Multi-Chem (AWZ.SI) - Helping Asean stop a bunch of hackers
As the market has been more or less trading sideways, there has not been much action on my blog. However this stock has been brought to my attention recently due to their rising amount of net cash. Let's have a look at Multi-Chem, current price $0.52
[Established in 1985 as a small distributor of PCB chemicals and materials, Multi-Chem is now a leading drilling service specialist and a major distributor of specialty chemicals and materials to PCB manufacturer in the region.
In May 2002, we diversified into the business of IT distribution where we focus on best-of-breed internet security, WAN optimisation, network management and video conferencing products from industry leading vendors. Through Multi-Chem’s subsidiaries under the M.Tech umbrella, our IT business has expanded in both product range and geographical coverage since inception and now spans Singapore, Australia, China (including Hong Kong), India, Indonesia, Japan, Korea, Malaysia, Myanmar, New Zealand, Philippines, Taiwan, Thailand, United Kindom and Vietnam. We started IT training business in Singapore in late second quarter of 2004 to complement the IT distribution business. We are currently authorised to conduct training for Allot, Blue Coat, Check Point, Solarwinds, MobileIron and Nutanix courses.
Ok enough about the business, now the valuation, BlueFund Style:
Market cap : 46.85 million
NAV : $0.9827
Price : $0.52 (47% discount to NAV)
Debt : 25.407million
Net cash : 44.574 million (41.34% of MCap)
Dividend yield : 6.37% (based on 0.331 past 2 years, increased from 0.11 before. FY15 EPS was 5.3c)
Daily Volume : What volume?
Management looks like a nice bunch. Of note, the Executive director is an engineering grad from NUS who is spearheading their expansion into IT security sector in Asia and this has been their main growth engine as PCB related business has stalled. Boss has also done a buy-in at 52cents recently. Shareholdings wise boss, his wife collectively own ~68%, add in a Thai investor who owns ~12% and we have the top 3 shareholders owning close to ~80% of the company. Hence not much free float or daily volume. Trading at such a steep discount to NAV, the likelihood of a privatisation or sale of the company is very much increased.
[author is going to hold shares in this company]