PNE Industries (BDA.SI) - Full Year 2016 Results Update

PNE Industries (BDA.SI) - Full Year 2016 Results Update

Wow the year is almost over. PNE Industries finally released their full year results for 2016. Most of it has come in as expected. The stock has run up from 60c lows to hot above 80c these past few months.

Revenue has remained somewhat flat YoY at 74m. There was a sizeable contribution of 6.7m from the sale of PNE Print which has boosted profits. Excluding this gain, profit for the year would be $9.5m. That's pretty good. It also seems PNE has and will continue to benefit from the depreciation of the ringgit and appreciation of US dollar. Given that Ringgit has recently fallen even more recently and will likely continue to fall as funds move out of emerging markets, we should expect PNE to benefit from forex gains and lower costs of production from PNE's Malaysian factories.

Dividend of 3 cents was announced, including the 5c interim paid out already, 8c from a total of 19.3c EPS comes to about a 40% payout ratio. This is pretty ok for OPMI but somehow doesn't feel as generous as before. Perhaps management is planning to utilize the spare cash for something else.

One thing that sticks out is that PNE has initially announced that USD 7.366m(~SGD 9.94m using a rate of 1.35 as when this report was made) was received as payment for PNE Print with another 1m RMB(~SGD 200k) withheld by Chinese tax authorities. If that is the case, both figures of SGD6.7m as the "gain on disposal" and SGD8.748m as "proceeds from disposal of subsidiary",  do not match up with the SGD 9.94m that was supposed to come into the bank as announced on 18 April 2016. Even taking a lousy rate of 1.2x USD/SGD, at least 9.2m proceeds should have appeared on the books.  This shortfall of a million SGD is either a mistake from the accounting department or some other reason.

In any case, NAV is now 96c and the balance sheet is looking fantastic with no debt and net cash of 60% of market cap, so hopefully there will be some volume to sell into over the next few days and for the stock price to hit NAV.

Recession is coming to town.

Recession is coming to town.

It sure looks like a recession is coming to our shores.

First our GDP has disappointed.
Singapore Q3 GDP grows 0.6% year-on-year, below expectations

And yesterday exports continue to contract in a big fashion Month on month and year on year.
Singapore October exports contract 12% in worse than expected slump

It's no joke, when recession hits, many people will suffer pretty badly financially. If the recent crash and defaults in Oil n Gas companies in Singapore have shown us anything, it is that many investors invest in companies they don't understand or in financial products they know next to nothing about.

Whilst most people are getting concerned, value investors will be rejoicing. There are many things to buy during a recession, but most importantly there has to be cash in the bank. Get ready, shopping season will be starting soon.

Captii (AWV.SI) - 3Q Results 2016 Update

Captii (AWV.SI) - 3Q Results 2016 Update

As the year end earnings season comes around, I will be updating results from companies I am keeping track of with a quick and short summary. Let's start off this season with Captii (AWV.SI)

To be fair, it has been a challenging year for Captii. But this is to be expected given that the global economy has not been doing that well and Singapore has been hit quite badly by the collapse of the OnG and Shipping industries.

The good news is Captii still remains pretty profitable, making 1.25c of EPS this quarter and 5.05c for 9m of this year. This means the dividend payout next quarter of 2.5c is more than safely in the bag, providing a dividend yield of 5.38% @ $0.465 price today. Though net cash has decreased due to capex this quarter, it still remains at a high 75% of market cap and Captii remains debt free.

Of note is that trade receivables has increased to over 9m from 6m last quarter. Whilst it is a recent high, this was also observed in 2014 and it is likely Captii will get a lumpy payment in the next quarter or so.

Azeus Holdings (BBW.SI) - Profit Warning

Azeus Holdings has been on my radar for a while. Decided to do a short post on this under the radar stock.

[ PROFIT GUIDANCE released 10 Oct 2016 :
Following a preliminary review of its unaudited financial results, the Board of Directors (the “Board”) of Azeus Systems Holdings Ltd. (the “Company”, together with its subsidiaries, the “Group”) wishes to advise its shareholders that the Group is expected to report a net loss for the financial period ended 30 September 2016 (“1H FY2017”) and financial year ended 31 March 2017 (“FY2017”).

The loss is mainly attributable to:
- Higher expenditure relating to the Group’s continued commitment in building up our capacity, as well as aggressive and material investments made in the Group’s Products business to boost its growth.

- Lower revenues mainly due to fewer IT services projects secured in the current and previous financial years, in light of the lower number of IT services tenders available for bidding compared to previous years.

Further details of the Group’s financial performance will be disclosed when the Company announces its unaudited consolidated financial results for the Group for 1H FY2017 on or before 14 November 2016.

Shareholders and investors are advised to exercise caution when dealing in the shares of the Company. Persons who are in doubt as to the action they should take should consult their stockbroker, bank manager, solicitor, accountant or other professional advisers.]

At the moment this IT stock is trading at almost net cash (11.3m+ vs a Mcap of 12m) and with no debt it is a pretty safe investment. Question is at what price will it be cheap, considering gov in Hongkong is changing as China tries to muscle in and there is much uncertainty with policies as well as gov spending on IT going forward...

[author is not vested in this company]