Valuetronics Holdings

[GFG]

I had been observing.........but so decided to contribute with

http://www.nextinsight.net/index.php/sto...-overblown

Great. Thanks for the contribution

[CityFarmer]

Received the following PM from someone called LLS.

" i read the past posts about u keep talking up valuetronics when people make negative comments u defend so stubbornly

fools and their money often parts ways

good luck hugging to your valuetronics shares"

Wonder why he is telling me that he is parting ways with his money....

Will you please forward the PM to me? I will decide on the necessary action, upon discussion.

Regards
Moderator CF

[CLeong]

I had been observing.........but so decided to contribute with

http://www.nextinsight.net/index.php/sto...-overblown

The Bulls vs The Bears

however mr market is the best judge

as Valuetronics closed lower today

I personally think it could go much lower, as its still considered an S-Chip, with its manufacturing plants mostly in China. Investors should be careful of such S-Chips.

[NTL]

I dunno...

Guess next time I just say "Short!", "Sell!", "Gone Case!".

Could Felix Leong be back on the forum?

Speculation
GG

Received the following PM from someone called LLS.

" i read the past posts about u keep talking up valuetronics when people make negative comments u defend so stubbornly

fools and their money often parts ways

good luck hugging to your valuetronics shares"

Wonder why he is telling me that he is parting ways with his money....

[GFG]

I dunno...

Guess next time I just say "Short!", "Sell!", "Gone Case!".

Could Felix Leong be back on the forum?

Speculation
GG

Received the following PM from someone called LLS.

" i read the past posts about u keep talking up valuetronics when people make negative comments u defend so stubbornly

fools and their money often parts ways

good luck hugging to your valuetronics shares"

Wonder why he is telling me that he is parting ways with his money....

Hey guys
Let's all take it down a notch.
I thought the earlier discussions were useful, everyone can give their opinions, and esp if it's backed by data like how NTL presented, I think it's very good.
Agree or disagree it's still ok. Nobody can expect everyone to have the same opinions, if so then this forum is useless!
Having said that, the PM didn't say anything offensive either. No abuse or vulgarities, just a personal opinion. We can all agree there will be disagreements. I love disagreements on the companies I have analysed cos it gives me more material to consider
And there isn't any 1 opinion that is set in stone either. For eg. I may have sold out valuetronics, but if the price comes down further, I may suddenly become a SH again
It's all about price vs value and obviously there's no single figure. It's a range and this varies between individuals right

Now, I m still looking forward to a comparison between Valuetronics and CDW holdings....

[GFG]

I had been observing.........but so decided to contribute with

http://www.nextinsight.net/index.php/sto...-overblown

The Bulls vs The Bears

however mr market is the best judge

as Valuetronics closed lower today

I personally think it could go much lower, as its still considered an S-Chip, with its manufacturing plants mostly in China. Investors should be careful of such S-Chips.

Since u mentioned about S chips... let me share my personal experience with S chip
Some yrs back (2?) I owned a sizable stake in Sinopipe
The reason is the usual reason why ppl own S chips: valuation
I rem selling out for a tiny profit at around $0.23
At the exact time when I sold out, an analyst turned corporate raider took a large stake in sinopipe. His name is Pu Weidong
I rem reading a full page article in The Edge about him, thinking well, one of us is wrong. At that time I went back to re analyse and figured he should be right
Afterall, he's a full time analyst, There was a lot of hype about china water problems, the old rusting pipes need to be changed to these plastic ones etc
The valuations then were dirt cheap. Something like 0.6 times book, PER <5. I wasn't knowledgable enough to consider FCF and DCF etc then, but I rem there was net cash annually. Very compelling valuations.
2 yrs on, it seems like I am right in that one instance though as sino is now suspended. Or delisted? Not sure
It's more luck than skill as I rem thinking clearly I must have missed out and sold too early.
My point is: quantitative valuation is not adequate. You really need some qualitative analysis of the company and the industry. Either that or u need plain luck.

[specuvestor]

^^ as we age we actually realise qualitative is more important! but that takes years of experience. Quantitative is like a new pianist learning the ropes: there are rules and techniques to follow. But a mature pianist adds color and emotion to the piece that makes it great

Mr market is a voting machine in the short run but a weighing machine in the long run. Depends what one means Mr market is best judge/ always right. If market is perfect VB can close shop already

Remember not to feed the trolls. Those with substance after a while one observant enough will know. The other aspect is whether got character. Similar to what Buffett says about intelligence, integrity (and energy).

