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12-08-2017, 01:59 PM,
Post: #171
RE: TeckWah
(12-08-2017, 10:53 AM)gutman Wrote:
(27-02-2017, 10:55 AM)gutman Wrote: Teckwah seems to do well operationally. Even at recent price, the stock does not look expensive given that it trades at  0.718x NAV and gives a yield of 4.44% based on current price, with 1/4 of its share price backed by cash. Gearing stood at a low of 9.2%.

However, I think they need to improve on their investor relations.

Management needs to address the issue of liquidity as well as a lack of media attention. It has very low trading volume and no media covers them. Their latest full year result is not even picked up by Business Times or The Straits Time. I think no analyst covers them.

Apart from the financial ratios, I still have the same comments as mentioned above.

Teckwah is a good company i agree, but i took some profit at 50+ levels due to its all time high price now relative to historical. But with the increase in div last year, thomas chua might have anticipated an earnings boost going forward as the company is conservative always paying out 1/3 of earnings. So we should see some positive earnings correlations going forward and hence price resilience.

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15-11-2017, 09:23 PM,
Post: #172
RE: TeckWah
Teckwah operates a highly-competitive print business and has diversified into providing logistical services. Although -- or perhaps because -- it has been moving into higher value-add business, its operations continue to be capital-intensive. However, the results of its efforts on increasing returns to shareholders remain to be seen.

While Techwah has consistently been generating operating cash flow, most of it has been reinvested and/or kept as working capital, rather than dished out to shareholders. Even when cash levels were high, it was kept as WC, and was eventually reinvested into the business (Pixel Red).

For the last decade -- from FY07 to FY16 -- Techwah produced $170m of operating cash flow. From this amount, $110m was used in investing cash flow. This mean $60m of free cash flow was produced for the last decade. Of this amount, $45m was paid as dividends, and the remaining $15m kept as working capital. This means that Teckwah pays out 26% of its OCF as dividends, and retains a whopping 74% for the business.

Dividend and ROE history
FY16: $3.5m; 9.3%
FY15: $3.6m; 9.0%
FY14: $3.5m; 6.7%
FY13: $2.4m; 9.9%
FY12: $4.6m; 7.8%
FY11: $3.5m; 11.3%
FY10: $7.0m; 12.5%
FY09: $3.7m; 12.8%
FY08: $1.8m; 4.8%
FY07: $11.9m; 9.3%

More than 2 years after Pixel Red has been completed, ROE in FY15 and FY16 remains within its 10-year average of 9.3%. It is not a good business to be in if you have to constantly pour more money in just to maintain the profitability. The print business of Teckwah is like that textile business of Berkshire Hathaway. This is probably the reason why Teckwah is priced below book value, and will remain so, until there is some material change to the company or business.

Data from its latest 9M17 results is congruent with what has been described here.

Clearly, Thomas Chua knew that either he spends more money (to attempt) to reinvent his business in the very competitive print industry, or slowly fade away. As a recent past president of SCCCI, he has to lead the SMEs by demonstrating the former, or lose face for allowing the latter.

Teckwah still has a nice cash pile of $33m. Will it continue to reinvest, or return to shareholders?

Here are some of the older ARs not found on SGX or its website:

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