Up 10% yesterday. It is a move in the right direction. The 2009 results announcment should provide the catalyst for the stock to catch up with the market.
In today\'s article, I see a comparison made between Biosensors & Techcomp\'s PE multiples. Not apple to apple comparison.
www.nextinsight.net/content/view/1971/60/
Biosensors has lots of R&D and patented knowledge - Techcomp is a contract manufacturer with a very low-cost set of overheads in China. Techcomp is also a distributor of Hitachi scientific equipment, so the margins will be relatively low. All said, Techcomp should be worth a lot more than current \'lelong\' price of 40 c. A lot depends on upcoming full year results. It\'s going to result in either a sharp rally or it\'s confirmation that the stock is a so-so stock not worth more than 40 c (current price).
Do take note that the manufacturing gross margin is around 20-30%. The overall margin is dragged down by the distribution margin of around 5-7%. Hence, with the manufacturing division contributing a bigger portion of the sales, the overall margin is expected to improve. While I have little doubts about Biosensor R&D and patents, it waits to see whether these can translate into profitability. Note that Biosensor track record as a profitable entity is patchy. This is still very much a concept stock. Techcomp on the other hand, has been profitable since listing and it is likely to have a good profit in 2009, while 90% of the manufacturing businesses are suffering. The NTA of the Company at 30 June 2009 is 38 Singapore cents. I expect the NTA of the Company to be around 40-43 cents by 31 December 2009. The current share price is only their NTA. Of course, the downside is the poor liquidity and relatively small side. This is not a recommendation to buy or sell. Merely a personal opinion.
Biosensors this morning: Results announcent looks pretty encouraging. Is the news in the stock prie already?? :blink: :side: In 3Q FY10, the Group reported a net profit of US$12.4 million or 1.17 US cents earnings per basic share and 1.13 US cents earnings per diluted share, compared to a net loss of US$0.3 million or 0.02 US cents loss per basic and diluted share in 3Q FY09. For the FY10 nine-month period, the Group reported a net profit of US$23.0 million, or 2.17 US cents earnings per basic and 2.13 US cents earnings per diluted share compared to a net loss of US$1.5 million or 0.14 US cent loss per basic and diluted share in FY09 nine-month period.
Harlequin, Annualised Biosensor\'s EPS gives me 2.84 US cents, meaning almost 4 SG cents. At 79 cents, the PE is 20x. How much can it grow in 2010? 50% or better ? It is anybody\'s guess. Granted that it should trade at a premium due to its patents and market capitalisation. But the margin safety is just too low for me to consider.
Note the unusually high vol of Techcomp shares done so far this morning: 247,000 : and all above 40 c! I consider this a very interesting positive signal. :laugh:
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