CEI Limited (formerly: CEI Contract Manufacturing)

[Ray168]

CEI proposed consolidation of 4 into 1.

Share consolidation 4 into 1.

[Ray168]

CEI Book to Bill Ratio has improve but still not at healthy range yet. The challenge is if CEI could consistently secure contracts ahead of billing.

Net margin was ~7.5% prior to 2009 crisis and stay ~3.3% for last 3 years. In FY2014 it archived 4.2% or 27% improvement. A sign of turning around to be more profitable.

IMO, a high mix and low volume CEM, it's net margin should be > 6%.



.....................Revenue......Gross Profit......Net Profit......Order Book.... BTB
1HY2013........54.173M......11.528M...........2.065M........46.0M........... 0.85
2HY2013........55.490M......12.599M...........1.573M........47.3M .......... 0.85
1HY2014........56.510M......12.894M...........2.261M........58.2M .......... 1.03
2HY2014........64.812M......16.451M...........2.947M........59.8M ......... 0.92

Did a quick study on the company financial performance.

.....................Revenue......Gross Profit......Net Profit......Order Book
1HY2013........54.173M......11.528M...........2.065M........46.0M
2HY2013........55.490M......12.599M...........1.573M........47.3M
1HY2014........56.510M......12.894M...........2.261M........58.2M
2HY2014........64.812M......16.451M...........2.947M........59.8M

From what is seems, their order book tends to be completed by next half yr, with a little bit more extra. Thus, a better 1HY2015 will be expected? And more dividend to be announced?

[NTL]

CEI Book to Bill Ratio has improve but still not at healthy range yet. The challenge is if CEI could consistently secure contracts ahead of billing.

Net margin was ~7.5% prior to 2009 crisis and stay ~3.3% for last 3 years. In FY2014 it archived 4.2% or 27% improvement. A sign of turning around to be more profitable.

IMO, a high mix and low volume CEM, it's net margin should be > 6%.



.....................Revenue......Gross Profit......Net Profit......Order Book.... BTB
1HY2013........54.173M......11.528M...........2.065M........46.0M........... 0.85
2HY2013........55.490M......12.599M...........1.573M........47.3M .......... 0.85
1HY2014........56.510M......12.894M...........2.261M........58.2M .......... 1.03
2HY2014........64.812M......16.451M...........2.947M........59.8M ......... 0.92

Did a quick study on the company financial performance.

.....................Revenue......Gross Profit......Net Profit......Order Book
1HY2013........54.173M......11.528M...........2.065M........46.0M
2HY2013........55.490M......12.599M...........1.573M........47.3M
1HY2014........56.510M......12.894M...........2.261M........58.2M
2HY2014........64.812M......16.451M...........2.947M........59.8M

From what is seems, their order book tends to be completed by next half yr, with a little bit more extra. Thus, a better 1HY2015 will be expected? And more dividend to be announced?

Hi Ray,

What will be considered as healthy for book-to-bill? Above 1? As the contracts are likely to be short term, and complete within half a year, there must be a big order just before the end of announcement period for that to happen?

I will need to spend a little more time to understand the company. Any inputs will be appreciated.

Thanks.

[Ray168]

Hi NTL,

Yes, generally BTB > 1 is healthy. I would prefer BTB 1.1 and above.

I think most of the booking are repeated order and thus the turn around time is shorter. Customers expect shorter leadtime and cheaper.

For new orders, it will takes longer time due to negotiation, SCM, learning curve and 1st article buy off.

Hi Ray,

What will be considered as healthy for book-to-bill? Above 1? As the contracts are likely to be short term, and complete within half a year, there must be a big order just before the end of announcement period for that to happen?

I will need to spend a little more time to understand the company. Any inputs will be appreciated.

Thanks.

[NTL]

Hi NTL,

Yes, generally BTB > 1 is healthy. I would prefer BTB 1.1 and above.

I think most of the booking are repeated order and thus the turn around time is shorter. Customers expect shorter leadtime and cheaper.

For new orders, it will takes longer time due to negotiation, SCM, learning curve and 1st article buy off.

Hi Ray,

What will be considered as healthy for book-to-bill? Above 1? As the contracts are likely to be short term, and complete within half a year, there must be a big order just before the end of announcement period for that to happen?

I will need to spend a little more time to understand the company. Any inputs will be appreciated.

Thanks.

Am I right to say that a BTB of 1.1 will mean that CEI's revenue is growing by at least 10% every half yearly?

[Ray168]

Yes if CEI still has surplus production capacity to cope with demand.

Hi NTL,

Yes, generally BTB > 1 is healthy. I would prefer BTB 1.1 and above.

I think most of the booking are repeated order and thus the turn around time is shorter. Customers expect shorter leadtime and cheaper.

