Sarine Technologies

[CityFarmer]

At its recent low – PE was around 25 – overvalued or not – share price has rebounded roughly 20% since - be it weighing machine or voting machine at work

Going forward, the key questions are:

1) Is the current slower growth experienced by Sarine only a temporary setback?
2) Could Sarine resume its usual HIGH growth rate?
3) Could Sarine maintain its technological competitive advantage to constantly come out with innovative products to fend off any meaningful competition?
4) Has too much future growth been priced in AGAIN in the share price?

(vested)

I have been monitoring the company.

The question (1) and (2) are related. India market contributed more than 75% of revenue, while India market is having issue to maintain its world's top diamond polisher status.

http://www.reuters.com/article/2014/12/2...JL20141226

The company has practically no presence in China market. I am not sure the impact. My answers are, the current slower growth might not be temporary, and A high growth of 30-40% is unsustainable.

(not vested, and monitoring)

[Jacmar]

At its recent low – PE was around 25 – overvalued or not – share price has rebounded roughly 20% since - be it weighing machine or voting machine at work

Going forward, the key questions are:

1) Is the current slower growth experienced by Sarine only a temporary setback?
2) Could Sarine resume its usual HIGH growth rate?
3) Could Sarine maintain its technological competitive advantage to constantly come out with innovative products to fend off any meaningful competition?
4) Has too much future growth been priced in AGAIN in the share price?

(vested)

Expensive? not at all. I was queuing on 24th dec to buy at 2.20 as on 23rd it closed at 2.18 but I did not manage to get it as it moved up non stop n I didn't want to chase. Missed opportunity to make some kopi money. 2 things prompt me to go in. 1) insider buying and share buy back by company 2) the counter was in play n was shot down by the shortist. If it ever comes down to 2.20 again I will be there to pick up some....shortist pls do your work!!

The way to look at Sarine is to look beyond the current business(polishing segment) which is facing a bit of headwind but to look at the game changer down the value chain which is a much bigger mkt size than the polishing segment. Question is are you prepared to pay for future growth now or wait till you see the 1st shoot.

[Boon]

Still game-changing; U/G to BUY

12 Janaury 2015, Maybank Kim Eng

https://factsetpdf.maybank-ke.com/PDF/CN...bdea93.pdf?

(vested)

[Boon]

PRESS RELEASE

Sarine and HRD Antwerp Collaborate to Offer System Interoperability

http://infopub.sgx.com/FileOpen/Press_Re...eID=332570

(vested)

[Boon]

Bloomberg TV Feature on Sarine
Kfar Saba, 18 February 2015 – Singapore Exchange Mainboard listed Sarine Technologies Ltd. (“Sarine” or “the Group”) (U77:SI), a worldwide leader in the development, manufacturing, marketing and sale of precision technology products for the evaluation, planning, processing, measurement and grading of diamonds and gems, is pleased to share a news item featuring Sarine Technologies on Bloomberg TV. The item was aired this morning and is available online at:
http://www.bloomberg.com/news/videos/201...technology

Sarine would like to take this opportunity to wish all its Chinese stakeholders a Happy Chinese New Year of the Goat. Gong Hey Fat Choy!

http://infopub.sgx.com/FileOpen/Press%20...eID=335662

(vested)

[Boon]

Revenue (USD million):
FY2010 = 45.663
FY2011 = 57.803 ( + 26.5% y-o-y)
FY2012 = 63.750 ( + 10.3% y-o-y)
FY2013 = 76.369 ( + 19.8% y-o-y)
FY2014 = 87.770 ( + 14.9% y-o-y)

NPAT (USD million):
FY2010 = 11.111
FY2011 = 17.366 ( + 56.3% y-o-y)
FY2012 = 20.755 ( + 19.5% y-o-y) ; growth-rate down y-o-y
FY2013 = 23.888 ( + 15.1% y-o-y) ; growth-rate down y-o-y
FY2014 = 27.230 ( + 14.0% y-o-y) ; growth-rate down y-o-y

