Powermatic Data Systems

[desmondxyz]

At last Friday's closing price of $2.00, the market capitalization of Powermatic Data stand at $69.8m. 

With (1) cash and financial assets ($26.2m+$10.2m = $36.4m) and (2) property at market price ($33.5m), total sum of (1)+(2) = $69.9m. 

It turns out that you are still getting the WIFI business for free!!

What are the prospects of their WIFI business?

1. Since 2014, Powermatic has strengthen its wireless business as Qualcomm ADC for China and SE Asia. Dr Chen Mun said this in Annual Report 2014 statement:


"The popularity of smartphones is one of the main drivers of wireless connectivity. The use of wireless, in particular WiFi, will become a lot more pervasive. One needs it at work, at public places and at every corner of his home. It is our goal to meet the increasing needs in connectivity over large areas and over long distances. In the near future, WiFi enabled “Internet of Things” will revolutionize home appliances. You will be commanding your refrigerators, air-con, mediaplayer, lights and even the door lock, all connected to Internet through WiFi. We will participate in this revolution and we will make sure that whatever obscure corners the “Things” are placed, they will be reached by our wireless."

2. Will Qualcomm continue to be the leader as the world transitions to 5G? Investors need to pay attention to how Qualcomm is expanding in China, see link below.

https://www.forbes.com/sites/patrickmoor...8b4be257e3

I still like my FREE WIFI !! 

(Not a recommendation to buy or sell, just stating facts)

How much does the wifi business worth in your opinion?

[BlueKelah]

If global economy remains stable, Powermatics likely to make around 5+m this year translating to about 14c+ EPS. Using 60% payout, we can expect 8.2c or ~8c (5c +3c bonus) this year. @$2 share price thats around 4%yield, which is rather reasonable.

And if you use PE of 15. 15*5m=75m

So based on earnings the whole company worth around 75m +- 10%. (I'd say current prices is around fair value.)

IMHO its hard to quantify any tech business as you never know if any new product or tech could be suddenly worth a lot, just like biotech companies. This is evident as in the case of AEM, when suddenly they start raking in the $$ when the research with intel paid off. Who knows if Powermatic is working on something big with QUALCOMM?

This report on AGM in 2016 by Nextinsight also sheds some light on what Dr. Chen boss may be up to in secret.  He has also mentioned he wants to hand the mgmt. of the company to the CEO and he himself go back to doing more research....
https://www.nextinsight.net/story-archiv...ta-systems
[Powermatic's management spoke about the company's involvement, and potential investments, in projects such as those that involve "a major search engine" and a global car rental company, without revealing names.(So hinting its UBER and GOOGLE?) ]

-V-

[desmondxyz]

If global economy remains stable, Powermatics likely to make around 5+m this year translating to about 14c+ EPS. Using 60% payout, we can expect 8.2c or ~8c (5c +3c bonus) this year. @$2 share price thats around 4%yield, which is rather reasonable.

And if you use PE of 15. 15*5m=75m

So based on earnings the whole company worth around 75m +- 10%. (I'd say current prices is around fair value.)

IMHO its hard to quantify any tech business as you never know if any new product or tech could be suddenly worth a lot, just like biotech companies. This is evident as in the case of AEM, when suddenly they start raking in the $$ when the research with intel paid off. Who knows if Powermatic is working on something big with QUALCOMM?

This report on AGM in 2016 by Nextinsight also sheds some light on what Dr. Chen boss may be up to in secret.  He has also mentioned he wants to hand the mgmt. of the company to the CEO and he himself go back to doing more research....
https://www.nextinsight.net/story-archiv...ta-systems
[Powermatic's management spoke about the company's involvement, and potential investments, in projects such as those that involve "a major search engine" and a global car rental company, without revealing names.(So hinting its UBER and GOOGLE?) ]

-V-

At the age of 70, Dr.Chen still thinking of doing more research instead of retirement, I salute this old man....

[MOV]

Let's review Powermatic's wireless growth, it's beautiful:

Revenue
Yr 2013 - $9.31m
Yr 2014 - $12.84m
Yr 2015 - $13.40m
Yr 2016 - $14.79m
Yr 2017 - $15.24m (CAGR: 13.11%)
HY2018 - $7.88m

Gross Profit & Margin
Yr 2013 - $2.86m (30.7%)
Yr 2014 - $4.21m (32.8%)
Yr 2015 - $4.32m (32.2%)
Yr 2016 - $6.13m (41.4%)
Yr 2017 - $6.87m (45.1%) (CAGR: 24.5%)
HY2018 - $4.04m (51.4%)

If you still don't see it, look at Powermatic's partner mentioned in CIMB report and understand what is coming. (https://www.qorvo.com/innovation/5g)

Is P/E of 10 times or 15 times the price I would sell for PM Data's wireless business given such beautiful numbers and enormous growth potential? 

No wonder Dr Chen is still so excited to do his research everyday!!



