Spindex Industries

(13-09-2024, 04:24 PM)dreamybear Wrote:

(13-09-2024, 08:31 AM)wj1984 Wrote: my relatives are the next major SH in spindex (founding family at 75%, they are at about 10% of which 4% or so used to be under a name but since went to nominees).. they have shown that they would accept any reasonable offers like the case of SELECT deslisting.. during some fireside chat with my mum they also encourage her to buy..

Thanks for sharing your thoughts. 

Well, with their stake, maybe you can suggest them to follow GE's activist example ... maybe it will lead to something, no one knows .... 
https://www.valuebuddies.com/thread-2273...#pid170558

After all, there seems to be some interesting corporate activities in the past ...
https://www.valuebuddies.com/thread-64-p...#pid137387

Just a thought, I am not vested.

I don't think they are the activist type but I am sure they are more than willing to sell their stakes if the price is right

@dreamybear,
The appearance of GEH's OPMI Hero Ong is nothing but a red flag on GEH. As the Marvel Cinematic Universe has drilled into us over the last decade - Heroes are made, not born. So if ever one day, VB wj1984 informs us that his relatives have been called to arms, then it is surely a red flag on Spindex. But of course, markets are reflexive, so a red flag resulted in a "calling to arms" action and the actions might eventually transform the color of the flag.

@wj1984,
It seems to me that you have pastimes that look unprofitable but eventually gives insights that allows profitable activities to happen. For example, your observation on timeless pieces was "timely" to OPMIs who don't look at time from their wrists. So I reckon can't rule out your pastime of looking at the Top20 SSH on Spindex ARs.

(14-09-2024, 11:44 AM)weijian Wrote: @wj1984,
It seems to me that you have pastimes that look unprofitable but eventually gives insights that allows profitable activities to happen. For example, your observation on timeless pieces was "timely" to OPMIs who don't look at time from their wrists. So I reckon can't rule out your pastime of looking at the Top20 SSH on Spindex ARs.

Thanks for the compliment but I didn't act on the THG one cause most of my holdings is in spindex (yes yes some confirmation biasness here) and its not all rosy for the timepieces market now but that is for the THG thread.

Actually i must admit the real reason why i like to see the top20 SSH for spindex is to guestimate the networth..

(14-09-2024, 11:44 AM)weijian Wrote: @dreamybear,
The appearance of GEH's OPMI Hero Ong is nothing but a red flag on GEH. As the Marvel Cinematic Universe has drilled into us over the last decade - Heroes are made, not born. So if ever one day, VB wj1984 informs us that his relatives have been called to arms, then it is surely a red flag on Spindex. But of course, markets are reflexive, so a red flag resulted in a "calling to arms" action and the actions might eventually transform the color of the flag.

While heroes have not yet appeared in this case, I think OPMI shareholders shd at least be applauded for trying. 

I suppose it's too much to dream about superheroes(Couche-Tard on Seven & i) appearing but let's hope more heroes activists appear to voice OPMI concerns.  

---------------

https://links.sgx.com/FileOpen/Spindex_R...eID=822518
" Stock exchanges and regulators, including Tokyo Stock Exchange and Korea’s Financial Services Commission, have started to ask companies to set up and disclose valuation boosting plans. These corporate value-boosting initiatives are needed as it is recognised that “corporate values” of listed companies have to improve and that the main driver in enhancing corporate value is the company itself. Efforts have been targeted at companies that trade below a price-to-book ratio of below 1. The plans focussed on increasing awareness and literacy of the cost of capital, capital efficiency and stock prices of listed companies. 

Specifically, Tokyo Stock Exchange has required companies with price-to-book consistently below 1x to disclose their policies and specific initiatives to improve their valuations.

i. Could the board, particularly the independent directors, explain the group’s efforts to increase corporate value and improve capital efficiency?

ii. Apart from acknowledging that there are many external factors influencing the share price, would the board consider disclosing and implementing targeted strategies to narrow the discount gap, thereby creating value for shareholders?"

Thanks for sharing the link dreamybear!

I went through it and particularly like another part with regards to the cash on their balance sheet which you did not quote!

v. What deliberations did the board have regarding the payout ratio? Has the board considered declaring a special dividend or undertaking a capital reduction to return excess capital to shareholders, given the company's strong net cash position? 

Company’s Response:
In considering the dividend payout ratio in any given year, the Board is mindful of our long term strategic vision of growing the business and to use capital efficiently and prudently to support this objective.


