New Risk • Apr 16
New major risk - Market cap size The company's market capitalization is less than US$10m. Market cap: NT$325.4m (US$10.00m) This is considered a major risk. Companies with a small market capitalization are most likely businesses that have not yet released a product to market or are simply a very small company without a wide reach. Either way, risk is elevated with these companies because there is a chance the product may not come to fruition or the company's addressable market or demand may not be as large as expected. In addition, if the company's size is the main factor, it is less likely to have many investors and analysts following it and scrutinizing its performance and outlook. Currently, the following risks have been identified for the company: Major Risks Share price has been highly volatile over the past 3 months (10.0% average weekly change). Dividend is not well covered by earnings and cash flows. Paying a dividend despite being loss-making. Paying a dividend despite having no free cash flows. Earnings have declined by 6.8% per year over the past 5 years. Market cap is less than US$10m (NT$325.4m market cap, or US$10.00m). New Risk • Apr 10
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Taiwanese stocks, typically moving 8.0% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Major Risks Dividend is not well covered by earnings and cash flows. Paying a dividend despite being loss-making. Paying a dividend despite having no free cash flows. Earnings have declined by 6.8% per year over the past 5 years. Minor Risks Share price has been volatile over the past 3 months (8.0% average weekly change). Market cap is less than US$100m (NT$432.3m market cap, or US$13.5m). Buy Or Sell Opportunity • Apr 02
Now 23% undervalued after recent price drop Over the last 90 days, the stock has fallen 23% to NT$18.35. The fair value is estimated to be NT$23.79, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has declined by 13% over the last 3 years. Meanwhile, the company became loss making. Reported Earnings • Apr 02
Full year 2023 earnings released: NT$0.61 loss per share (vs NT$2.59 profit in FY 2022) Full year 2023 results: NT$0.61 loss per share (down from NT$2.59 profit in FY 2022). Revenue: NT$625.3m (down 20% from FY 2022). Net loss: NT$18.8m (down 124% from profit in FY 2022). Over the last 3 years on average, earnings per share has fallen by 41% per year but the company’s share price has only fallen by 8% per year, which means it has not declined as severely as earnings. Buy Or Sell Opportunity • Feb 29
Now 23% undervalued Over the last 90 days, the stock has risen 1.5% to NT$22.95. The fair value is estimated to be NT$29.73, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has been flat over the last 3 years. Meanwhile, the company became loss making. Announcement • Feb 28
Arima Lasers Corporation, Annual General Meeting, May 15, 2024 Arima Lasers Corporation, Annual General Meeting, May 15, 2024. New Risk • Feb 25
New minor risk - Financial data availability The company's latest financial reports are more than 6 months old. Last reported fiscal period ended June 2023. This is considered a minor risk. If the company has not reported its earnings on time, it may have been delayed due to audit problems or it may be finding it difficult to reconcile its accounts. Currently, the following risks have been identified for the company: Major Risk Dividend is not well covered by earnings and cash flows. Paying a dividend despite being loss-making. Cash payout ratio: 90% Minor Risks Latest financial reports are more than 6 months old (reported June 2023 fiscal period end). Market cap is less than US$100m (NT$767.0m market cap, or US$24.3m). Buying Opportunity • Dec 27
Now 20% undervalued Over the last 90 days, the stock is up 5.3%. The fair value is estimated to be NT$28.77, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has been flat over the last 3 years. Meanwhile, the company became loss making. Buying Opportunity • Nov 10
Now 21% undervalued after recent price drop Over the last 90 days, the stock is down 2.8%. The fair value is estimated to be NT$28.59, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has been flat over the last 3 years. Meanwhile, the company became loss making. Buying Opportunity • Aug 25
Now 21% undervalued after recent price drop Over the last 90 days, the stock is down 11%. The fair value is estimated to be NT$28.26, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has been flat over the last 3 years. Meanwhile, the company became loss making. New Risk • Aug 18
New minor risk - Shareholder dilution The company's shareholders have been diluted in the past year. Increase in shares outstanding: 10.0% This is considered a minor risk. Shareholder dilution occurs when there is an increase in the number of shares on issue that is not proportionally distributed between all shareholders. Often due to the company raising equity capital or some options being converted into stock. All else being equal, if there are more shares outstanding then each existing share will be entitled to a lower proportion of the company's total earnings, thus reducing earnings per share (EPS). While dilution might not always result in lower EPS (like if the company is using the capital to fund an EPS accretive acquisition) in a lot cases it does, along with lower dividends per share and less voting power at shareholder meetings. Currently, the following risks have been identified for the company: Major Risk Dividend is not well covered by earnings and cash flows. Paying a dividend despite being loss-making. Cash payout ratio: 90% Minor Risks Shareholders have been diluted in the past year (10.0% increase in shares outstanding). Market cap is less than US$100m (NT$726.7m market cap, or US$22.7m). New Risk • Aug 14
