PCI Limited ( F1E.SI )
PCI Limited is your capable and reliable global electronics manufacturing service provider. Well at least that's what they say on their website. The company was founded in 1972 and is headquartered in Singapore. PCI Limited is a subsidiary of Chuan Hup Holdings Limited.
Stock is currently trading at 46.5¢ today.
Why invest in PCI now?
Business-wise, margins are getting very low, now at 2.5% mainly due to labour costs increases in china. Given the poor global economy, nothing exciting in this space is to be expected.
What is exciting is that the company has just sold its local leasehold property in Singapore and will be moving to a smaller and cheaper location nearby at 35 Pioneer Road North, Singapore 628475. For the new digs, they paid USD 2.243m and sold their old place for USD 13.614m. That's USD11.3m+ added to their bank.
Being debt free, PCI now has a big net cash position of USD59.13m (SGD79.7m), which is 86.09% of market cap today, which is almost 40¢ cash per share. So as we like to say, 6.5¢ for the rest of its assets and profitable business.
PCI has been generous with dividends, paying out 3cents usually. That's a good 6.45% yield.
To note, Chuan Hup Holdings being its parent shareholder with 77%+ interest and a failed mandatory cash offer to privatise in 2011 @ 50cents. Recently they have seconded one of their guys to be the Senior Vice President, Finance. With this new development, another offer coming is just a matter of time.
Expect this year to have another special bonus dividend given the huge cash balance and gains from their property sale. Though there is only a small margin-of-safety of 15% discount to NAV and likely limited upside for its EMS business, PCI is still pretty good for a long term hold until delisting.
[author holds shares in this company]
