Memtech International

[ngcheeki]

Based on the 3Q2011 result announcement in section 8 (Performance Review), Q3 2011 vs. Q3 2010 Results,

"The significant increase in exchange loss was caused by the strengthening of US$ against Singapore dollars
(SG$) in 3Q11. This exchange loss was mainly unrealised and resulted from the US$ inter-company advances
from a subsidiary in Hong Kong to the Company. As a result of the unrealised exchange loss, the Group
recorded a net profit of US$7,000 against a profit of US$3.0 million in Q3 2010. Taking the effect of foreign
currency translation gain recognised in other comprehensive income, the Group’s comprehensive income for
the quarter was US$4.7 million against US$3.6 million or 30.3% higher over the corresponding period in
2010."

Section 10 Forward statement
"Inflation and increasing labour costs will pose challenges to the Group's operations in China. Volatility in
foreign exchange, economic uncertainties in Europe and the anaemic economic recovery in the United States
are factors that will affect global economic conditions. Notwithstanding these challenges and uncertainties,
the Group remains cautiously optimistic of its performance for the remaining period in 2011.
The Group's plastic business has achieved a turnaround. The Group will channel resources and efforts to
improve its touch screen panel business by expanding its production capabilities to include capacitive-type
touch screen."

As the exchange rate of USD against SGD, has improved from 1.203 in September 2011 to 1.3 in Dec 2011. Memtech will be able to write back majority of their "losses" recorded 3.289 mil in 3Q due to unfavorable USD exchange rate against SGD. Furthermore, with the positive forward statement of the turnaround of their plastic business and their strong balance sheet, I'm hopeful that the company will dish out at least 1 cent of dividend.

The following are some of the financial data I'd from 3Q 2011 report:

Cash Per Shares(S$ '000) = $0.0717
Net Cash per shares (SGD) = $0.0551
NAV (S$) = $0.22
Market price = $0.10
Price to Book Value = $0.4457
3Q EPS (accounted for exchange rate losses) = US$0.0066

3Q EPS (recovered USD3.289 mil ) = US$0.011178736

Hence, I'm hopeful that this year result will be better than last year so dividend should be at least 1 cent.

vested.

[camelking]

Based on the 3Q2011 result announcement in section 8 (Performance Review), Q3 2011 vs. Q3 2010 Results,

"The significant increase in exchange loss was caused by the strengthening of US$ against Singapore dollars
(SG$) in 3Q11. This exchange loss was mainly unrealised and resulted from the US$ inter-company advances
from a subsidiary in Hong Kong to the Company. As a result of the unrealised exchange loss, the Group
recorded a net profit of US$7,000 against a profit of US$3.0 million in Q3 2010. Taking the effect of foreign
currency translation gain recognised in other comprehensive income, the Group’s comprehensive income for
the quarter was US$4.7 million against US$3.6 million or 30.3% higher over the corresponding period in
2010."

Section 10 Forward statement
"Inflation and increasing labour costs will pose challenges to the Group's operations in China. Volatility in
foreign exchange, economic uncertainties in Europe and the anaemic economic recovery in the United States
are factors that will affect global economic conditions. Notwithstanding these challenges and uncertainties,
the Group remains cautiously optimistic of its performance for the remaining period in 2011.
The Group's plastic business has achieved a turnaround. The Group will channel resources and efforts to
improve its touch screen panel business by expanding its production capabilities to include capacitive-type
touch screen."

As the exchange rate of USD against SGD, has improved from 1.203 in September 2011 to 1.3 in Dec 2011. Memtech will be able to write back majority of their "losses" recorded 3.289 mil in 3Q due to unfavorable USD exchange rate against SGD. Furthermore, with the positive forward statement of the turnaround of their plastic business and their strong balance sheet, I'm hopeful that the company will dish out at least 1 cent of dividend.

The following are some of the financial data I'd from 3Q 2011 report:

Cash Per Shares(S$ '000) = $0.0717
Net Cash per shares (SGD) = $0.0551
NAV (S$) = $0.22
Market price = $0.10
Price to Book Value = $0.4457
3Q EPS (accounted for exchange rate losses) = US$0.0066

3Q EPS (recovered USD3.289 mil ) = US$0.011178736

Hence, I'm hopeful that this year result will be better than last year so dividend should be at least 1 cent.

vested.

Why is the holding company preparing their account in S$ when the entire group is trading and reporting in US$ and rightly so? It causes major flunctunation on the P&L due to the volatility of USD/SGD.


Anyway, the USD/SGD was around 1.3 as at end of september, so not much impact on P&L as USD/SGD was around 1.29 at end of december.

[ngcheeki]

Anyway, the USD/SGD was around 1.3 as at end of september, so not much impact on P&L as USD/SGD was around 1.29 at end of december.

