Avi-Tech Electronics

[sgpunter]

http://infopub.sgx.com/Apps?A=COW_CorpAn...KuyQiuUc00

CEO bought more shares at $0.078 yesterday. The accumulation has been pretty relentless and the upcoming financial results should be watched closely.

I have a very strong feeling that Avi-Tech has turned around and we should expect dividends to be resumed at year end. Traditionally, its dividend payout has been not too shabby and I would think a reward for shareholders for the last few barren years is in the pipeline.

[MOV]

Indeed boss Lim buying is a good sign, need to watch next few quarters to ascertain if company has indeed turned around. The latest company statement seems to suggest it is still looking for acquisitions, I would rather they focus on improving core business and not buy anything which is not in their circle of competence.

[secretinvestors]

Indeed boss Lim buying is a good sign, need to watch next few quarters to ascertain if company has indeed turned around. The latest company statement seems to suggest it is still looking for acquisitions, I would rather they focus on improving core business and not buy anything which is not in their circle of competence.

I did a simple write-up in my blog about avi-tech. I agree that they should focus more on improving their core business despite their belief that the long-term outlook of the semi-conductor industry ain't going to be spectacular.

Their refusal to pay dividends recently despite their huge amount of cash in the balance sheet suggests that they may need it for acquisitions and these acquisitions might not be small. Management buy-back is definitely a good sign but they have been buying shares since a couple of years back. Results so far has been mediocre.

Let's hope after this bad experience, they have learnt to become more prudent in both future acquisitions and management of core business!

[secretinvestors]

CIMB recently released their maiden report about Avi-tech. Some new insights can be gleaned from it such as their top customers (not sure why I didn't notice these when I browsed through its annual report) etc. But all in all, we should take it with a pinch of salt..

https://brokingrfs.cimb.com/2ImBfcFsa3fj...OCLLk1.pdf

[MOV]

Since 10 Nov release of 1Q results, Avi-Tech has risen by around 55% from 5.8cts to last close of 9.0cts. Their half year results due next week should show positive recovery of their burn-in business as well as liquidation claw back of US assets. At 9.0cts, it is traded above cash of 7.9 cts but below NAV of 11.68 cts. Not forgetting their office property is based on historical depreciated cost.

Will there be further corporate actions and/or positive surprises?

[MOV]

Q2 results just released confirms the continuing recovery in Avi-Tech's core business with an increase of 45.9% in revenue and 122% improvement in gross profit. In the same period, company has also claw backed further liquidation value of $1.46m from the discontinued US business. Will the company be able to make further inroads in growing the Automotive side as more electronics and sensors are embedded in smart cars and smart mobility?

Surprised that the company also declared interim dividends of 0.3 cents, a timely angbao from Boss Lim!

[sgpunter]

A very good set of results that shows improving operational performance coupled with a very optimistic message coming from Management which is most encouraging! As I had predicted earlier, dividends have been resumed and all things being equal, we should expect another payout coming year end barring any unforeseen circumstances.

Only point sticking out for me is that a large part of their cash amounting to $17.42m was placed in fixed deposits of >3 months. This might signify that the Management is very prudent but on the flip side, it could also show that they do not know what to do with their cash hoard.

[secretinvestors]

Agree that its a good set of results for Avi-Tech. The current uptrend in the semi-conductor industry plus ongoing management actions to dispose the loss-making subsidiaries and cut costs in continuing operations should bode well for Avi-Tech at least for the next few quarters. Share buyback in the past months coupled with resumption of dividends after >3 years clearly shows management's confidence about the company's prospects. Just hope that they will use the cash on hand more prudently and not waste it away like what they did last time!

[BlueKelah]

Agree that its a good set of results for Avi-Tech. The current uptrend in the semi-conductor industry plus ongoing management actions to dispose the loss-making subsidiaries and cut costs in continuing operations should bode well for Avi-Tech at least for the next few quarters. Share buyback in the past months coupled with resumption of dividends after >3 years clearly shows management's confidence about the company's prospects. Just hope that they will use the cash on hand more prudently and not waste it away like what they did last time!

Looking at the report, losses from discontinued operations was more then continued operations last year but this year it seems more profit was made this half year from the previously loss making subsidiaries than continued operations.

Could this mean the more profit making parts have been cut off prematurely? OUCH....

[BeDisciplined]

I checked the Q2 result, under the disposed business section, the profit has an asterisk

* Includes sales and recovery of impaired assets

I don't think it is pure operational profit per se.

Any accountant, pls share professional interpretation. Thanks