Stats ChipPAC

Stats ChipPAC: Counter in play today with 4% gain to $0.605. ($0.585) Takeover rumours re-surfaced Takeover speculation on STATS ChipPAC has re-surfaced on Chinese newswires. This time round, The Taipei Times cited the need for Taiwanese integrated circuit packaging and testing services providers to improve, given the rising competition from China. The article claims that following industry consolidation in China, there are rumours that Jiangsu Changjiang Electronics Technology Co plans to expand by acquiring SGX-listed STATS ChipPAC. We note that such rumours have been circulating since mid-May when the company disclosed that it has received expression of interest from several parties in relation to a possible acquisition. Although no party has been named, some of those interested bidders were said to include major semiconductor players such as Advanced Semiconductor Engineering, Changjiang Electronics Technology, Samsung Electronics and Huatian Technology. At $0.585, Stats ChipPAC is valued at 1.1x P/B, compared to its three-year historical average of 0.75x and Taiwanese peer average of 1.6x.