Sunday, October 16, 2016

Multi-Chem Limited - Helping Asean stop a bunch of hackers.

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.

Business wise, it seems the company is still running its original PCB related business. However that is now only contributing less than 10% of its total revenue in recent years. In AR2015, revenue from PCB segment was 25.621m vs. IT segment of 321.436m. Given this we can see that Multichem has evolved into an IT company, more specifically one that is in the IT security distribution business. How solid is the distribution business? I don't know. How secure is this business? I don't know either. But it does seem that the different software companies are happy to work with MultiChem in distributing their products and follow-up with end users with training and maintenance. This bodes well going forward as IT security will continue to be in demand as Singapore and other nations in ASEAN move towards more technology based economies.

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?

Valuation looks pretty good at current price which has recently bumped up due to cum dividend. Their historical div payout has been stable and reasonable as well.

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]

Tuesday, May 10, 2016

PNE Industries Ltd - PNE Print Disposal Done!

PNE Industries Ltd (BDA.SI) - PNE Print Disposal Done!

It's been a while since I looked at this stock (previous post here). Ever since it peaked on news of a possible takeover by a mysterious indonesian buyer and sale of PNE PCB subsidiary in Malaysia, the former which did not happen and the latter only selling two thirds, nothing much has been happening. Well there was the 4 to 1 consolidation that happened last year, but that's so common on SGX that its like a WHATEVER for the seasoned investor.

So what's so exciting that warrants a post? For starter's the sale of a loss making subsidiary PNE Print in China has just been completed and the cash, the moolah, the kaching has arrived in PNE Industries bank account (the normal one, not the Panama one, *joking*)

Before thinking of the words special bonus dividend, let's have a look at how the valuation looks like now, BlueFund style:

Market cap : 56 million
NAV : $0.85
Price : $0.665 (21% discount to NAV)
Net cash :  37.56 million (67.24% of MCap)
[FEB div subtracted and PNE Print sale added. ]
Dividend yield : 6.02% (based on interim $0.02 and final $0.02. FY15 EPS was 11.4c)
Daily Volume : What volume?
Debt : What debt?

The discount to NAV is now 21% (not including realised 7.6c from this disposal).  On the other hand, everything else seems to be looking up. Company remains debt free with a nice and bigger stash of cash after this disposal. Earnings look pretty good. Dividend yield whilst not awesome, is pretty reasonable and the recent sale guarantees a nice payout from management, as they did payout very quickly previously with the PNE PCB sale.

In these turbulent and difficult times, with the bad global economy that is now even threatening to cause a recession locally, it would seem PNE Industries has held up pretty well and management has been making all the right moves. Unfortunately even during the market dips earlier this year, PNE's volume and price have not moved much, hence accumulation had to be from the sell queue. PNE Industries half yearly results will be out soon this month and will likely show some good earnings and whilst this sale completed in end April might not be reflected in the books yet, hopefully management will be kind enough to announce a special dividend with the interim dividend.

[author holds shares in this company]

Thursday, April 21, 2016

Captii - Capturing the alluring value

Captii (AWV.SI)- Capturing the alluring value

Captii is a tiny little micro cap which has been listed since 2004 post tech crash and at the beginning of the now quickly maturing mobile phone era. Current share price is $0.46

The usual background story from SGX
[Captii Limited, an investment holding company, operates in the technology and telecommunications businesses in south east Asia, south Asia, the Middle East, Africa, and internationally. It operates through VAS, TECH, OSS, and OHQ segments. The company offers telecommunications, technology, and customized solutions for telecommunications operators, service providers, and enterprises; and research and development, software engineering, system integration, project management, and maintenance and support services for the telecommunications industry. The company also offers global roaming quality and service management solutions; and mobile messaging and signaling, value-added-services, and mobile network operation support systems, solutions, and managed services. In addition, it distributes third party telecommunications products and components, as well as engages in the property investment activities. The company was formerly known as Unified Communications Holdings Limited and changed its name to Captii Limited in May 2014. Captii Limited was founded in 1998 and is based in Singapore. Captii Limited operates as a subsidiary of Worldwide Matrix Sdn Bhd.]

Long story short, Captii makes money from major local telcos in Singapore such as Singtel/Starhub/M1 and Maxis/Digi in Malaysia and is owned by a Chinese Malaysian boss.

Chanced upon it before the recent 10 to 1 consolidation which would translate to a stock price of $0.585 today. At that time, I had only put it on my radar as the dividend yield was low even though other value indicators were pretty good. Since then, the stock has slid to $0.46 and the yearly dividend has been increased to 2.5c.

Let's look at some current valuations in simple BlueFund fashion.
Market cap : 15 million
NAV : $1.01
Price : $0.46 (54% discount to NAV)
Net cash :  13.45 million (91.49% of Market Cap)
Dividend yield : 5.43% (based on 2.5cents, up from 2cent year before)

Historically, they have been consistently turning in profit for quite a few years now. The major shareholder and founder of the company is also still at the helm and doesn't pay himself ridiculously, so that's pretty good for OPMI friendliness and with the increased div now, company is starting to pay out more of their profits. Guess they have no choice, cash is piling up faster than they can distribute. Boss also owns 76.89% of the company which means a possible privatisation could be in the books. Captii could be another takeover target from an overseas tech company as well.

To note, the stock has been trading sideways the past 8 years and in fact has not traded upwards much since its big fall in 2004 from $6 after IPO to below $1 a year later and even as low as 15cents during GFC 2009, so it could be a value trap. But it is now trading at almost cash value and with likely further increases in dividends and yield, this could very well be a BUY in my books pretty soon, once yield goes up a bit more. That is if anyone wants to sell.

[author is going to hold shares in this company]