Cheung Woh Technologies

[RBM]

Long overdue. And 400 lots were traded at S$ 0.18 today - I suspect CW was buying back again, which is positive for existing shareholders. In a heavily falling market over the last two trading sessions, CW is actually up half a cent despite last Thursday's disclosure on a failing US customer.

[dydx]

Today (14SEp11), Cheung Woh bought back another 200 lots and paid $0.18/share.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument

In total, the company has bought back 614 lots todate, equivalent to approx. 0.2%. Aparting from making the remaining shares more valuable, I suppose it is fair to say that the share buy-back is also an indication of CW management's confidence in the consummation of the proposed partial sale of the vehicle parts business in PRC, and on the future of the remaining HDD components and metal stamping businesses.

[RBM]

Pleasing indeed that CW's leadership is showing confidence in their business - their recently initiated buy-back campaign seems to have put a floor on CW's share price of ~ S$ 0.18, for now atleast.

Less pleasing is the attached cnbc report regarding Solyndra's increasingly public and increasingly high profile problems. Readers of some recent messages in this thread will recall this was a key CW customer, who filed for Bankruptcy a few weeks ago.

http://www.cnbc.com/id/44548432

[RBM]

Pleasing indeed that CW's leadership is showing confidence in their business - their recently initiated buy-back campaign seems to have put a floor on CW's share price of ~ S$ 0.18, for now atleast.

Less pleasing is the attached CNBC wire report regarding Solyndra's increasingly public and increasingly high profile problems. Readers of some recent messages in this thread will recall that Solyndra was a key CW customer, who filed for Bankruptcy on August 31st. I wonder if CW's management were aware of the 2010 Price-Waterhouse-Coopers report mentioned in the article - clearly PWC believed the business was in trouble over a year ago.

http://www.cnbc.com/id/44548432

Vested.

[dydx]

After buying back 179 lots at $0.18/share on 19Sep11.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument
, today (23Sep11) Cheung Woh bought back another 103 lots at $0.18/share.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument

Todate, Cheung Woh has bought back a total of 896,000 shares - all being held as treasury shares.

At the current low share price, Cheung Woh's continued efforts to buy back its own shares - likely in anticipation of the incoming funds from the previously announced disposal of a partital interest in its vehicle parts business in PRC - will raise both the EPS, NAV, and intrinsic value, of the remaining shares. Great!

[dydx]

Today (26Sep11), Cheung Woh bought back a massive 1,082 lots (comprising all the shares transacted)all at $0.18/share.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument

[Musicwhiz]

Cheung Woh has just released their 1H FY 2012 financial statements ending Aug 31, 2011.

http://info.sgx.com/webcoranncatth.nsf/V...6001F9F6F/$file/CheungWoh_2nd_Quarter_FY2012.pdf?openelement

Net profit fell, gross margin was down and OCF was also -ve.

An interim dividend of 0.3 cents/share was declared, down 40% from last year's 0.5 cents/share.

Any comments?

(Not Vested)

[dydx]

As the 1H (ended 31Aug11) results announcement does not provide details on Q2, to focus and better understand how Cheung Woh actually performed in Q2, we will have to also make a reference to the Q1 (ended 31May11) results....
http://info.sgx.com/webcoranncatth.nsf/V...A002CA521/$file/CheungWoh_Results_Announcement-1QFY12.pdf?openelement

If we add back the one-off total specific provisions of $1.57m -comprising doubtful trade receivables ($853k), impairment on production equipment ($461k) and write-down of inventory ($256k) - related to the bankruptcy of Solyndra, Cheung Woh would have a PBT from normal operation of approx. $2.1m in Q2, which is probably the seasonally slowest quarter for HDD. Apart from Solyndra, Cheung Woh's cash flow from collection of trade receivables should remain acceptable.

Assuming no problem with the partial sale of the PRC-based automotive component business, Cheung Woh's B/S should become a much strong one when the sale is consumated (expected by Feb12). I suppose that's the main reason behind Cheung Woh's management and BOD taking the decisions to buy back shares and pay out another Interim dividend of $0.003/share.

[dydx]

Today (12Oct11), Cheung Woh resumed buying back its own shares, and bought back 269 lots at an average $0.16918/share (out of a total 494 lots transacted between $0.0168 to $0.17).....
http://info.sgx.com/webcorannc.nsf/Annou...endocument

Todate, Cheung Woh has bought back 2,247 lots, or 0.7177% of the total issued shares.

[RBM]

Thank you for sharing this information on Cheung Woh (again) dydx - it is indeed heartening that Cheung Woh is "buying back" when the share price is so depressed,

I apologise to VB forummers if what follows is a dumb and/or a stupid question ...........

Yesterday Cheung Woh announced an interim dividend of Scents 0.3 per share - this was 40% down from last years interim of SCents 0.5 per share. It is clear from the half yearly return that Cheung Woh had both the cash and the retained earnings to maintain the interim dividend payout at last years' level - yet Cheung Woh's BoD declined to do so, instead focussing cash resources on share buy-backs.

My question is ......... from a shareholder perspective wouldn't it have been better to maintain the interim dividend at SCents 0.5 per share even if this results in a reduced level of share buy-backs? What is better for the shareholders of a company like Cheung Woh ............ a higher dividend level or more share's bought back?

From my perspective I would have preferred last years interim dividend level to be maintained. Dividend stability is a virtue, particularly in the current market environment. Of course there is possibility that Cheung Woh's BoD compensates the lower interim dividend by a higher final payment next April, after (hopefully) the China transaction has secured all necessary approvals and Cheung Woh has a tad more cash.

Again, I apologise if this is a dumb question.