Stars aims to beat 2008 profit

       Stars Microelectronics is confident that this year's profits will exceed last year's thanks to a shift to higher-margin integrated-circuit operations and improved demand with the global economic recovery.
       The company reported nine-month profit of 188.13 million baht, up from 165.68 million in the same period last year.
       Third-quarter profit rose to 73.68 million baht, up from 62.34 million in the same period last year.
       Stars reported 2008 profits of 200.9 million baht on revenues of 12.12 billion.
       While 2009 revenues are likely to fall short of last year's performance - ninemonth revenues totalled 7.5 billion baht - chief executive Polsak Lertputipinyo said profit would rise thanks to higher revenues from Stars' IC business.
       Stars (SMT) is an integrated electronics manufacturing services provider with two main business lines: microelectronic manufacturing assembly (MMA), which contributes 70-80% of total revenues,and integrated circuits (IC), which accounts for the rest.
       The company is investing 100 million baht to expand its IC manufacturing capacity by 50% to 1.2 million pieces per year.
       The company has already committed 50 million baht for the project, with the remainder to be spent in the first quarter of 2010, said Mr Pinyo.
       SMT also plans to invest another 100 million baht in 2010 to further expand its IC operations.
       "We are confident in any case that the company this year will meet or exceed last year's net profit," he told investors at a briefing yesterday.
       "The fourth quarter of this year will see our highest revenues ever, with 60%sales growth from our clients in the hard-disk industry. We have also received new orders from several multinational firms, including the world's fifth-largest semiconductor manufacturer and another a leading firm in the credit card market."
       At the end of the third quarter, SMT's return-on-equity was 18.4%, down from 21.3% at its entry in the Stock Exchange of Thailand in September, he added.
       Debt-to-equity remains a relatively low 1.1 times, down from 2.48 times prior to its initial public offering.
       The listing allowed the company to reduce its debt burden and interest expenses by 20 million baht per year.
       Stars' valuation is seven times earnings compared with a sector average of eight to 12 times.
       SMT floated 92 million shares in its IPO at a price of 4.95 baht each. Shares of SMT closed yesterday at 6.25 baht,down five satang, in trade worth 11.35 million.