GPM = Gross Profit Margin:
FY2010 = 64.3%
FY2011 = 66.2%
FY2012 = 68.1%
FY2013 = 71.5%
FY2014 = 70.5%

NPM = Net Profit Margin:
FY2010 = 24.3%
FY2011 = 30.0%
FY2012 = 32.6%
FY2013 = 31.3%
FY2014 = 31.0%

EPS (USD cent):
FY2010 = 3.30
FY2011 = 5.12 ( + 55.1% y-o-y)
FY2012 = 6.03 ( + 17.8% y-o-y) ; growth-rate down y-o-y
FY2013 = 6.87 ( + 13.9% y-o-y) ; growth-rate down y-o-y
FY2014 = 7.70 ( + 12.1% y-o-y) ; growth-rate down y-o-y

DPS (USD cent):
FY2010 = 1.60
FY2011 = 2.60 ( + 62.5% y-o-y)
FY2012 = 4.50 ( + 73.1% y-o-y)
FY2013 = 6.00 ( + 33.3% y-o-y)
FY2014 = 5.00 ( - 16.7% y-o-y)

Comments:
1) FY2014 result is down but is still better than my expectation – at least it was still growing.
2) It appeared to me that the “slower growth rate” is not a one-off recent issue – in fact, growth rate for NPAT and EPS have been slowing over the years since the peak in 2011.
3) GPM and NPM still look relatively healthy
4) DPS which had been growing over the years was reduced in FY 2014.
5) Slowing growth and reduced DPS are worrying trends…………..
6) Sarine really needs to prove to the market that it is capable of conquering and capturing the bigger market share down the value chain with its game changer products in order to arrest and reverse these worrying trends…………………Question is could it ?

(Vested – with profits only)

[CityFarmer]

An interesting update on Sarine Tech...

(not vested)

Sarine Technologies price target cut 5.7% to $2.98 by Maybank Kim Eng

SINGAPORE (March 6): Maybank Kim Eng has cut its price target for Sarine Technologies ( Financial Dashboard) to $2.98 from $3.16 after lowering its 2014 to 2016 earnings per share estimates by 3% to 8% to factor in slower sales stemming from a credit shortage in the diamond industry.

KBC Group, the Belgium-based holding company of Antwerp Diamond Bank (ADB), wound up its loan portfolio and ADB’s business after failing to sell the latter to China’s Yinren Group.

KBC was forced to sell ADB as part of conditions by the European Union for it to receive state aid in 2008-09. The deal fell apart after Yinren failed to submit the required filings to Belgian regulators on time.

"ADB was a huge source of finance for the Belgian diamond industry, funding a third of Antwerp’s diamond dealers. Its demise made loans scarcer in an industry which relies on debt to buy rough diamonds," Maybank Kim Eng analyst Yeak Chee Keong wrote in a note today.

Standard Chartered, another top financier in the diamond trade, has also scaled down its exposure to the business.

"While Sarine is not directly affected by the credit shortage given its strong US$40.7-million net-cash position with zero borrowings, many of its customers depend on credit to fund their business," said Yeak.

"The credit crunch could force them to cut spending on capital equipment in the short term."

Maybank Kim Eng has a "hold" call on the stock.

Sarine shares were up 0.4% at $2.82 at 9:15am (0115 GMT).
http://www.theedgemarkets.com/sg/article...nk-kim-eng

[sg550319]

hmm...today it fell 0.3.

[CityFarmer]

hmm...today it fell 0.3.

It may be due to the recent profit guidance

http://infopub.sgx.com/FileOpen/Press_Re...eID=343331

IMO, Sarine has technology edge, and moving to retail is also right (and likely disruptive), but it seems not able to re-act to the shift of market from India, to China. Sarine has no present in China market, IIRC.

(not vested, but interested once strategy changes)

[blade]

Will it be a good entry point at the current price and valuation? Also, anyone knows why they have not targeted China? Has management indicated any intention of entering that market at all?