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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Donald Wennerstrom who wrote (71626)	2/16/2016 8:09:21 PM
From: Elroy	1 Recommendation Recommended By Return to Sender Read Replies (1) \| Respond to of 95479

Sure. SIMO has about 10%-12% of revenue from cell phone transceivers. They don't count. However, SIMO gives the exact share of transceiver revenues in the conference calls and not in the press releases, so I'm not going to go back and look it up. The remainder of their sales is storage controllers, a bit of industrial SSDs, and then an enterprise SSD product they gained from H2 2015 due to an acquisition. So...the growth numbers below will be plus or minus a few percent since I've left the transceivers in there. I think in 2015 transceivers grew identically to storage, so the 2014 to 2015 growth number will be pretty close About $10m of 2015 revenue was acquired (in summer 2015, the enterprise SSD business). Fiscal year ends in December Given that, SIMO's revenues in your chart format looks like this 2014 revenues - 2013/4 growth - 2015 revenues - 2014/5 growth $289m ------------------ 28% ------------- $361m ----------- 25% So those total revenue numbers include some cell phone transceiver revenues, but the growth rates are accurate within a few percent points. And ~$10m of 2015 revenue was from an acquisition. The outlook for 2016 is up 12% to up 20%, but I'll bet you 2 to 1 they are going to beat the midpoint (16% up) and more likely than not beat the high end. They've already said that for Q1 revenues should be flat with Q4 (normally down about 10% due to seasonality). Flat with Q4 would be ~$97m versus $80m last year, so they're starting 2016 off with a quarter that will be up ~21% year on year. The seasonality normally then goes up from Q1, so it's hard to see them starting off with up 21%, revenues going up, and then ending the year up only 16% in total. They've also said their eMMC business will be UP from Q4 and that's their largest segment (~33% of revenues), SSDs will be UP from Q4, and enterprise SSDs will be flat with Q4. So.....methinks they are going to BLOW AWAY their own guidance this year, starting with their Q1 report. They really need legacy products (USB controllers and mobile card controllers) to decline dramatically to be only flat with Q4 if all the new stuff is going up from Q4). The new stuff which is growing (eMMC, SSDs) carries higher gross margins than the legacy stuff, so SIMO's gross margins should go up as the year proceeds. Did I mention they are probably the controller provider for the Intel/Micron 3D NAND product which is supposed to come out in Q2? It's a gorgeous growth story that would in other cases get a 25x PE (slight premium to growth). They have 4 of the 6 NAND makers as OEM clients for SATA-3 SSD controllers, and are pursuing multiple programs with all of them. They have TLC and MLC SATA-3 controllers in production. They have announced a 3D NAND SSD controller. They will release a PCIe SSD controller this year. They became the #1 merchant SSD controller maker in the world (displacing MRVL) in H2 2015. Their SSD business grew over 300% in 2015, and they expect it to grow at least 50% in 2016. I think it will grow faster. I don't see what they don't get at least a 20x forward PE. EPS in 2016 should easily be $2.30, probably higher if they exceed their revenue guidance. They have $6 per share cash and no debt. They pay 60 cents per year in dividend.