New major risk - Dividend sustainability The dividend is not well covered by earnings and cash flows. The company is paying a dividend despite being loss-making. Cash payout ratio: 90% Dividend yield: 8.6% This is considered a major risk. Companies that pay out too much of their earnings and cash flows are at risk of having to reduce or cut their dividend in future. If earnings or cash flows stagnate or fall, then there may not be enough to maintain the same dividend. Or in extreme cases, companies may opt to dig into capital reserves or take on debt to maintain the dividend. For dividend paying companies, any reduction in the dividend can significantly impact the share price. Currently, the following risks have been identified for the company: Major Risk Dividend is not well covered by earnings and cash flows. Paying a dividend despite being loss-making. Cash payout ratio: 90% Minor Risk Market cap is less than US$100m (NT$719.0m market cap, or US$22.5m). Upcoming Dividend • Mar 30
Upcoming dividend of NT$2.00 per share at 7.4% yield Eligible shareholders must have bought the stock before 06 April 2023. Payment date: 05 May 2023. Trailing yield: 7.4%. Within top quartile of Taiwanese dividend payers (5.9%). Higher than average of industry peers (3.3%). Upcoming Dividend • Jul 11
Upcoming dividend of NT$3.00 per share Eligible shareholders must have bought the stock before 18 July 2022. Payment date: 12 August 2022. Payout ratio is a comfortable 74% and this is well supported by cash flows. Trailing yield: 7.7%. Within top quartile of Taiwanese dividend payers (6.7%). Higher than average of industry peers (3.8%). Valuation Update With 7 Day Price Move • Nov 01
Investor sentiment improved over the past week After last week's 30% share price gain to NT$40.50, the stock trades at a trailing P/E ratio of 16.6x. Average trailing P/E is 21x in the Semiconductor industry in Taiwan. Total returns to shareholders of 100% over the past three years. Upcoming Dividend • Sep 02
Upcoming dividend of NT$1.00 per share Eligible shareholders must have bought the stock before 09 September 2021. Payment date: 08 October 2021. Trailing yield: 3.3%. Lower than top quartile of Taiwanese dividend payers (5.2%). Higher than average of industry peers (2.1%). Reported Earnings • Aug 18
First half 2021 earnings released: EPS NT$1.76 (vs NT$0.27 in 1H 2020) The company reported a strong first half result with improved earnings, revenues and profit margins. First half 2021 results: Revenue: NT$474.7m (up 33% from 1H 2020). Net income: NT$49.4m (up NT$42.0m from 1H 2020). Profit margin: 10% (up from 2.1% in 1H 2020). The increase in margin was driven by higher revenue. Over the last 3 years on average, earnings per share has fallen by 37% per year but the company’s share price has increased by 2% per year, which means it is well ahead of earnings. Valuation Update With 7 Day Price Move • Jul 29
Investor sentiment improved over the past week After last week's 26% share price gain to NT$30.15, the stock trades at a trailing P/E ratio of 31.6x. Average trailing P/E is 26x in the Semiconductor industry in Taiwan. Total returns to shareholders of 15% over the past three years. Reported Earnings • Apr 17
Full year 2020 earnings released: EPS NT$0.95 (vs NT$0.56 in FY 2019) The company reported a strong full year result with improved earnings, revenues and profit margins. Full year 2020 results: Revenue: NT$790.1m (up 13% from FY 2019). Net income: NT$26.9m (up 72% from FY 2019). Profit margin: 3.4% (up from 2.2% in FY 2019). The increase in margin was driven by higher revenue. Over the last 3 years on average, earnings per share has fallen by 56% per year but the company’s share price has only fallen by 3% per year, which means it has not declined as severely as earnings. Announcement • Mar 16
Arima Lasers Corporation, Annual General Meeting, Jun 10, 2021 Arima Lasers Corporation, Annual General Meeting, Jun 10, 2021. Is New 90 Day High Low • Feb 18
New 90-day high: NT$22.90 The company is up 2.0% from its price of NT$22.50 on 20 November 2020. The Taiwanese market is up 18% over the last 90 days, indicating the company underperformed over that time. It also underperformed the Semiconductor industry, which is up 35% over the same period. Is New 90 Day High Low • Nov 10
New 90-day high: NT$20.95 The company is up 5.0% from its price of NT$19.95 on 12 August 2020. The Taiwanese market is up 3.0% over the last 90 days, indicating the company outperformed over that time. However, it underperformed the Semiconductor industry, which is up 6.0% over the same period. Is New 90 Day High Low • Oct 24
New 90-day high: NT$20.55 The company is up 5.0% from its price of NT$19.50 on 24 July 2020. The Taiwanese market is up 4.0% over the last 90 days, indicating the company outperformed over that time. However, it underperformed the Semiconductor industry, which is up 13% over the same period.