The analyst plans to trim some of their position in Wafer Works (6182) after a 5x gain over three months, indicating an exit stance.
Wafer Works has seen increased pricing power and multiple price increases this year, with ongoing negotiations for further hikes. Despite growth prospects in certain segments, legacy business lines and capex for expansion create uncertainty in earnings growth. The analyst feels 5x gain is sufficient and plans to reduce exposure.
Fun times with Wafer Works (6182). Up over 5x since my thesis three months ago. I'm pleased to know that I was directionally correct with the trade, and seemed to front-run institutions and retail perfectly. But for a little more context: They're seeing increased pricing power now, where they've recently raised prices for 6-inch wafers twice this year already. And are signalling for additional price increases in H2 for 8-inch and 12-inch wafers with customer negotiations ongoing currently (Taiwan Commercial Times). There's still some drag from legacy business lines like automotive though, even though there's a future growth story in areas like GaN/SOI/12-inch despite relatively lumpy monthly revenue currently (which they report on their website). And with some significant capex to fund their 12-inch expansions, the rate at which actual earnings inflects is a bit uncertain to me rn. I think 5x is good enough for now lol, so I do plan to trim some of my position from next week.
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