Friday, March 16, 2018

VICOM : Check out my Vezel

If only VICOM inspection came with this kind of carwash. 韩子萱

VICOM : Check out my Vezel

Since the STI has gone past 3500 and there's not much value to be found in small caps, I have been looking a bit at the big caps. Most big/mid caps can't be valued on NAV, but they can be valued on the usual revenue/growth/earnings and dividends.

Stock is currently trading at $6.11.

I was quite surprised to find a couple of bread and butter / defensive stocks still giving good yields and one of them was VICOM.

For a good overview of this company, follow the link below to this article from 2015. Most of the aspects of VICOM's business has been covered and I will not be wasting time talking about those.

Investing in VICOM: What You Need to Know About its Business Before You Invest

If you have read the above, you will now have a rough idea of what VICOM does and where its revenues come from.

Furthermore this stock has been written about by

Vicom Limited Is Trading Close To Its 52-Week Low Price: Is It A Good Business?

So why do I think VICOM is attractive as a dividend play?

Well check out this chart below
After a few years of highs from 2005-2008, the GFC came around and suddenly there was a decline in new car registrations from 2009 onwards all the way up till 2014. New car registrations really started picking up only in 2015. And whilst Cat A registrations seem to be tapering off at 50k in 2017, it seems CAT B new car registrations have hit highs again ~45k in 2017. This give us a grand total of >90k CATA/B and >100k new car registration in the past year.

As new cars start being inspected afer 3 years, the rising new car registations from 2015 onwards will hit the inspection requirement in 2018. As such, we can expect business to start improving for VICOM's inspection business. On top of that, contribution from their other segment is expected to remain stable as well.

To note, most of the gains in this stock would have been made post GFC as the stock went from $2 to peak at $6.70+ in Aug 2014. The stock has then slowly trended down, going as low as $5.70 in 2016 and has more or less stayed there for the past 2 years.

Of course it would have been better to pick up this share last year @$5.70 price range, but with a yield of around 5.89% at closing price of $6.11, it would make sense to accumulate this stock as part of a long term dividend portfolio. Revenue and profits are very likely to rise in the coming years and this stock should be very resilient should the economy slow down in the near future. And given that local investors are often pretty yield hungry, VICOM could be bought up till its yield becomes 4%, especially if revenue and profits increase in the coming years, as the high number of new Vezels, I mean cars, from 2015 to 2017 hit the inspection market.

Thursday, March 8, 2018

Happy Chinese New Year 2018

Yep another year has passed and it's been 9 months + since I last posted here! hopefully you people have this site on your feeds and updates should show up.

First off, wishing all of you a happy CNY 2018!

Indeed 2017 has been a very profitable year and it seems 2018 will too.

I have been pretty lax with the company updates but the market has been roaring, gosh our STI has hit recent highs of more than 3500+ which is around the same as the highs of 3800+ reached at the peak of 2007 before it went down and we had the GFC. This seems to have lifted all boats, hence really nothing much to write about since it has become really hard to find value stocks that have potential.

In any case, I will be back to updating my thoughts on companies I am looking at and hopefully the market will have a correction or crash so that it will be so much easier to find value.

Saturday, May 27, 2017

Powermatic Data Systems Ltd (BCY.SI) - Full Year 2017 Financials.

Powermatic Data Systems Ltd (BCY.SI) - Full Year 2017 Financials.

Hi to the select few readers of my blog. It's been a while since my last blog on this stock  2 years ago when I first started The Blue Fund blog.

Back then the share price was 18c. Powermatic has since gone through a share consolidation of 5 to 1. So a price of 90c post-consolidation. Though it would be nice to put out a short post on how things are going with this company.

It seems the company has not done much in past 2 years. It has managed to improve its property and rents are going ok now and has had some cost savings moving into this property.  As the commercial property market hasn't crashed, the value of it's main property asset is still doing ok.

It's other arm of business producing Wireless and network products is not growing át all but at least is going at a steady pace. Revenue has been flat despite improved global conditions in the past half year.

What's surprising is in the last half year, there have been some realisation of profits from available for sale assets of $3 million, which has not only boosted earnings but also net asset values (NAV). As I had alluded before, this company is going towards more and more of a holding investment company, rather than a technology manufacturing one.

Going forward, it seems boss Dr. Chen Mun will be going back to doing more R&D and leaving the main running of the company to the younger Katherine Ang, which looks like a good thing.

It will also be interesting to see if the company is really working with Google and Uber on some secret project, perhaps some sort of wireless self driving technology which is the buzz with electric vehicles and drones becoming mainstream. Management had alluded to this in last year's AGM.

Of note, the company now has a pile of liquid assets of 25.95million and no debt vs. a market cap of 42million (61.59% of Mcap). Whilst NAV has gone up to $1.51, RNAV is probably in the vicinity of $1.90 now.  Earnings are 8.1c per share at the moment, however they would probably moderate to 5 or 6cents should global business conditions deteriorate in the near term. Co. has a pile of excess cash on hand, perhaps we will see this cash pile reinvested into the above-mentioned projects which management had mentioned last year, it seems like management is not going to return much of that to shareholders in the short term.

For this year at least, management has been pretty generous and has announced a record dividend payout of 7c, an additional 2c to the usual yearly 5c payout. With the recent fervor in manufacturing stocks still going strong on the SGX and Tech stocks in general, it seems this big fat dividend payout may be a short term catalyst in pushing up the share price in the near future.There is also a slim possibility that the company could be sold off or privatised as Top 20 shareholders own almost 80% of all the shares.

Now all we need is an analyst from CIMB or someone from The Edge or NextInsight to do an article, fingers crossed!!

[author holds shares in this company]