Super ambiguous and textbook answer

I thought the real heroic answer was below:

Has the company manage to increase selling prices in any of its three segments in response to the current inflationary pressures?
In general, for the same component, there is a trend of price erosion over time. Over time, we need to constantly improve our production efficiencies to manage this trend.

Some time back, I had a chance to talk to a precision mfg SME owner. And it is not very far off the heroic answer above. The brand owner starts by squeezing their contract manufacturer/s as the product reaches mid cycle, and then spark the whole chain of margin squeeze as the contract manufacturers start to squeeze their own sub-contractors.

Do note all new precision metal parts are usually different in specifications. The OEMs providing detailed technical drawings would choose a proven and reputable supplier like Spindex, first producing samples for qualification and then negotiating and agreeing on the price based on certain quantity, before going into actual mass production. When the OEMs enjoy increasing market demand for their products and volume increases, re-order of the parts for Spindex will also be of higher quantity and usually at a lower price which Spindex can agree to, based on higher production efficiency (mostly from CNC machines), and the fact that such re-orders do not carry the learning curve and other additional costs associated with the initial order. The fact that Spindex has been able to deliver very decent overall profit margins over time points to management's ability to manage to customers' pressure to price down and cost down.

spindex just bought a similar coy in SG (albeit in a different market from their existing clientele base based on the announcement document on sgx) so that they can open more markets.

Just pondering a 3m coy vs their market cap of 110m thereabouts. Should not even contribute much to their top line. Are they seeing something we are not seeing?

(06-01-2025, 01:56 PM)wj1984 Wrote: spindex just bought a similar coy in SG (albeit in a different market from their existing clientele base based on the announcement document on sgx) so that they can open more markets.

Just pondering a 3m coy vs their market cap of 110m thereabouts. Should not even contribute much to their top line. Are they seeing something we are not seeing?

hi wj1984,

My layman understanding of the precision mfg industry is this: The layers of contract/subcontract work is multi fold. So, the more capabilities you possess, the easier for you to embed yourself into the workflow of your customer (or your customer's ultimate customer). Of course, your customer (in this case, a contractor himself who subcontracts certain parts of the work to you) is actively trying to acquire your capabilities (that he doesn't have) and eventually cut you off to save costs. So as someone in the value chain, you will be trying to do the same to your subcontractor.

Besides new capabilities as mentioned, acquisitions will also provide new customer contacts, especially in new geographies or industries. The target might have limited capability resulting in limited revenue. But as part of a enlarged group after been acquired, the enlarged group may be able to capture a larger wallet share of their existing customers, hence increasing revenue from previous situation.

So regardless of size, I believe acquisitions/consolidation in the precision mfg space is inevitable and largely beneficial if done right. The synergies from top line and bottom line are quite real and achievable in my opinion. The smaller they are, the more probable for net positive realized synergies.

(07-01-2025, 09:19 AM)weijian Wrote:

(06-01-2025, 01:56 PM)wj1984 Wrote: spindex just bought a similar coy in SG (albeit in a different market from their existing clientele base based on the announcement document on sgx) so that they can open more markets.

Just pondering a 3m coy vs their market cap of 110m thereabouts. Should not even contribute much to their top line. Are they seeing something we are not seeing?

hi wj1984,

My layman understanding of the precision mfg industry is this: The layers of contract/subcontract work is multi fold. So, the more capabilities you possess, the easier for you to embed yourself into the workflow of your customer (or your customer's ultimate customer). Of course, your customer (in this case, a contractor himself who subcontracts certain parts of the work to you) is actively trying to acquire your capabilities (that he doesn't have) and eventually cut you off to save costs. So as someone in the value chain, you will be trying to do the same to your subcontractor.

Besides new capabilities as mentioned, acquisitions will also provide new customer contacts, especially in new geographies or industries. The target might have limited capability resulting in limited revenue. But as part of a enlarged group after been acquired, the enlarged group may be able to capture a larger wallet share of their existing customers, hence increasing revenue from previous situation.

So regardless of size, I believe acquisitions/consolidation in the precision mfg space is inevitable and largely beneficial if done right. The synergies from top line and bottom line are quite real and achievable in my opinion. The smaller they are, the more probable for net positive realized synergies.

Hello weijian,

thanks for your reply. Great explanation on paragraph 2 with regards to existing target coy capabilities unable to scale up and acquire more revenue.

I think for paragraph 1, is quite subjective. In my day to day life I have some knowledge on cnc machines. It is quite difficult to keep setting it for different products. Once set most machinist do not want to tweak till they have made enough quantities. So i suppose the main contractor would not want to buy a cnc machine (used to cost millions but now with china made could be cheaper) to undercut their subcontractors if the quantities is not significant.