Sorry, I'd made a mistake of looking at the end of August instead of end of September. At the end of September, the exchange of USD to SGD should be 1.3.

http://www.currency-converter.org.uk/cur...D-SGD.html

Thank for pointing out the errors.

[camelking]

Anyway, the USD/SGD was around 1.3 as at end of september, so not much impact on P&L as USD/SGD was around 1.29 at end of december.

Sorry, I'd made a mistake of looking at the end of August instead of end of September. At the end of September, the exchange of USD to SGD should be 1.3.

http://www.currency-converter.org.uk/cur...D-SGD.html

Thank for pointing out the errors.

No worries.
Still it is pretty silly for the holding co to present their accounts in S$.
hahaha

[dzwm87]

Was researching briefly on memtech

Anybody who is vested and will like to share more on this company? From the looks of it, the only catalyst is its touchscreen business. Even keypad production for amazon is likely to see slow growth given amazon's venture into its amazon fire tablet.

Plus net cash situation has been there for the past 5 years. Excluding net cash, current annualized P/E is already at its historical high.

What's amazing is its FCF generating business model. Their dividend paying track score has been attractive as well. However, business wise,their margins have not been consistent. Quite a bumper.

[BlueKelah]

Hi this one with almost 100% net cash and made it to my net cash radar. Share price falling as past 2 years making loss. Latest 1Q14 finally made it to profit with increase in sales in automotive to china. Customers include VW, GM.

No debt and high net cash much like CDW. chairman is taiwanese and mix of chinese.taiwanese.SG.MY people on the board.

Anyone familiar with this counter or care to mention any red flags??

My main concern is business deterioration with the shift to touchscreen from keypads in cars and most other devices. Sunset industry this one??

[SLC81]

Memetech no longer has Touchscreen business, it has been discontinued after the factory fire (They have the insurance covered). It also stopped them from bleeding which is a good thing. Now they left with:

1) Keypad -> Revenue decreasing for mobile, diversified in to Automotive and Electronic appliances
2) Plastic Components -> Turned to profitable 2 years ao, Increasing for automotive
3) Tooling
4) Touch Screen : full discontinued/closure

Challenges:
1) Rising Labour Cost & Shortage
2) Thin profit margin
3) No future in mobile kepad
4) Attempt to diversify/new business failed to materialize

Value:

1) Lot of cash, generate decent cash inflow to pay to dividend yearly and spend on CAPEX
2) Good track record of dividend for almost 10 years (total payout = $ 0.0865 > Share price today)
3) High hope for turn around this year after touch screen business discontinued with higher dividend payout

I am vested (small ) and at 0.84 it is almost the lowest price ever you can get. I guess It should be traded to 0.14-0.15 to be end of FY (9 more months).

[heifien91]

Memetech no longer has Touchscreen business, it has been discontinued after the factory fire (They have the insurance covered). It also stopped them from bleeding which is a good thing. Now they left with:

1) Keypad -> Revenue decreasing for mobile, diversified in to Automotive and Electronic appliances
2) Plastic Components -> Turned to profitable 2 years ao, Increasing for automotive
3) Tooling
4) Touch Screen : full discontinued/closure

Challenges:
1) Rising Labour Cost & Shortage
2) Thin profit margin
3) No future in mobile kepad
4) Attempt to diversify/new business failed to materialize

Value:

1) Lot of cash, generate decent cash inflow to pay to dividend yearly and spend on CAPEX
2) Good track record of dividend for almost 10 years (total payout = $ 0.0865 > Share price today)
3) High hope for turn around this year after touch screen business discontinued with higher dividend payout

I am vested (small ) and at 0.84 it is almost the lowest price ever you can get. I guess It should be traded to 0.14-0.15 to be end of FY (9 more months).

Haha just wondering, how did you derive that it should be trading at 0.14-0.15 by end of FY?

(not vested)

[psolhawk]

Strange enough though that people are getting interested in Memtech again with no clear indication. Think people like the cash behind it?

I noted that Tesla is one of their new customers in the automotive industry and Tesla is really trying to make electric cars be adopted by more people. Not forgetting that Elon Musk, the brain behind Paypal Tesla SpaceX, has been very successful so far in all his ventures. Hopefully Memtech can benefit from Tesla's growth in the future.

[heifien91]

Strange enough though that people are getting interested in Memtech again with no clear indication. Think people like the cash behind it?

I noted that Tesla is one of their new customers in the automotive industry and Tesla is really trying to make electric cars be adopted by more people. Not forgetting that Elon Musk, the brain behind Paypal Tesla SpaceX, has been very successful so far in all his ventures. Hopefully Memtech can benefit from Tesla's growth in the future.

Well 1Q2014 results were good thats a fact. Anything else brewing, I don't know haha.