Fischer Tech

[bear]

Proposed consolidation of every 5 existing ordinary shares into 1 ordinary share,so as to meet SGX minimum trading price of S$0.20.

http://infopub.sgx.com/FileOpen/Announce...eID=355432

[Big Toe]

Fischer tech has a better track record compared to fuyu.
A more prudent company overall and corporate culture is somewhat like one of its owners, venture corp, which is a good thing.

Fuyu share price outperformed Fischer tech recently as fuyu was beaten down so badly that any positives translate to a huge upside.
Time to re-look Fischer tech. Not a fantastic business, but with decent dividends and oil prices sustaining their lows, it's probably a good time to take a chance.

[BlueKelah]

While downtrend in oil price may be a plus, the automotive industry in China is already slowing in terms of growth and will be facing headwinds given their recent stock market rout and general economic slowdown.

At current prices div yield would be around 4.88%, decent but not really juicy enough, given the high earnings reached this FY15.

However other metrics look good with a decent 40% discount to NAV and high net cash position and there could be further upside.

-n v-

[Big Toe]

Some insights into Automotive Industry and Fischer Tech.
It is huge market and Fischer barely scratched the surface.
It's a matter of Fischer tech's ability to win contracts/programs rather than whether autos are slowing in China.
Market share of plastic/assembly components for them probably don't even make up 1% of on-going auto projects in china.
Maybe they have 0.000000000000001% of the market globally.(Figures for illustration purpose only, but you get the drift)

[yawnyawn]

Fischer tech has a better track record compared to fuyu.
A more prudent company overall and corporate culture is somewhat like one of its owners, venture corp, which is a good thing.

Fuyu share price outperformed Fischer tech recently as fuyu was beaten down so badly that any positives translate to a huge upside.
Time to re-look Fischer tech. Not a fantastic business, but with decent dividends and oil prices sustaining their lows, it's probably a good time to take a chance.

Fischer Tech is slightly cheaper than Fu Yu right now.

At $0.205, Fischer Tech has a market cap of S$55M. Based on 2014AR, Fischer Tech has net cash of ~S$26M. Company made S$7.5M in 2014. net cash, company is trading at 4x earnings.

Tangible Book is S$90M so P/NTA is 0.61x.

As compared to Fu Yu's market cap of S$140M and net cash of $94M at $0.200, Fu Yu is trading at 4.2x earnings. Book is S$181M so P/B is 0.77x.

However, free float of Fischer Tech is ~23.6% of outstanding shares against Fu Yu's 46.55%. And average 30-day volume of the shares traded is 93K(Fischer) v.s. 7.7M(Fu Yu). Therefore, it is easier for an investor to accumulate shares of Fu Yu.

(vested in Fu Yu)

[dydx]

Proposed consolidation of every 5 existing ordinary shares into 1 ordinary share,so as to meet SGX minimum trading price of S$0.20.

http://infopub.sgx.com/FileOpen/Announce...eID=355432

The proposed 5-into-1 Share Consolidation will reduce the existing 273.205m issued shares to only 54.641m shares after the exercise, which will likely make the counter even more illiquid and more difficult to buy/sell. Using the last done share price of $0.20 as reference, the theoretical post-Share Consolidation share price would become $1.00, which will be backed by a NAV/share of $1.70 (after adjusting for the proposed total $0.01/share in final/special dividends for FY15 which will be based on the existing issued share base). Assuming the same dividend payout, Fischer would likely pay $0.05/share in yearly dividends post-Share Consolidation.

Latest FY15 (ended 31Mar15) AR of this fine company.....
http://infopub.sgx.com/FileOpen/FISHER_T...eID=360213

[Big Toe]

Liquidity is a concern due to the very small float and lack of interest.
Not a good counter to easily accumulate and sell. Volume is pathetic on most days.
Nevertheless, it's ultimately the business fundamentals/valuation we should be more concerned about.
Liquidity will probably take care of itself as time goes by as more people start looking for value in this market and start hunting for companies benefiting from the lower oil prices.

Recently vested
The toe speaks, the market moves.(just a little bit)

[dydx]

Small and less profitable competitor Chosen Holdings is being privatised by way of a GO at $0.24/share cash from a value-oriented PE fund managed by Shaw Kwei & Partners Ltd.....
http://infopub.sgx.com/FileOpen/ChosenOf...eID=368222
http://www.shawkwei.com/index.html

At $0.24/share, the GO is close to Chosen Holdings' latest (as at 30Jun15) NAV/share at $0.2377.....
http://infopub.sgx.com/FileOpen/FY2015%2...eID=366132

If we apply the same valuation yardstick, any potential GO for Fischer Tech's just completed 5-into-1 consolidated shares should be at approx. $1.75 (5x of latest 30Jun15's NAV/share at $0.3504).....
http://infopub.sgx.com/FileOpen/FT_Annou...eID=353165

[(cy)]

not easy to find companies at such depressed valuations yet have an extremely solid business fundamentals.

- positive operating cash flow
- consistently profitable
- trading at around 0.5 P/B
- EV/EBITDA of just 1.1
- net cash position of about S$25mil representing more than half of market cap

with management trying to buy-out the company previously - shows a lot of intrinsic value in the company not realised by the market.

[dydx]

Surprisingly, Fischer's share price has not followed the overall SGX market downwards and has remained relatively stable in the last 3 months, after the most unusual 5-into-1 share consolidation exercise. Using Lantrovision as an example, would Fischer become another privatisation case any soon?

Perhaps it is timely to take a better look at the latest 1HY (ended 30Sep15) result.....
http://infopub.sgx.com/FileOpen/Fischer-...ID=377832S