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VicPlas International
25-03-2013, 11:22 AM.
Post: #1
VicPlas International
Any view on this company, bros?

VicPlas International Ltd is a Singapore-based company engaged in the research, design, development and manufacture of medical devices through its wholly owned subsidiaries, Forefront Medical Technology (Pte) Ltd in Singapore and Forefront Medical Devices Co., Ltd in China. It is also engaged in the manufacturing and distribution of plastic building products, including unplasticised poly vinyl chloride pipes and pipe fittings and electrical conduits through its wholly owned subsidiaries, VicPlas Holdings Pte Ltd in Singapore and Rimplas Industries Sdn. Bhd. in Malaysia. It operates in two segments: Pipes and pipe fittings, which is engaged in Manufacturing, trading and distributing of pipes and pipe fittings, and Medical devices, which is engaged in Manufacturing and developing medical devices. On March 28, 2012, it’s wholly owned subsidiary, Forefront Medical Investment Pte. Ltd., incorporated a wholly owned subsidiary, Forefront Medical Technology (Jiangsu) Co. Ltd. in China.

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27-07-2013, 12:52 AM.
Post: #2
RE: VicPlas International
Extracted from FY09 financial statement:

Quote:Exceptional item in the current year of $16.07 million relates to the impairment loss on goodwill and intangible assets. This
exceptional item is one-off and has no impact on the cash and net tangible assets of the Group. The goodwill arose from the
Group’s acquisition of 50% of Forefront Medical Technology (Pte) Ltd (“FMT”) in July 2007 due to the purchase price being
higher than the net tangible assets attributable to the shares acquired. The purchase price was negotiated under the then prevailing
and more buoyant market conditions. The intangible assets largely arose in FY 2008 when there were greater expectations of
future cash flow to be generated from these intangible assets. While Management continues to have a high degree of confidence
and is cautiously optimistic about the future growth of FMT, it would be prudent for the Group to write off the goodwill and
intangible assets after considering the uncertainties prevailing in the current market place, the FY 2009 results of the medical
devices segment, the announced plans of our key customer and the significant judgment involved in ascertaining an exact value of
FMT in view of the foregoing.
Excluding the exceptional item, the Group would have recorded a net profit before tax of $2.56 million in FY 2009.

At the end of FY09, book value was only 33.6mil, meaning the impairment was huge proportional wise.

Reminds me of why need to be wary of goodwill/intangibles. Three years on FY10, FY11, FY12 total net income of 12.1 mil still not enough to cover back the impairment...

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27-07-2013, 09:58 AM.
Post: #3
RE: VicPlas International
I want to see the write-off as a prudent move. I myself don't like a lot of intangible assets in the balance sheet. However, it does affect the dividend payout even though the company still made money.

Maybe the wrong thing is why the management valued the acquisition too high.

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