Thoughts on the market.

Valuetronics has been holding up well over the past 3 weeks and today it hit a high of 0.31 cents.

It is noteworthy to mention that for 9 months ended 31Dec, the company has recorded free cash flow of about 8.8 cents. If business continues to do well for 4Q, I expect Valuetronics to declare a record dividend payment for shareholders. Based on the latest management outlook, I remain confident that 4Q will be strong.

Excelpoint annual report has just been released. Below is a letter to shareholders taken from the report.

A LETTER TO SHAREHOLDERS
Dear Shareholders,


It is my pleasure to inform you that Excelpoint Technology Ltd (Excelpoint" or the Group ) has completed another successful year. Compared to the previous financial year, revenue was up by 11.5%, increasing from US$584.8 million to US$651.9 million.
In line with this year's performance, net profit after tax was also higher, rising from US$5.0 million to US$6.2 million, representing an increase of 23.4%.


To share the good results and reward our shareholders, the Board recommends a first and final dividend of 0.5 Singapore cent per share plus a special dividend of
0.3 Singapore cent per share. The special dividend is to reward our shareholders in recognition of your support to Excelpoint.


The Year in Retrospect


The prevailing strong consumer confidence in China and the surrounding Asian countries augurs well for our business.
China and Hong Kong remained the larger revenue contributor for our Group, accounting for about 74.2% of our aggregate revenue. The balance 25.8% of our revenue was generated by sales to customers from South East Asia, India and other markets.
The first quarter of FY2013 started on a high note. The strong demand that we saw in the quarter continued into the following quarter. Operating amid concerns and uncertainties arising from the credit tightening in China, we maintained our business momentum. In the third quarter, uncertainties surrounding the recovery of the US economy re-surfaced and economic sentiments once again turned bearish. Fortunately for us, the strong consumer demand from both the China and South East Asian markets mitigated the negative impact. With the hard work and dedication of the team, we saw further growth in our revenue in the fi nal quarter of the fi nancial year 2013 (&ldquo FY2013&rdquo ) and we closed the quarter with
profit after tax of US$2.1 million, which is 20.2% higher than the US$1.8 million reported in the previous fi nancial year.


North East Asia


North East Asia, which comprises mainly businesses generated from China and Hong Kong, is a key region for Excelpoint&rsquo s growth. Supported by an extensive network of offi ces, well-established relationships with customers from across a wide spectrum of industries and our familiarity with this region, we expect growing contributions from this region. In FY2013, our
North East Asian team delivered revenue of US$398.7 million, which is 17.3% higher than the revenue of US$339.9 million reported in the previous fi nancial year.


The opportunities in China are tremendous. Like many developing economies, environmental issues, power consumption and rising affluence have created demands for technologically-advanced solutions, especially in the communication and energy-saving space. As an established distributor in handsets and power-related products, we are continually seeking new product lines that can bring added value to our customers. This year, new product lines aimed at supporting the needs of our customers from the smart phone industry were added to our product portfolio in North East Asia.

ASEAN

Categorised under ASEAN are India, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.
In FY2013, revenue contribution from ASEAN amounted to approximately US$253.2 million, representing an increase of 3.4% over the revenue of US$244.9 million reported in FY2012.


Compared to North East Asia, ASEAN is a relatively smaller revenue contributor. On the other hand, being a fast growing region, this area holds abundant potentials for our business especially in the e-Government and infrastructure sectors.
In the short term, while many countries in ASEAN are preparing themselves for their forthcoming elections, business activities are not expected to pick up speed. Nonetheless, the countries in this region, well aware of the necessity and the importance of strong infrastructure systems to attract foreign investments and spur their economic growth, remained committed to their national development goals. These initiatives will release many opportunities for us and the current landscape presents an optimal time for us to develop our strategies and ready ourselves to further expand our reach into these markets.


The Prospects Ahead


Since the 2010 fi nancial year, Excelpoint has delivered four consecutive years of profi t and we are not stopping here.
The improved global economic landscape, led by the recovery of the US economy, the stablisation of the economic conditions in Europe and China&rsquo s drive to maintain its economic growth, is encouraging. Despite recent government measures in China, we are still optimistic about our prospects in the region. Barring unforeseen circumstances, we expect our business momentum to continue in the new financial year.


In Appreciation

I would like to thank all our shareholders, customers, bankers and business associates for the trust that they placed in us over the years. To my colleagues at the Board, thank you for your advice and guidance. To our employees, thank you for your dedication and commitment in making Excelpoint a success today.
The new fi nancial year will bring new challenges to all of us and I am sure that with the support from all of you, we will do our best to deliver another set of good results to our shareholders.
Yours sincerely,
Albert Phuay Yong Hen
Chairman and Group CEO

(Vested)