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.


Monday, March 7, 2016

New Toyo - Have they got their heads on?

Will the increasing use of medical marijuana benefit New Toyo?

New Toyo (N08.SI) - Have they got their heads on?

Past couple months have been pretty boring hence the lack of new posts. However now that earnings season is in, let's have a look New Toyo (current price $0.24)

[Established in 1975, New Toyo International Holdings Ltd ("New Toyo") is a leading regional provider of specialty packaging materials to the tobacco, food & beverage, wine, liquor and cosmetics industries in Asia Pacific.

The Group has two core business divisions. Its Specialty Papers division focuses on the production of laminated foil paper, and coated paper and metalised paper, while the Printed Carton and Labels division offers mainly gravure and lithography or offset printing of packaging materials for cigarettes and fast-moving products. In addition, the Group has a trading business that focuses on tobacco packaging-related materials, as well as a corrugated cartons production operation.]

Business wise, in the past half year, nothing exciting has been happening to this stock. New Toyo still derives most of its income from Tien Wah (a printing company based in Malaysia) via tobacco carton printing contract with British American Tobacco.  Both revenue and earnings have had a dip and been trending down YearOnYear around 10% and share price has also accordingly been on a downtrend. Looking at the latest quarter, revenue seems to have started increasing again with earnings back to 1c+ a quarter.  This is likely due to closing down of operations in Australia and ramping up of production in Vietnam. This is now complete and we are very likely to see nice profitable quarters going ahead.

With annual EPS now at 3.34cents and quarterly EPS 1.03cent, it would be reasonable to expect at least 4c in the coming year. Wouldn't describe management as as prudent bunch or good with their investments, as history has shown with a "toilet paper" fiasco, which is now done and dusted, so we won't go into that. What is good now is that management is still consistent with their dividend payouts and has increased the half yearly 0.6c div to 1c. At current earnings rate this is both sustainable and generous with a total 1.6c for our investing troubles this year. That's a respectable 6.67% div yield soon to be paid out in May, and should interim be increased to 1c as well, we could be looking at 8.33% yield in half a years time.

Let's look at some current valuations in simple BlueFund fashion.
Market cap : 105 million
NAV : $0.386
Price : $0.24 (38% discount to NAV)
Net cash :  51.2 million (48.78% of Market Cap)
Dividend yield : 6.67% (based on 1.6cents, historically >1cent a year.)

NAV is $0.386 which provides a Margin of Safety of 38%.
Though debt is still 27.5 million, this is 5.1million less compared to last year and will likely be paid down more in the coming year. The cash balance of 79million will easily cover that and result in net cash of almost 12cents a share.

In the coming years, things are definitely looking good for New Toyo. This stock will likely be a profitable cash generator and we may even have surprises if NT decides to do something with the valuable Australian industrial land near to Sydney Airport and some lands in Malaysia as well. With the recent announcement of rights issue for Tien Wah, it does sound like something is in the books.

[author holds shares in this company]