Recommended as a sell and maybe buy back in the autumn in Shares Magazine. Seems to be going up nicely on fairly large volumes ahead of interims on Wednesday (18.8.04). Does anybody know much about this company??

Below is the copy of the EVO BUY note that came out today :

Evolution Securities 100 Wood Street, London, EC2V 7AN 020 7071 4300
Evolution
SECURITIES
www.evosecurities.com 4 November 2004
IQE (IQE) Buy
Mkt cap: 36m Net cash: 11m Contract win Price/Target: 11p/15p
Breakthrough contract win
IQE has announced that it has won a $25m two year outsourcing deal
with a leading US RF component manufacturer. This is a genuine
breakthrough for IQE it gives us the confidence needed to raise our
target price to 15p
IQE have won a major outsourcing contract with a leading US Radio Frequency
wireless/mobile components company. The contract has a minimum term of
two years and an initial value of $25m. This is one of the four contracts that
management were referring to at the time of the fund raising in November
2004. The other three do not appear to be close to signing at present but the
list of potential customers is still there and management continue to talk to
other parties. This contract win proves that there is a market for wholesale
outsourcing of epitaxy and we expect others to follow but not in the
immediate future.
We estimate the split to be $10m:$15m between year one and year two. The
contract involves the closure of the customer's facilities and because of the
sensitive nature of this the identity of the customer has not been announced.
We are not changing our forecasts. This $10m for the first year is already in our
27.2m revenues estimate for next year. It is worth noting that because the
contract is with an existing customer there is an element of revenue substitution
in this contract. However, this announcement does mean that we are
considerably more comfortable with the forecasts than we were.
If more contracts come through, the revenues should go straight into our
forecasts. We would not expect the other contracts to be as substantial as this
but given the marginal loss/profit scenario we have forecast for next year their
effect on earnings could be significant.
As a result of this announcement we have increased confidence in the forecasts
and so we are increasing our share price target to 15p.
Ian Robertson +44 (0)20 7071 4463 ian.robertson@evosecurities.com EVO Securities is broker to IQE
Year end Sales (m) EBITDA (m) PTP (m) EPS (p) PER (x) Yield (%) EV/Sales (x) Revised?
12/03A 18.8 -11.3 -12.8 -6.2 - - 1.3
12/04E 17.1 -8.3 -9.9 -3.1 - - 1.5 No
12/05E 27.2 0.4 -1.5 -0.5 - - 0.9
21. 75 1 5/1 0/03 LOW 2 .20 11/ 3/0 3 LAST 8 .50 Source: DATASTREAM

Read the EVO research, essentially any more contract wins will produce a highly profitable and valuable business. Therefore investors MUST position themselves NOW, to take advantage of the tremendous upside on offer. In addition, EVO are now very confident in the current valuation and expect further significant, revenue and therefore, profit growth.

moving on up, moving on up...like the song goes!

Press Mention : will appear in tomorrow's Times Newspaper.

November 05, 2004

Smaller stock to watch

IQE, the maker of wafers for the semiconductor industry, leapt 3p to 11p on winning a $25 million (13.5 million) two-year outsourcing contract from an unnamed US radio-frequency components maker. The deal is the first to materialise of four referred to at last years 18.75 million fundraising, and has provided confidence in the wholesale outsourcing market. Evolution Securities has raised its price target from 10p to 15p.

http://business.timesonline.co.uk/article/0,,8211-1345253,00.html

Times article indicates that 3 more deals are in the pipeline....

"The deal is the first to materialise of four referred to at last years 18.75 million fundraising, and has provided confidence in the wholesale outsourcing market"

Press Mention : in today's Guardian Newspaper.

On Aim, semiconductor company IQE rose 3p, or 35%, to 11.75p after its North American subsidiary secured a deal worth $25m (13.5m) to supply chips for mobile phones over the next two years. At last night's close, IQE was valued at just 37m.

http://www.guardian.co.uk/business/story/0,3604,1343954,00.html

Guardian thinks IQE is still very undervalued :

"At last night's close, IQE was valued at just 37m".

Press Mention : in today's The Sun Newspaper.

