Valuetronics Holdings

(03-02-2016, 10:33 AM)ZZF Wrote:

(03-02-2016, 09:03 AM)noah2013 Wrote: Despite the benefits drop, the transition is accelerating and the cash flow pops up.
Now with 85% of the market in cold hard cash, I wish they increase the buy-backs.
Overall i like the new company profile more : higher margins, no debt, EV tending to zero and a big dividend.
Best risk profile in SGX

Hi noah, I did a back of envelope calculation . May I ask y u say EV tending to zero?

market cap = HK$796.6 million
cash = HK$681.8 million
ev= HK$114.8 million

They generate cash( >100 million a year ) so ev mechanically tends to zero( unless they pay a massive dividend but i would prefer them to buy back shares )

(03-02-2016, 09:03 AM)noah2013 Wrote: Despite the benefits drop, the transition is accelerating and the cash flow pops up.
Now with 85% of the market in cold hard cash, I wish they increase the buy-backs.
Overall i like the new company profile more : higher margins, no debt, EV tending to zero and a big dividend.
Best risk profile in SGX

(03-02-2016, 11:01 AM)noah2013 Wrote:

(03-02-2016, 10:33 AM)ZZF Wrote:

(03-02-2016, 09:03 AM)noah2013 Wrote: Despite the benefits drop, the transition is accelerating and the cash flow pops up.
Now with 85% of the market in cold hard cash, I wish they increase the buy-backs.
Overall i like the new company profile more : higher margins, no debt, EV tending to zero and a big dividend.
Best risk profile in SGX

Hi noah, I did a back of envelope calculation . May I ask y u say EV tending to zero?

market cap = HK$796.6 million
cash = HK$681.8 million
ev= HK$114.8 million

They generate cash( >100 million a year ) so ev mechanically tends to zero( unless they pay a massive dividend but i would prefer them to buy back shares )

Ic. Thanks for reply.

post-results, EV is almost zero (MV - cash - for sale investments)

Trailing 12 month (T12M) Revenue: S$377.8 mil
T12M EBITDA: S$33.1 mil
T12M PAT: S$23.6 mil

Market capitalisation @ S$0.41 per share = S$155.2 mil
Net Cash (nil debt) = S$125.4 mil
Enterprise value = S$29.8 mil

0.9x EV/EBITDA, 6.5x P/E, 1.0x P/BV

Cash at a high, but mainly a reduction in receivables.
Comparing 31 March 2015 to 31 Dec 2015, cash +RM30 mil, receivables -RM30 mil.

Therefore, enterprise value (EV) is not quite zero, but relatively low.

Note:
Cash = S$123.3 mil
Short-term investments = S$2.1 mil
to make up net cash of S$125.4 mil

Other balance sheet items:
Receivables = S$63.9 mil (down from S$93.5 mil at 31/3/15)
Inventory = S$38.3 mil (down from S$40.1 mil at 31/3/15)
Payables = S$57.8 mil (down from S$62.8 mil at 31/3/15)
Net PPE = S$29.4 mil (down from S$31.0 mil at 31/3/15)

Does anyone knows what their Industrial and Commercial Electronics sell?
and who are they selling it to?

SINGAPORE (March 10): CIMB has started coverage of Valuetronics Holdings with a recommendation to "add" and a target price of 56 cents.

Valuetronics is an electronics manufacturing services provider and its key clients are in both consumer electronics and industrial and commercial electronics, mainly US and European companies.

The company has managed to build up a wide product portfolio and has managed to gain net margins of between 5 and 6%.

http://sgx.i3investor.com/servlets/ptres/9364.jsp

I don't have the full research but seems like CS is jumping in.
This is a heavy weight.
We are now entering the dream scenario when a sleepy value stock starts to attract the growth crowd.
Multipliers jumping from the good old 1.5-2.5 ev/ebitda to maybe 8-10 soon hopefully
If anybody has access to their report, I would be interested to read it.

I have owned Valuetronics for a very long time. I like the company, but I still can't understand the management logic of awarding stock options at 20% discount to market price. Seems too steep a cut at the expense of other shareholders.

(10-03-2017, 09:11 AM)luckystar Wrote: I have owned Valuetronics for a very long time. I like the company, but I still can't understand the management logic of awarding stock options at 20% discount to market price. Seems too steep a cut at the expense of other shareholders.

I reckon the management needs to balance the reward and share dilution.

I glimpsed at 2015 AR. The ratio of share/total compensation is <10% and the 20% is the maximum discount. The ESOS scheme is also well-spread among the management team.

The company has paid more as the annual dividends than the key management compensation, including the share award. It should be pretty fair allocation, IMHO