For new orders, it will takes longer time due to negotiation, SCM, learning curve and 1st article buy off.

Hi Ray,

What will be considered as healthy for book-to-bill? Above 1? As the contracts are likely to be short term, and complete within half a year, there must be a big order just before the end of announcement period for that to happen?

I will need to spend a little more time to understand the company. Any inputs will be appreciated.

Thanks.

Am I right to say that a BTB of 1.1 will mean that CEI's revenue is growing by at least 10% every half yearly?

[NTL]

Yes if CEI still has surplus production capacity to cope with demand.

From their website, they have a plant in Shanghai. It is not in their 2013 report. There is also no significant increase in their fixed assets. Is this a recent one? If so, maybe they can cope with any increase in production, and reason for the increase in $8M extra revenue for last half year.

[weii]

Dear NTL,

CEI's order book in 2HY2014 is strong at $59.8 mil versus $58.2 mil in 1HY2014. Net profit for 2HY2014 is $2.779 mil. If we make the assumption that net profit remains the same as 2HY2014 throughout 2015, it will be $5.558 mil (or 1.6 cents per share) for the whole year. Assuming a similar dividend payout ratio of 69%, potential dividend for the whole of 2015 may be 1.1 cents. Potential dividend yield may be 9.7% at current price of $0.113.

Capex (Purchase of fixed assets) has decreased in 2014 to $1.229 mil from $2.581 mil in 2013 and $2 mil in 2012. If low capex persists in 2015, a high dividend payout ratio of 69% could continue in 2015.

CEI's past dividend record can be seen at http://www.sgx.com/wps/portal/sgxweb/hom...ate_action

Choose CEI for Company Name and under Category choose Dividend, it can be seen that CEI has been paying dividend every year. Dividend for year 2005 to 2001 is listed on Page 3.

Did a quick study on the company financial performance.

.....................Revenue......Gross Profit......Net Profit......Order Book
1HY2013........54.173M......11.528M...........2.065M........46.0M
2HY2013........55.490M......12.599M...........1.573M........47.3M
1HY2014........56.510M......12.894M...........2.261M........58.2M
2HY2014........64.812M......16.451M...........2.947M........59.8M

From what is seems, their order book tends to be completed by next half yr, with a little bit more extra. Thus, a better 1HY2015 will be expected? And more dividend to be announced?

[NTL]

Dear NTL,

CEI's order book in 2HY2014 is strong at $59.8 mil versus $58.2 mil in 1HY2014. Net profit for 2HY2014 is $2.779 mil. If we make the assumption that net profit remains the same as 2HY2014 throughout 2015, it will be $5.558 mil (or 1.6 cents per share) for the whole year. Assuming a similar dividend payout ratio of 69%, potential dividend for the whole of 2015 may be 1.1 cents. Potential dividend yield may be 9.7% at current price of $0.113.

Capex (Purchase of fixed assets) has decreased in 2014 to $1.229 mil from $2.581 mil in 2013 and $2 mil in 2012. If low capex persists in 2015, a high dividend payout ratio of 69% could continue in 2015.

CEI's past dividend record can be seen at http://www.sgx.com/wps/portal/sgxweb/hom...ate_action

Choose CEI for Company Name and under Category choose Dividend, it can be seen that CEI has been paying dividend every year. Dividend for year 2005 to 2001 is listed on Page 3.

Hi weii,

Thanks for pointing out the link. I was actually going thru all the announcements to figure out their dividend...

The strong order book and the high dividend, are good enough for me to put a bet with this company. Hope that things will get better and all shareholders will prosper together!

恭喜发财！

[NTL]

Dear NTL,

CEI's order book in 2HY2014 is strong at $59.8 mil versus $58.2 mil in 1HY2014. Net profit for 2HY2014 is $2.779 mil. If we make the assumption that net profit remains the same as 2HY2014 throughout 2015, it will be $5.558 mil (or 1.6 cents per share) for the whole year. Assuming a similar dividend payout ratio of 69%, potential dividend for the whole of 2015 may be 1.1 cents. Potential dividend yield may be 9.7% at current price of $0.113.

Capex (Purchase of fixed assets) has decreased in 2014 to $1.229 mil from $2.581 mil in 2013 and $2 mil in 2012. If low capex persists in 2015, a high dividend payout ratio of 69% could continue in 2015.

CEI's past dividend record can be seen at http://www.sgx.com/wps/portal/sgxweb/hom...ate_action

Choose CEI for Company Name and under Category choose Dividend, it can be seen that CEI has been paying dividend every year. Dividend for year 2005 to 2001 is listed on Page 3.

Hi weii,

Any idea about the Shanghai's office/factory/watever-it-is? It is shown in the company website under "Contact Us". Yet it is not mentioned in any annual report or announcement.