Outside the Footsie, semiconductor specialist IQE surged 3p to 11.75 on a contract win.

http://www.thesun.co.uk/article/0,,9-2004512192,00.html

The 2 million buy yesterday at 11.61 pence was Canada Life Limited (see below) :

RNS Number:8998E
IQE PLC
05 November 2004


IQE plc ("the Company")

Holding in the Company





The Company was notified today by Canada Life Limited, that following the
purchase of 2,000,000 ordinary shares of 1 pence each in the Company ("Ordinary
Shares") at 11.6 pence each, Canada Life Marketing Group is now interested in
14,551,156 Ordinary Shares. These Ordinary Shares represent 4.6 per cent. of the
issued share capital of the Company.



05 November 2004



This information is provided by RNS
The company news service from the London Stock Exchange

END
HOLUUGACGUPCURA

Shares in IQE jumped 34.3 per cent to 11.75p after the semiconductor components group secured a major outsourcing contract with a leading North American components manufacturer, esitmated to be worth $25m over two years.

http://feeds.bignewsnetwork.com/?sid=ea07724c2f0973ed

Press Mention :

IQE, the chips material manufacturer, jumped 3p to 11 3/4p after its North American subsidiary secured an outsourcing contract worth 13.6m over two years. With more than 10m cash in the bank, analysts believe the stock still looks cheap.


http://www.thisislondon.co.uk/news/business/articles/timid84334?source=

Good morning Sue are we going to have another good day.

Morning John...as I write I believe another very large buy is being filled in the background. Expecting the price to close around 13.00 pence today then attack the 15.00 pence area come next week.

MM's are still balancing their books from yesterdays massive volume spike. Does anyone think they had 17M shares (yesterday's volume) hanging around? They're just buying shares today cheaper than they sold them yesterday. Once this consolidation is complete, they will let the bid rise. Surely you don't expect them to pay more for a share than they have been paid for it?

There will be several large buyers sizing up yesterdays announcement and ready to accumulate when the remaining froth from yesterday has blown off. If the ask gets to 11p again, i'll add again and i won't be alone.

I think we wont be hitting 13p today

Here it comes...the large buy for 500,000 shares at 12.00 pence, reported as a T trade.

Large buys in the pipeline thesaurus, they have to be filled first...stop whinging every time please.

half a mil buy just gone through we just see that 13p.

sorry. Are sue helen and kivver talking about the same half a mill buy

yes, sorry didn't see the one above.

Level 2 closing at 2 v 2 with EVO and KLWT on the bid and WINS and MLSB on the offer.

Large buys will continue to come into next week as long as the KLWT on the bid and WINS on the offer combination continues...as things stand thats how the way it is so more large buy orders that need to be filled are in the pipeline.

All profit taking : more like loss taking out of the way today which is very good with the price obviously holding onto its gains from yesterday.

Here comes another large buy : 250,000 T BUY comes through at 12.25 pence.

KLWT picked up 2 million shares today :

500,000 T BUY came through at 12.00 pence
250,000 T BUY came through at 12.25 pence

KLWT stil have 1.25 million shares for someone.

Here comes another : 250,000 O BUY comes through at 12.25 pence.

1 Million bought by someone now today : KLWT have 1 million shares left now for someone.

Here comes another : 250,000 VW BUY comes through at 12.25 pence

Someone has bought 1.25 million shares now today : KLWT have 750,000 shares left for someone.

Now does anyone else remember the shanigans by WINS this morning...constantly bringing the offer to 12.25 and 12.50 pence. The above buys was the reason as to why.

I'd lay odds on press comment at the weekend and a further rise next week - this is due to reach mid teens before too long, as it's a good company with (strange in these times) a board who tell it like it is.
They've been honest when trading wasn't going well. Now they're saying it is going well. They also say they've been progressing towards orders with a number of far eastern customers. They also say they're targetting ebitda break-even on a month-by-month basis by their year end. Given the order this week and the attention that has brought, and the positive statement that accompanied it, why would anyone except an extremely short term trader want to get out of these?

MMs picked up 2 million shares at 11.50-12.00 pence and sold them at 12.00-12.25 pence....that's how it works...the MMs made their profit as well. Now another question with a 1.25 million buy order in the background at fixed prices how the hell can the price go pass those prices that the buy order is fixed at without them buys being filled first.

As I said earlier WINS and KLWT combination closed like that on Level 2...so as long KLWT stay alone on the bid and WINS alone on the offer - it means more larger buys are in the pipeline.