In a forum like this intelligence and energy is clearly visible. Trolls lack the former and will be pity to have intelligent postings from NTL or GFG being affected.

[CityFarmer]

I have removed a post with name mentioned. Let's don't focus on person, but the company.

Thanks

Regards
Moderator CF

[NTL]

Now, I m still looking forward to a comparison between Valuetronics and CDW holdings....

A quick look at the 2 companies from my short investigation (sorry... still very quantitative....) :

CDW Holdings:

For FY13:

The company posted a net profit of US$11.33M. Out of which, there were 2 exceptional items which adds up to US$6.2M. If I am to subtract the 2 items from the profit, the profit will be US$5.13M, or US 1.09c/share (SG 1.38c/share)

The company was holding US$51M of Cash. It was also having a total bank loan of US$6.5M. Just wondering, why is a cash rich company still need to take a bank loan of US$6.5M? The net cash works out to be US 9.39c/share (SG 11.9c/share)

The company NAV is US 14.54c/share (SG 18.46c/share)

The company pay out a total of US 1.2c/share (SG 1.52c/share) of dividend

For 6Mths FY14:

The company post a net profit of US$3.188M. Out of which US$1.28M is an exceptional item. Subtracting that will give a profit of US$1.9M, or US 0.4c/share (SG 0.5c/share) for the first 6mths.

The company cash holding increase to US$60.2M. They also increase their bank loans by another US$4M to US10.5M. Still wondering why they taking on more loans. Anyway, the net cash work out to be US 10c/share (SG 12.7c/share)

The company NAV remains at US 14.54c/share (SG 18.46c/share)

The company declared a dividend of US0.5c/share for the 6mths.

Valuetronics:

For FY13:

The company post a net profit of HK147.9M. HK12.8M is from exchange gain, giving an operating profit of HK135.1M, or HK 37.1c/share (SG 5.93c/share)

The company is holding HK 477.9M cash, and zero bank loan. This works out to be HK 129.6c/share (SG 20.7c/share)

NAV of company is HK 197.2c (SG 31.55c/share)

The company declared a dividend of HK 20c/share (SG 3.2c/share) for the year.

1QFY14:

For the quarter, the company post a net profit of HK 33.8M, with an exchange gain of HK 1.7M. Net it off give a profit of 32.1M, or HK 8.7c/share (SG 1.4c/share)

The company holds HK 440.1M cash, and zero bank loan. This translate to HK 119.3c/share (SG 19.08c/share)

NAV of company increase to HK 205.4c/share (SG 32.86c/share)

_______________________

Prospects of the companies:

CDW Holdings:

The company has experience a cutting down of order from a major customer. However they are able to secure orders for newer models. They are also expecting higher orders from handsets. While the new order is expected to be of higher pricing, the margin is expected to be lower.

Valuetronics:

The company is facing decreasing margin for their consumer products, especially so with the LED Lighting. Furthermore, there are news that Philips will be spinning off the Lighting division, and (speculative) this may lead to Valuetronics losing the entire business. The entire spinning off process is expected to take around 18months.

The company had been actively looking for new customers to diversify its base, especially so in the Industrial product range which has better margin. So far, they had been pretty successful. (Revenue increase by 36% for this division compare with last yr same quarter).

__________________

Looking at the 2 companies, and IF I can only invest in one of it, likely I will choose Valuetronics (coz I understand it better!). While CDW looks better in evaluation (below book value, higher dividend %, good cash holding), their recent performance were mainly elevated with exceptional incomes. Furthermore, I still don't understand why they are taking loans when they have close to $50M of cash.

For long term prospect, I think Valuetronics, which look at higher margin products, will have a better future than CDW, which will experience further margin reduction from their new products.

Do add some inputs so that I can understand CDW better.

Thanks.

[NTL]

I had been observing.........but so decided to contribute with

http://www.nextinsight.net/index.php/sto...-overblown

The Bulls vs The Bears

however mr market is the best judge

as Valuetronics closed lower today

I personally think it could go much lower, as its still considered an S-Chip, with its manufacturing plants mostly in China. Investors should be careful of such S-Chips.

Based in that definition, will it put CapitaRetail China as a S-Chip too?

To me, a S-Chip is one which is owned by Chinese, operate by Chinese, and have most of the operations (production, sales,etc) in China.