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 tech 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]

STI 3150 - Time to take profits.

STI 3150 - Time to take profits.

 

Its almost the end of the month and guess it's due for another blog post. Unfortunately with the STI trading at above 3150 points which is just 10% from its last peak, not much value has presented itself.


A lot of stocks have performed very well in this period, as have many that I have discussed.

This is a common occurence when markets are good. Most stocks will go up, as positive sentiment sets in and often earnings will be improving as well.

However, we should not forget that markets can turn, and sometimes very quickly and very sharply. There is nothing we can do to predict this event. But history tells us that this can and will happen at some point in time.

STI has risen by 10% from 2800 level. With this in mind, it is probably time to take some money off the table. Thankfully with recent big rises in stocks, have been able to pare down some positions and build up the cash position further.

Remember, 
When every one is happily buying and buying, its time to be selling and selling. Once the party is over and every one is selling and selling, that's the time to be buying and buying. That's when you will need your cash position.

Goodnight and feel free to drop a comment. Hope to see you guys at STI 2800 again!

PNE Industries (BDA.SI) - Finally hit NAV again.

PNE Industries (BDA.SI) - Finally hit NAV again

Hi everyone. A short update.

With the current run-up in our stock market, STI is now around 3150, back to 10% below previous recent highs of 3500, many small cap stocks have had a spectacular run up.

Since its full year results release, PNE Industries has not disappointed either. The share price has finally hit 96c. This is slightly below its NAV of 96.3c but considering the recent big dividend payout, its close enough.

As such I have started to pare down my holdings in this counter, recoup my capital and lock in gains whilst leaving some free shares. This will replenish my cash holdings and will add to my free shares holdings :D

Thank you Trump rally.

Multi-Chem Limited (AWZ.SI) - Full Year 2016 Results Update

Multi-Chem Limited (AWZ.SI) - Full Year 2016 Results Update

As expected a stellar financial year for Multi-Chem. Business is chugging along nicely. Revenue has been flat but profits remain robust. EPS this last quarter being boosted by forex gains of ~1m from USD going up and 1.4m or reversal of doubtful debt allowances.EPS for FY16 was 10.8c. A big dividend of 3.3c has also been announced. This brings payout ratio to 40% which is nothing to shout about but fair.

Of note,
1) debts have been halved pretty quickly from 22m+ down to 11.5m now. The company will be able to go debt free at anytime.
2) A recent sale of factory land in China for 8.3m should bring cash to 58m+ and net cash to market cap to 65%. Though this sale was only slightly profitable and NAV will not be getting a boost, it is good to see Mgt. might be looking to slowly exit this business, which is not contributing much at this point, and focus more on the new core business.
3) The recent insider buy in @ 52c after 3Q results last year shows that mgt. already knows good results were on the way.

The share price has reacted accordingly after this results release. Since covering this stock at 52c, price has moved up to 78c at close yesterday. Though on not much volume. Given that top insider ownership is pretty high, this is to be expected. IMHO it is very possible a privatisation could be on the way.


[author holds shares in this company]

Memtech International (BOL.SI) - Making some Beats

Memtech International (BOL.SI) - Making some Beats

It's been almost 2 years since I started this blog with a first post on this stock. Much has happened since then. Memtech did well back then, stock price rose from 10c to over 15c(75c+ post consolidation) and then met with some hiccups and made some losses. Memtech has since done a 5:1 consolidation and share price has gone back down to the current 62cents (it did go down to around 55cents when announcing loss making quarter last year). Currently, there seems to be a loss of interest in the stock  from investors.

Memtech is now supplying plastic automotive components to world number 6 automotive parts company Faurecia (which makes car interior components). Faurecia makes interior parts for many major automotive companies, including Tesla. Memtech has been supplying Faurecia for the past year for Tesla model X and S. This year with ramp up of upcoming mass market electric car Tesla Model 3, it looks like there will be a flood of orders coming in for Memtech. Whilst Memtech is only making parts for the climate control system a.k.a aircon (those knobs and stuff you press) there will be avenue for memtech to branch into other parts as Faurecia provides solutions for all the interior parts and Memtech has expertise in Rubber/Plastics.

The other big boost Memtech could get is from its production of parts for major headset brand Beats by Dr. Dre. Apple bought this brand couple years back and Memtech has been making parts for their headphones. However there were some issues with Apple's cost cutting with a contract renegotiation that resulted in the poor results last year. Another popular brand for streaming movies with a TV plug-in stick called Roku has Memtech supplying it as well.

Memtech's most recent 3Q16 results are looking up though with EPS of 2.2 this quarter. Let's have a look at how the valuation stacks up BlueFund Style :

Market cap : SGD 87.346 million
NAV : $1.10
Price : $0.62 (45% discount to NAV)
Debt : 3.04 million (3.48% of MCap)
Net cash : 41.92 million (44.52% of MCap, this includes the $8m coming in from recent factory land sales.)
Dividend yield : 4.84% (based on about 3c past few years. Dividend policy of at least 30% payout)
Daily Volume : What volume? (my favourite type of volume :D)

Usually I try not to dwelve too much into the companies business. The sector the company operates in is more important most times. For memtech, automotive sector in China looks weak this year after sales tax on small cars were reduced last year to spur demand but have been put up again. However consumer electronics sector looks to be stable if not strong so memtech should be able to stay profitable this year.

Management is also trying its best to bring the company into the new-age. The transition of boss to his son should go smoothly as well. In view of this, it looks like an opportune time to start accumulating this now unloved stock. I do hope management looks to cheaper asian countries like Vietnam to move and diversify some of their production.

[author has shares in Memtech International.]

Happy New Year 2017

Happy New Year to everyone and welcome to my humble blog.

2016 brought us the Brexit and Trump :D

2017 looks like it's shaping up to be a very very interesting year. Markets are all bubbly and happy but will this last? Well we'll see, in the mean time, keep vested, enjoy your dividends and polish your elephant guns!