Priortech – listed on the TASE – 5% holding in the Fund

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As highlighted in previous monthly reports, the two sectors that worked well for us in 2020 were the Renewable Energy /Cleantech sector and the Semiconductors sector. In the Semiconductors sector, we focus on the control process of the electronic chip manufacturing segment, which Israel is well known for. In this month’s report, we would like to focus on one of the Fund’s main semiconductor investments, a company by the name of Priortech.

Priortech is a holding company that engages in printed and semiconductor circuits through its semiconductor subsidiaries: (1) Camtek (dually listed in Israel and on the Nasdaq), which offers optical inspection systems to the semiconductor manufacturing and packaging, and (2) Access Semiconductor (a Chinese company). Both companies provide capital equipment, technologies, and manufacturing services globally. Priortech reported in November strong results and growth for the third quarter of 2020 and the first nine months of 2020. The company reported a significant and consistent improvement in “Access” profitability and a record quarterly revenue for Camtek of $40.1 million, an increase of 23% compared to revenues of $32.5 million in the third quarter of 2019. Net profit on a GAAP basis totaled $6.0 million compared to net profit of $4.2 million in the third quarter of 2019.

When we look forward, our high exposure to the semiconductor industry will continue to lead us into 2021, this is mainly for the following reasons:

  • The market is highly concentrated with no new entrants due to heavy R&D investments
  • Israel is globally renowned for leading cutting-edge technologies in the industry
  • The addressable market continues to grow with new applications for AI, 5G, big data, automotive, and others
  • Demand for semiconductors is expected to triple by 2025

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Pengana Capital Group