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ISDN Holdings
28-07-2020, 10:16 PM.
Post: #31
RE: ISDN Holdings
Positive Profit Guidance:
ISDN is expected to record an increase in net profit of more than 50% for 1H2020 compared to 1H2019.

The increase is driven by:
• Strong growth in ISDN’s core business order book;
• Growth in construction revenue from ISDN’s energy business as it makes further commercial progress on its mini-hydropower plants; and
• Gains from a reduction of operating expenses as the Group undertook cost efficiency initiatives in 1H2020.

https://links.sgx.com/FileOpen/ISDN-Ann-...eID=625401

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29-07-2020, 08:29 AM. (This post was last modified: 29-07-2020, 03:08 PM by Squirrel.)
Post: #32
RE: ISDN Holdings
This is very good results indeed. Just to add on my 2 cents worth...

This results is in line with the theme of increasing industrial automation in China. Year on year, in Jun 2020, there has been an increase of 29.2% in production in industrial robots in China.

近日国家统计局发布了2020年6月工业机器人统计数据。数据显示,6月份,全国规模以上工业企业的工业机器人产量20761套,同比增长29.2%,较5月的16.9%大幅回升12.3%;1-6月全国规模以上工业企业的工业机器人产量为93794套,累计增长10.3%,较1-5月的6.7%回升3.6%

http://article.cechina.cn/20/0722/07/20200722074058.htm

Of course, ISDN is not the top player in China. However a rising tide raises all boats. What's attractive for ISDN is how undervalued it is compared to others that are involved with industrial automation. According to the report that it will record an increase in net profit of more than 50%, profit attributable to equity holders of the Company would likely be about $8.4m thereabouts. That's 6.26x PE on an annualized basis (notwithstanding seasonality).

Leading companies like

Fanuc       61x PE
Yaskawa    68x PE
Schneider   22x PE
ABB           50x PE
Rockwell     28x PE

are trading at much higher multiples. This just leaves ISDN with a lot of room for growth.

This is probably what I would view as a major shift in business trends towards Industrial Automation that Covid has brought about. Much like how Covid has benefited Ecommerce, Technologies for remote working and medical supplies, I expect this company to be re-rated and experience a drive in how its valued. If you are a business owner in China, you would be thinking of all ways possible to reduce reliance on humans, won't you?

Some other articles providing some background in the drive in IA in China.

https://www.bloomberg.com/graphics/2019-...utomation/
https://www.cnbc.com/2020/07/11/5g-spurs...onomy.html
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Please do your own due diligence. Any reliance on my posts is at your own risk.

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