• STATSChipPACAppointsNewCFO.pdf

Investment Merits

• A potential counter listed on the Singapore Exchange to ride on Apple' s growth when A8 chipset orders are confirmed for STATS
• Relatively strong balance sheet underpinned by a reasonable current ratio of 1.1, a good amount of cash pile and a conservative debt to equity ratio of 0.7

Investment Risks

• Speculative play at this juncture before Apple' s order is confirmed
• Apple has repeatedly pressed on its suppliers' price which potentially could have an adverse impact on STATS' gross margin
• Maintaining high capital expenditure at around $120 million annually

SI Research Takeaway
Since the announcement, STATS' share price has made a huge jump by as much as 14.5%. At this juncture, Apple' s orders have potentially been priced into STATS' share price. With that in mind, it wouldn' t be too late to initiate positions in STATS upon Apple' s confirmations.

Assuming gross margins on Apple' s orders that are not too compressed by the company' s strong bargaining power, STATS should see stronger numbers in its bottomline, which ultimately benefit its share price.

Lastly, judging at how Apple selects and sticks with its suppliers, orders from Apple would create a source of consistent income stream for STATS as the company moves forward.

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