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See below. Has share been dragged too low?
https://investors.iqep.com/coronavirus/
'Coronavirus
2 March 2020
IQE continues to monitor the situation with regard to the Coronavirus. We are aware that some OEM (Original Equipment Manufacturer) production has been disrupted in the short-term due to the spread of the virus and that certain of our chip customers have broadened current quarter revenue guidance ranges due to uncertainty. Whilst this increases the risk to near term revenue, at this point in time IQE has not experienced any changes to orders relating to this issue. Production at our own facilities is currently unaffected.
IQE operates a dual or multi-source strategy for input supplies to minimise the impact of supply chain disruption on our own production. We also have multi-site qualifications with many customers across our global manufacturing footprint to lessen the potential impact of disruption at any single manufacturing site. The safety of our people remains our primary objective and we have implemented travel restrictions and enhanced health and safety measures to reduce the risk to our people.
The Company has established a business continuity sub-committee to respond to this evolving situation. The sub-committee is monitoring risk indicators and external guidance on the matter and has formulated policies and potential actions for different scenarios. It is also ensuring regular and clear communications with our staff.'
'From Edison
Industry outlook
We note the disruption to semiconductor supply chains being caused by the coronavirus outbreak. Apple for example has reduced its revenue guidance for the current quarter as worldwide iPhone supply will be temporarily constrained because its manufacturing partner sites in China are ramping up more slowly after the Chinese New Year closure than it had anticipated and because demand for its products within China has been affected as a result of store closures. Both Qorvo and Qualcomm have widened and reduced the low end of its guidance range for the current quarter. The potential impact on IQE will depend on whether Chinese manufacturers can recoup lost production and Chinese consumers simply delay purchasing electronic devices from the holiday period to later in the year. '
Edison have a new blurb on website acknowledging supply side issues with Apple and reduced demand from China. Also acknowledging widening of revenue for Qorvo and Qualcomm in Q1. Overall they suggest it will all depend if customers merely delay orders for new phones. So clearly risk but will it impact sales for year once this all blows over? So lots of risk but will it impact IQE at all? Wasn't able to copy and paste as mobile.
Coltrane reduced by 0.57% on Friday 28th to 2.05%. Probably why share was back to 48p on Friday. Shorts now 6.51%. Maybe reduced again today? 3 more days like this they will be clear. Any rise in share here is shorters clearing.
I don't see £1.15 any time soon. Would take a major turnaround here. 62p was a great sell. (Albeit Coltrane reducing confused the matter.) I think a loss is more than likely for 2020. How big is the next question? With H1 figures looking pretty bleak. I may be wrong but this virus is likely to push many economies into recession. Which may make mobile makers rethink new products. Especially with supply chain issues. IQE was already predicting a weak Q1. Airline industry is struggling right now. Many people are staying at home. It won't be only industry struggling. We already know Apple sales will be much lower in China.
Maybe I will be wrong long term. Short term I can see considerable downward pressure here. Even with market recovering in London this share is still falling.
What will be the low point here? 30p? If you think that you would be selling now. I think 2019 results will have a market update. Albeit one of the broker has already suggested where revenue might head. Pends when and if shorts decide to clear. There was 6.5m trades on Friday. Hard to know how this volume was split as trades were not appearing on here.
I honestly hope I am wrong. Back at 44p. Low for year was 40p.
Closing price appears to of been 48p. So good recovery here. Volumes up to 6.5m. See what Monday brings.
Corona virus still ongoing. Iran up 385 to 978 cases. South Korea up to 3736 cases (+586 today.). 576 more in China. In Europe France now has at least 104 cases. Surrey got one case and Twitter had a melt down! Right now any flight landing in UK could be carrying the virus. I don't see this stopping in next month till temperatures get much higher.
Pends how they are recorded on LSE. They may not be recorded correctly as buys/sells on here. Does seem to be strong downward pressure here. Corona is still spreading. Albeit somewhat contained in China. Share price can be influenced by level 2 demand.
The markets in general are down heavily today due to Corona. There have been 12 deaths in Iran now with only 48 cases. Which suggests actually there are closer to 500 or so cases based on 2% figures. That or Iran is extremely unlucky. South Korea up to 833 cases. Italy 223 cases now. It's spreading into middle East countries too. At what point will this hit IQE in it's Asian supply lines? One person sick in a factory would close the whole factory for 2 weeks. 30 cases in Taiwan and 90 in Singapore. That includes supply chains and production of the mobiles too. Hopefully once this all blows over you would expect production to pick back up.
Personally I can't see how this will be contained. Too many cases where no one truly knows where the source person came from. I can see this having a big impact on Q1 results. It's still possible revenue has gone up elsewhere if new clients came on board. Right now Corona will be hitting sales of mobiles in many countries.
Closing price today 51.15p.
The mind boggles. No way the directors will ever buy any shares here. Especially with so many free shares each year even when the company is losing money.
The incentives might help keep key management but why should they lift a finger to help IQE when whatever they do they will be rewarded millions. Maybe IQE has been unlucky with some issues. Especially Corona. However they have yet to show business sense in the way IQE is run. I assume they get share bonuses every few months or is it once a year?
The leaks by their brokers are also a bit worrying. I guess they are using them instead of releasing bad TU. Were about a month away from the results. Hopefully there will be some positive news on increased production or this share price will drift.
What worries me is that revenue for H1 could actually fall compared to last year. Especially if revenue is down 4-7% in Q1. Share price here is still highly manipulated by shorters. Were 5 weeks away from the results. I am guessing we will get more data on q1 figures then. Not even 2 months into 2020 yet.
New cases in China still seems to be 2k a day with just over 100 or so deaths a day. The figures outside of China seem to be contained. Most of these are likely contained in that one main area.
As ever always jam tomorrow. They were expecting a 3m profit this year. You do have to wonder if this will happen. Maybe if new clients and products they use start to become main stream. They are hiring so something must be going right somewhere. GLA.
Be interesting to see if Coltrane reduced into this. They are still at 2.49%. If Corona continues for a long while this will hit iqe. No end from them yet suggesting they have used brokers instead of a TU. Hmmm.
Big UT? trade of 2249646. So that is another large chunk of the shares bought back.
No change in shorts today but Coltrane always trail by 2 days. Should be below 2% now. Have to wait and see what is reported.