(Not a recommendation to buy or sell, just stating facts)

[cyclone]

Financial Results for the Financial Year Ended 31 March 2018 ("FY2018")

Highlights :
1. The Group achieved a 5% growth in revenue year-on-year to 16.136 million, fuelled by the strong demand from all sectors to have greater connectivity
2. Gross profit rose 18% from S$ 6.888 million in FY2017 to S$ 8.133 million in FY2018
3. Profit before taxation improved 13% year-on-year, from $$4.679 million to S$5.305 million due primarily to increase in sales and improvement in gross profit margin
4. Earning per share was 12.94 cent
5. Cash and bank balances was 27.346 million as at 31 March 2018
6. Net asset value per share was S$1.57 as at 31 March 2018
7. Proposed first and final dividend of 5 cents per share plus special dividend of 2 cents per share

More details in http://infopub.sgx.com/FileOpen/PDS_SGX%...eID=507236

Powermatic Data Systems today closed at S$1.620 (-0.020)

[BlueKelah]

Thank you Cyclone for the constant updates.
And thank you fellows valuebuddies 
and especially thank you BlueKelah for the excellent writeup on BCY.

Excellent pick and unfortunately, I sold too fast too.

From my trading record.
I vested in early 2016 around S$0.875, sold in early 2018 about S$1.47.

I sold for 3 reasons:
1. Not able to understand what had fundamentally change that the stock price surged 
2. Saw a few good opportunities and need to get ready $$$ when the time is ripped.

Thank you, BlueKelah once again.
I am convinced that investment is seriously fun especially after reading all your OUTSTANDING posts.

No problem, glad u made money on this counter as well.  Like spindex, it's been a slow but steady journey. 

As I like to say, earn money feel free to clap for me, lose money hor dun spit on me. Lol... 

I am quite surprised this Co. Business has been holding up well and growing too. 

In any case it's always good to take some profit / capital back when stock is fairly valued and recycle into other undervalue stocks. 

Let's wait for the market to correct crash! 

[MOV]

Is PM Data a 'low assets' company? 

With FY2018 equity of $54.8m and stripping off cash, bonds, stocks, property ($52.8m), it only takes $2.57m remaining assets to generate profit of $4.2m for its wireless business.

Meanwhile cash is still piling up to all time high of $27.3m even after increasing dividend payout to 7cts for past 2 years. Clearly our CEO is not giving out cash fast enough.

Is PM Data a 'high growth' company? 

"The Group is bullish that the wireless connectivity market will experience accelerated growth in the year to come as consumers and businesses continue to show insatiable demand for speedy information access. This, coupled with the emerging 5G technology, is expected to fuel demand for high quality, reliable wireless connectivity devices." (Commentary from FY2018 results announcement)

At current price of $1.68 and NAV of $1.57, should long term shareholders hold on very tightly and get paid while doing so? 

Revenue
Yr 2013 - $9.31m
Yr 2014 - $12.84m
Yr 2015 - $13.40m
Yr 2016 - $14.79m
Yr 2017 - $15.24m 
Yr 2018 - $15.99m (CAGR: 11.41%)

Gross Profit & Margin
Yr 2013 - $2.86m (30.7%)
Yr 2014 - $4.21m (32.8%)
Yr 2015 - $4.32m (32.2%)
Yr 2016 - $6.13m (41.4%)
Yr 2017 - $6.87m (45.1%) 
Yr 2018 - $8.10m (50.6%) (CAGR: 23.13%)

[MOV]

The eagerly awaited PM Data Annual Report 2018 just released today!

http://infopub.sgx.com/FileOpen/Powermat...eID=515712

Highlighted some points below:

1. Ability to manage costs. 

"The shortage of capacitors, resistors and other component parts, disrupted the wireless device manufacturing industry not only in costs but also in the way of production planning, inventory buffering and product delivery timelines...Our versatile business models and the high value add business has given us added advantage over our competitors."

2. New Patents in China

"Our years of research and development efforts had come into fruition. The two patents on 4x4 wave 2 wireless module we filed in FY2018 in China were approved in April 2018, giving us a good platform to market our proprietary products."

3. Improving industrial rents

"Based on research by Colliers International, industrial property rents show sign of bottoming out, rents are expected to stabilise with stronger leasing demand in FY 2019."

Current revalued NAV stands at $1.98 with potential for upside of their industrial property this year with improving rents. 

Looking forward to sweet 7cts dividends,     . Admire Prof Chen for his energy and passion at 70 years old this year!

[BlueKelah]

Good results consistent with a good year for the sector.

Sounds like they are making good headway into the China as well.

Qualcomm atheros based network products should see them remain profitable for years to come.

[cyclone]

Financial Results for the Financial Year Ended 31 March 2019 ("FY2019")

Highlights :
1. The Group generated a total revenue of S$ 20.954 million for FY2019, representing a 30 % growth year-on-year
2. Apart from repeated business from existing contacts, the Group was able to secure orders from new customers
3. Main stream of revenue was from the sale of WIFI modules, embedded boards and other wireless connectivity products
4. The Group also provides technical support for Qualcomm Atheros reference design and other sales related services
5. The Group's key markets for FY2019 were USA 33%, Asia 31% , Europe 22% and other regions 14%
6. Gross profit increased from S$ 8.132 million in FY2018 to S$ 9.800 million in FY2019
7. The drop in rental, coupled with increase in maintenance expense, had caused a 10% decline in property profit
8. Profit before tax grew 46% year-on-year to S$7,728 million
9. The board declares 5.0 cents first and final dividend + 3.0 cents special dividend per ordinary share.

More details in https://links.sgx.com/FileOpen/FY2019%20...eID=561038