Fischer Tech

[dydx]

I was quite surprised by last evening's (18Jan12) announcement by Meiban on a possible offer for the company.....
http://202.65.242.23:9204/061D7FCBAC8111...900515E95/$file/Meiban_Holding_Announcement_120118.pdf?openelement
Meiban's share price shot up by $0.07 today, to close at a high of $0.35, vs. its latest (30Sep11) NAV/share of $0.459.....
http://202.65.242.22:9205/061D7FCB0DB7A0...4002B1757/$file/MGL_Results_30Sep11.pdf?openelement

The business of producing plastic parts has been suffering from high/rising material and other costs, competition, and customers' cost-down pressures. But as in any business, there are better managed companies, and I suppose Meiban is one of them in the plastic parts business.

I thought Fischer Tech could be another one, but Mr Market has been most relentless in marking down its share price to as low as only $0.041 (9Jan12), vs. its latest (as at 30Sep11) NAV/share of $0.2746.....
http://202.65.242.23:9205/061D7FCBE30888...80036754F/$file/FT_Announcement_Sep_2011_Final.pdf?openelement

Relative to Meiban's latest share price vs. NAV/share, it appears that there is now a rather compelling value investing situation existing in Fischer Tech.

More info on this low-profile company.....
http://www.fischer.com.sg/index.html
http://info.sgx.com/listprosp.nsf/07aed3...f002c50a4/$FILE/fischer%20tech%20AR%202011.pdf

[ngcheeki]

The company last dividend was in 2007, perhaps that explains why the share price has been so low. However, I agreed that the NAV/share of $0.2746 look attractive compared to last transacted price of 4.1 cents.

FISCHER TECH LTD DIVIDEND 8 Aug 2007 13 Aug 2007 30 Aug 2007 SGD 0.003 LESS TAX
FISCHER TECH LTD DIVIDEND 8 Aug 2007 13 Aug 2007 30 Aug 2007 SGD 0.009 LESS TAX
FISCHER TECH LTD DIVIDEND 4 Aug 2006 8 Aug 2006 23 Aug 2006 SGD 0.009 LESS TAX
FISCHER TECH LTD DIVIDEND 4 Aug 2006 8 Aug 2006 23 Aug 2006 SGD 0.006 LESS TAX
FISCHER TECH LTD DIVIDEND 5 Aug 2005 10 Aug 2005 23 Aug 2005 SGD 0.009 LESS TAX
FISCHER TECH LTD DIVIDEND 5 Aug 2005 10 Aug 2005 23 Aug 2005 SGD 0.006 LESS TAX
FISCHER TECH LTD DIVIDEND 23 Jul 2004 27 Jul 2004 10 Aug 2004 SGD 0.009 LESS TAX
FISCHER TECH LTD DIVIDEND 23 Jul 2004 27 Jul 2004 10 Aug 2004 SGD 0.006 LESS TAX
FISCHER TECH LTD DIVIDEND 29 Aug 2003 2 Sep 2003 18 Sep 2003 6% LESS TAX
FISCHER TECH LTD DIVIDEND 6 Sep 2002 10 Sep 2002 25 Sep 2002 4% LESS TAX

since 2007, the company performance has not been good and that explained why there was no payment of dividend after 2007. Furthermore, the company's factory is affected by Thailand flood and this year likely to be another no dividend year for the company. Another negative about this stock is low liquidity. Last meaningful transaction volume was in 23 Dec 2011 with a volume of 100 lots.

Profit/(loss) for the year from 2007 to 2010 : 5,632 (5,096) (4,087) 1,109 1,140

Perhaps, Innotek is a better comparison to Meiban in term of balance sheet and historical performance.

vested in innotek.

[RBM]

Interesting and thoughtful couple of posts on this thread last Thursday.

I have been looking at Fischer Tech for a couple of months now, seeing how hard it has been bashed by Mr. Market. I know I am not smart enough to ever catch the bottom of the market for this but I worry it could yet go down materially further - even potentially struggle to remain viable if it receives another body-blow - so I have elected to put my S$ in other small/tiny-cap counters............ for the time being.

I see "metals-fabricator" Innotek is a much larger beast (8-9 times the market cap) than "plastics fabricator" Fischer Tech and one which has not sufferred the pounding to the degree (in % terms) that Fischer Tech has. The mid-2001 IPO price of Fischer Tech was S$ 0.38, so it has lost ~ 85% of its value since listing ~ 10 years ago. Innotek's share price has had a ~ 20% rebound so far in 2012, and is now only about 1/3rd down from its 2011 peak.

I still believe Fischer Tech is worth keeping an eye on near term - I am trying to make a judgement on the calibre of their management (I find this darn difficult - they are extremely low key and their IR appears non-existant, which sometimes means its a buying opportunity!). I know it is in a completely different line of business ......... but the tiny-cap "manufacturing" counter I favour at the moment is LHT Holdings, a manufacturer of wooden pallets and "technical wood".

