Valuetronics - "Thoughts on the market".

Valuetronics is one of the 5 companies I mentioned in my
post on "Thoughts on the market.

Reasons for picking Valuetronics are :

1. Consistent high dividend .

The dividend paid outs are as follow :

Year 2013 : HK 8.0 cts per share

Year 2012 : HK 16.0 per share + special div of HK 1.0

cts. Total HK 17 cts.

Year 2011 HK 14.0 cts per share.


2. High payout ratio.

Year 2013 : 36.5 %
Year 2012 : 46.6 %
Year 2011 : 40.9


3. Expect high dividend payout of 2.23 singapore cts per share this financial year.

Half year profit .. HK 72,901,000. Assuming the same level of profit is maintained the full year profit would be HK 145,802,000. Assuming a payout ratio of 35% (low estimate) the total payout would be HK 51,030,000. The payout per share would then be total payout amount divided by the number of shares.
HK 51,030,000 divided 365,188,750 shares = HK 13.97 cts.
In S$ terms n based on exchange rate of 1$HK to S$0.1629,
the dividend per share in Singapore currency would be 2.23 cts.


4. there are other reasons why I pick Valuetronics. Will
elaborate if time allowed.

Note : above info are meant for sharing. Figures maybe wrong and expected dividend may not happen. Trade cautiously.

Joseph - thanks for highlighting Valuetronics (one of my core holdings).

Valuetronics is clearly a great value stock notwithstanding the run-up in prices. Even at today's closing of 0.265, we may still have a dividend yield of about 10% going forward. If assuming 2H results mirror to that of 1H, the estimated PE will be about 3.9 and if we adjust the cash holdings in hand the PE will drop to < 2.0.

In addition, as at end sep13, cash holdings/dividend paid ratio (dividend paid in last FY) was at a healthy 9.8 times. Balance sheet remains strong.

Stock has moved smartly this week, and perhaps the market is getting winds of this fundamentally under-valued counter and for which current pricing, in my view, is just not justifiable.

To those who are not vested, you may wish to check out this stock.

companies spin off companies, here we got topics spinoff from topics...

Valuetronics .. volume has improved. Total 2,215 lots traded. Closed at 26.5 cts.

Other reasons for my pick on Valuetronics.



1. Decent profits for the past 3 years.

2011 - 19.7 mil

2012 - 21.2 mil

2013 - 12.8 mil / 19.3 mil
(19.3 mil from continuing business)



2. Good profit trend in last 2 quarters,


Apr to June - HK $33274 in S$5,420 (x1000)


July to Sept - HK $39627 in S$6,455 (x1000)


1st 6 months or half year results -
HK $72901 in S$11,875 (x1000)

You may note that the first half year or 6 months profit is almost equal to the whole of last year profit.

Hence, this year full year profit is likely to show a great improvement over last year.,



3 Company has no debt.



4. Company has cash of HK $288732 or S$63.3 mil.



5. Company has only 365,188,750 number of shares.

This is a small number relative to most company.

......................... end ...............................

Trading between 26.5 to 27 cts lately. Strong support seen at 26.5 cts. To recap, below are the reasons why I like Valuetronics :


Reasons for picking Valuetronics are :

1. Consistently high dividend .

Year 2013 : HK 8.0 cts per share

Year 2012 : HK 16.0 per share + special div of HK 1.0 cts. Total HK 17 cts.

Year 2011 HK 14.0 cts per share.

2. High payout ratio.

Year 2013 : 36.5 %
Year 2012 : 46.6 %
Year 2011 : 40.9 %

3. Expect high dividend payout of 2.23 singapore cts per share this financial year.

Half year profit: HK 72,901,000. Assuming the same level of profit is maintained, the full year profit would be HK 145,802,000.

Assuming a payout ratio of 35% (low estimate) the total payout would be HK 51,030,000. The payout per share would then be total payout amount divided by the number of shares.

HK 51,030,000 divided 365,188,750 shares = HK 13.97 cts.

In S$ terms n based on exchange rate of 1$HK to S$0.1629, the dividend per share in Singapore currency would be 2.23 cts.

4. Decent profits for the past 3 years.

2011 - 19.7 mil
2012 - 21.2 mil
2013 - 12.8 mil / 19.3 mil (19.3 mil from continuing business)

5. Good profit trend in last 2 quarters:

Apr to June - HK $33274 in S$5,420 (x1000)
July to Sept - HK $39627 in S$6,455 (x1000)
1st 6 months or half year results - HK $72901 in S$11,875 (x1000)

Note that the first half year profit is almost equal to the whole of last year profit. Hence, this year full year profit is likely to show a great improvement over last year.

6. Company has no debt.

7. Company has cash of HK $288732 or S$63.3 mil.

8. Company has only 365,188,750 number of shares. This is a small number compared to most companies.