STATS ChipPAC

STATS ChipPAC: Recorded 3Q14 net loss of US$5.3m, reversing net profit of US$13.3m a year earlier, weighed by absence of a one off receipt of flood insurance settlement last year, declining gross margins (-0.4ppt to 11.8%) and flattish revenue. Revenue came in at US$403.8m, affected by delay in wafer supply at several key customers and demand shift from high-end smartphone to low-end smartphones. This was offset by ramp up for advanced packaging programs and seasonal strength in consumer segment. Management guides 4Q14 revenue growth of between flat and -6% with adjusted EBITDA margin of between 20-24%. Meanwhile, it expects to spend between $65-85m for capex, including $20-40m for the progressive construction of a new factory in South Korea. STATS ChipPAC is trading at 1x P/B.