Not vested in Innotek
Not vested in Fischer Tech
Vested in LHT Holdings
RBM

[dydx]

Apart from Fischer Tech's founder/President & CEO Tan Choon King holding a 17.43% interest and ED/VP-Engineering Tay Kok Leong holding a 2.37% interest in the company, I am also very much encouraged by the fact that Fischer Tech has 3 other large listed corporates - Amtek Engineering and Venture Corp, each holding a 19.16% interest; and Ono Sangyo Co Ltd (Japanese; listed on JASDAQ) holding a 15.7% interest - as long term shareholders.

I believe it is relevant to note that when Ono Sangyo invested in Fisher Tech in Apr10, the company paid $0.20 for each Fischer Tech share for its 15.7% interest.....
http://info.sgx.com/webcoranncatth.nsf/V...600363CA3/$file/announcementpteplacement.pdf?openelement [10Feb10 announcement]
http://info.sgx.com/webcoranncatth.nsf/V...60016F8D2/$file/PressRelease1april2010.pdf?openelement [1Apr10 press release]
IMHO, this is indicative of the substantially higher intrinsic value of each Fischer Tech share vs. its current depressed price.

More info on Ono Sangyo.....
http://www.onosg.co.jp/en/rhcm/index.html

[RBM]

I refer to dydx's postings on this thread of 19 and 21 January 2012,

Hats off to you dydx. Since your postings of two weeks ago highlighting this somewhat unloved counter, Fischer's share price has gone up by about seventy-eight percent (~ 78%), albeit in volumes which are meagre, averaging ~ 40,000 shares a day. Looks like you called the bottom - spectacularly so.

Not vested (regrettably),
RBM

[dydx]

Fischer Tech's recent historical low share price at $0.041 (first recorded on 9Jan12) - equivalent to only 14.9% of its corresponding latest (as at 30Sep11) NAV/share of $0.2746! - was clearly a situation of temporary gross under-pricing by Mr Market.

Even at the last done share price of $0.073 (recorded on 2Feb12) - equivalent to still only 26.6% of its corresponding latest (as at 30Sep11) NAV/share of $0.2746! - the gross under-pricing situation remains acute. While there is little profits to talk about now, we should bear in mind that Fischer Tech has good, modern production fixed assets and an experienced and properly supervised management team, and continues to generate a positive FCF (after adding back depreciation and other one-off non-cash items, and accounting for capex).

[dzwm87]

Plastic injection molding industry has been taking quite a hit lately. In fact, I think the industry is very pegged to business cycle. Unless there is an economic boom, it hard to see them experiencing a substantial boom - given its manufacturing nature.

But one key note is that surprisingly, such plastic injection molding companies key to generate quite a decent amount of FCF - something contrary to manufacturing firms which often have cash-burning business model (e.g. buy machines to produce huge volume but narrow margin product, when technology advanced, spend even more to keep up with advancement)

Looking at Meiban, it has a good FCF track record - positive ever since FY06. Its other peers such as Chosen, has also managed to generate +ve FCF, with only FY11 yielding a negative. Fu Yu, though has been burning cash and making loss in 5 out of 6 past years. (but trading below net cash! means getting a loss-making business for free! good or bad? )

As for a relative comparison on P/B, I don't think warranting a 1x P/B valuation will be a fair valuation. Remember, textbook valuation always priced in 1x P/B as the logical pricing but many a times, in reality, reasonable discounting can drive it to less than 1x P/B. Looking at the peers again, Meiban was trading at around 0.6x P/B, Chosen at around 0.4x P/B while Fu Yu is trading at 0.3x P/B. These range gives a very reliable gauge of market's valuation to the industry. Unlike Mr Market is driving down the entire industry with an absurd valuation (highly unlikely), It should be reliable to pegged Fischer Tech to around 0.4 to 0.5x P/B with Meiban being the best (no doubt) and Fu Yu at the other end of the scale.

Fischer priced at 0.27x P/B does prove a probable two-bagger - subjected to a consistent performance. It would have been even more attractive when it was trading at $0.041 - a mistake made when I go past this thread post (just show how much an opportunity can be determined by just a single mouse click)

I have not researched in detail for Fischer but the above is just my two cents worth from analysing Meiban (which I have a feeling there is too much risk in chasing its potential takeover deal)

*not vested*

[dydx]

Today (6Feb12), with a small volume transacted of only 31 lots, Fischer Tech shot up $0.026 or 35.6%, to close at $0.099. As Fischer Tech at the current low price level/range remains an illiquid counter, the buyer(s) are rather bold but can't be speculators. Some smart money at work here?

[D123]

Today (6Feb12), with a small volume transacted of only 31 lots, Fischer Tech shot up $0.026 or 35.6%, to close at $0.099. As Fischer Tech at the current low price level/range remains an illiquid counter, the buyer(s) are rather bold but can't be speculators. Some smart money at work here?

Hi, can you please explain why the buyer(s) can't be speculators?

[dydx]

Hi, can you please explain why the buyer(s) can't be speculators?

How many speculators - i.e. day-traders or contra-traders - would have the guts to pay a sharply higher price (percentage wise) on an illiquid/low-volume stock like Fischer Tech??