / quarter. I believe each laser sells for about 1/3 of the stepper's price. That would put them near $2M each.

1000 steppers annually is about today's total from Canon, Nikon, ASMLF and SVGI. In addition, UTEK's PGILD tools use CYMI lasers. I don't know whether or not the maskmaking equipment makers will be using CYMI lasers at some point. The $ size of the semiconductor industry will double by century end. It is reasonable to assume that the number of steppers required will also increase substantially by century end.

Thus, I think 1000 steppers/annum is in the ballpark, but conservative.

So;

Revenues: 1000*2M = $2B/annum (This is 10* the current run rate)
PSR Range since IPO: 1.9 - 10.6
# Shares outstanding: 15.347M
Price / Share (projected if PSR = 4):$2B*4 / 15.347 = $500+.

PSR on Sept 3 was 10, so I guess its about 7 today.

We haven't included any estimates of repairs, service, spares, etc. These machines will come off warrantee and start generating more revenue. e.g. - Service revenue three years from now could exceed today's gross revenues.

I think today's 30% off sale represents a fabulous bargain for the long term. What's going to happen tomorrow or the next day is not something I could ever predict.

To thread,

I'd appreciate a criticism of the thumbnail calculation above. Does anyone have a different / better projection?

Ian.
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