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Technovator International Ltd offers engineering products and services in the energy saving industry. It is headquartered in Singapore, but listed in Hong Kong: 02016.HK and mostly active in China.
Their valuation seems ridiculously low, so I decided to skim their annual reports and prospectus this morning. I did not manage to grasp what's really going on. Let me note here that I don't master the Chinese language.
I will not invest due to lack of confidence, but I am leaving my notes here in case anybody else wants to give it a shot....
+/+ Pros +/+
Low valuation. P/E = 2.5 , P/B = 0.25
Market cap is roughly equal to the cash balance.
Good financial performance. ROE and Net Margin typically above 10%, although declining recently. Revenue and earnings growth. No net debt.
Is active in growing sector of energy saving solutions. Developed propriety products and software, though not clear if the technology constitutes a moat.
Reputable origins. Parent company Tsinghua Tongfang Co. Ltd. is a high-tech listed (Shanghai 600100) company founded by Tsinghua University.
Clear, complete, and consistent financial reporting. Besides the relationship with Tsinghua Tongfang there are no Related Party Transactions. No signs of tunneling out assets. Auditor KPMG Hong Kong. The whole picture does not feel like a typical S-chip.
-/- Cons -/-
Reporting negative Free Cash Flow in most years. Company has issued new shares to re-finance.
No dividends so far. But some share buy back exercises.
Intertwined with parent company Tsinghua Tongfang. The share price performance of this conglomerate and their listed subsidiaries are all poor recently. Have they lost their way somehow?
Company headquartered in Singapore, listed in Hong Kong with operations mostly in PRC. Scattered construction seems inefficient.
Tsinghua Tongfang seems to have listed Technovator as a spin-off of their energy-saving activities in order to access capital markets outside of mainland China. Thus enable investments in new products and activities. Considering Technovator's share price development, this goal seems to have failed. Tsinghua Tongfang could potentially decide to de-list Technovator with a low-ball offer.
Almost no shareholdings by management and directors.
Participates in Chinese government tenders for engineering projects. Concentration risk, although these are different government entities. Success might hinge on personal connections.
Not clear why the share price tanked to a ridiculous level. No third party analysis available (at least in English).
Their valuation seems ridiculously low, so I decided to skim their annual reports and prospectus this morning. I did not manage to grasp what's really going on. Let me note here that I don't master the Chinese language.
I will not invest due to lack of confidence, but I am leaving my notes here in case anybody else wants to give it a shot....
+/+ Pros +/+
Low valuation. P/E = 2.5 , P/B = 0.25
Market cap is roughly equal to the cash balance.
Good financial performance. ROE and Net Margin typically above 10%, although declining recently. Revenue and earnings growth. No net debt.
Is active in growing sector of energy saving solutions. Developed propriety products and software, though not clear if the technology constitutes a moat.
Reputable origins. Parent company Tsinghua Tongfang Co. Ltd. is a high-tech listed (Shanghai 600100) company founded by Tsinghua University.
Clear, complete, and consistent financial reporting. Besides the relationship with Tsinghua Tongfang there are no Related Party Transactions. No signs of tunneling out assets. Auditor KPMG Hong Kong. The whole picture does not feel like a typical S-chip.
-/- Cons -/-
Reporting negative Free Cash Flow in most years. Company has issued new shares to re-finance.
No dividends so far. But some share buy back exercises.
Intertwined with parent company Tsinghua Tongfang. The share price performance of this conglomerate and their listed subsidiaries are all poor recently. Have they lost their way somehow?
Company headquartered in Singapore, listed in Hong Kong with operations mostly in PRC. Scattered construction seems inefficient.
Tsinghua Tongfang seems to have listed Technovator as a spin-off of their energy-saving activities in order to access capital markets outside of mainland China. Thus enable investments in new products and activities. Considering Technovator's share price development, this goal seems to have failed. Tsinghua Tongfang could potentially decide to de-list Technovator with a low-ball offer.
Almost no shareholdings by management and directors.
Participates in Chinese government tenders for engineering projects. Concentration risk, although these are different government entities. Success might hinge on personal connections.
Not clear why the share price tanked to a ridiculous level. No third party analysis available (at least in English).