You're right,If the business model ,management, accting process and business growth going forward are all right,the profit will run accordingly and so the share price.That is my investing rule all this years. Cheerio and wait for Sunningdale to shine bright.I have full confidence in Mr.Koh to steer the company to new height.
Mr. Teo was previously Regional Managing Director of Bankers Trust, and Chief Executive Officer of The Chase Manhattan Bank. In his earlier career, he had also held various senior appointments at Citibank and Citicorp Investment Bank
Its time to take a look again at this sleepy counter with the impending announcement of the FY2015 financial results.
This counter fits into the criteria of a net-net stock (depending on the degree of discount rate one tend to use).
Just a couple of days ago, it was trading at $0.80. Using a discount factor of 25% on the inventories & debtors as well as 40% on the plant/equipment & other non-current assets, one can get a per share value of $0.83 after deducting all the liabilities.
A couple of positives on this counter:
- past 5 years avg $17 million of operational cash flow per year
- current cash backing of $0.61 per share
- constant insider purchase
- switched a portion of the manufacturing capability over to Brazil (a low cost country)
- cheaper raw materials due to lower oil px
- dividend payout do tend to increase slightly over the years
- first nearly full year of revenue & earnings contribution from first engineering after buying and merging the operations in last quarter of Y2014
- financial results in first 9M already exceeded the full Y2014 results
On the flip side:
- revenue/earnings may drop if this global slowdown continue, which results in a drop of new orders from customers from IT and consumer product sector.
- Revenue jumps 41.8% to S$674.5 million for FY2015
- profit of 42 million (will be 29 million if exclude currency gain)
- positive operating cash flow of S$67.1 million
- final dividend of 5 cents (increase of 25% YoY)
A fly under radar well managed manufacturing company will good amount revenue and profits generated from its assets over the years. I find it ridiculous that the current px only takes into account the cash and current assets.
Seems like Mr Market do not think that its hard assets are not worth anything meaningful.
What a pity!
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