$Tower Semiconductor (TSEM.US)$Excluded from the March 2022 ...

Launched in 1994, it is mainly an OEM business. 49% of the market is in the US, and the current price is 33.98.

In the past 5 years, revenue has shrunk in 2019 and 2023. In the middle of the 3 years, it only increased by 9.1%. Operating profit also increased in the middle 3 years, with an average growth rate of 5.4%. Net profit reached 520 million in 2023 due to special revenue. Without considering special income, net profit should be around 200 million yuan. There was no interest burden for the past two years. After increasing from 18.6% to 27.8% in the past 5 years, gross margin fell back to 24.9%, and the return on net assets was 15.1% in 2022.

Currently, the price-earnings ratio is 7.3. If special income is excluded, the price-earnings ratio is 18.8, and the 5-year average net profit of 222 million yuan corresponds to a price-earnings ratio of 17. Considering that it is highly cyclical, the valuation is unattractive.