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Technology Stocks : Amkor Technology Inc (AMKR) -- Ignore unavailable to you. Want to Upgrade?

To: tech101 who wrote (123)	3/17/1999 1:51:00 PM
From: tech101	Read Replies (2) \| Respond to of 1056

Impact of K4 per Salomon... by: Flyboys99 3645 of 3674 messages.yahoo.com@m2.yahoo.com i was just rereading lily wu's march 5 research report on amkor. for those who haven't seen it, she says "We believe the purchase of K4 is an important and favorable move for Amkor from an earnings and valuation perspective." It doesn't create any additional revenue or market share b/c amkor always captured all of the Anam revenue anyway. By buying the plant, Amkor gets to keep ALL the gross profit generated from the K4 plant. More importantly, it reduces Amkor's reliance upon Anam which has always been a key source of concern. Salomon's model calls for reliance on Anam's facilities to fall from 66% in '98 to 47% in 2000, and below 30% in 2003. While interest expense will increase substantially to $53 million in 2000 (again according to Salamon report) with the purchase of K4, it effectively lowers the tax rate from 29% to 25%.(K4 facility enjoys a tax holiday). I guess investors are discounting the stock based on the relative uncertainties involved, such as how the deal will be financed and its cost of funds, purchase price, has the semi-conductor industry cycle bottomed ? I can understand investors being nervous. On the other hand, what a great buying opportunity. the stock seems grossly undervalued IF you believe the industry demand is really picking up. As long as amkor can fill that factory and run it efficiently, they'll make lots of money. And here are their customers telling them how much capacity they need and how the demand has surged. good luck.