If share price sees little action in upcycle, what else to expect?
​As we said before, 2016F could mark UMC’s third consecutive year with little or no EPS growth. 1Q16 was a good example where in general we have seen strong restocking, and yet the company was not even profitable at the operating level (granted, there was a little bit of an impact from the earthquake, but overall performance was still not very exciting). In the past, the market usually loved to play the tier-two names for greater share leverage in an upcycle, but this has not been the case for quite some time. If earnings and the share price saw little movement during a fairly strong “inventory restocking†period, it is probably difficult for investors to get excited on the name in the foreseeable future.
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