Captii (AWV.SI) - 3Q Results 2019 Update

Captii (AWV.SI) - 3Q Results 2019 Update

It's been a couple of boring years with this stock. Since my last write up here the stock has been slowly going down in price, though only very gradually and on very very small volume. This is consistent with its poorer results these past couple years and cut in dividend.

In any case, at a price of sub 40c, the valuation on this micro-cap is still looking quite good.

Let's have a closer look at the financials in simple Blue Fund style :

Market cap : ~12 million
NAV : $1.36 (up from 1.01 couple years back)
Price : $0.38(72% discount to NAV)
Net cash :  6m (previously 13.45 million)
Dividend yield : ~3.3% (based on 1.25cents, down from 2cent year before)
Earnings : already 8c+ (likely to hit 10c+ for FY results)

From the current numbers, even with the drop in share price, Captii does not really seem anymore attractive than before.  Since 2016 Captii has put on some debt, all of it short term at 1.5m. This has cut into the net cash pile which is now only 6m, half of what it was before. Having said that its still half of market cap, quite a significant chunk. The drop in dividend by half also means the yield is nothing to be excited about at 3.3%.

Positives is the NAV has risen to 1.36m, though a big portion, about a third is in intangibles and other financial assets. Captii's business also looks to be rather resilient in face of slowing global economy and trade tensions and most importantly still very profitable with high margins. It will be important to monitor losses from its venture investments though as these can result in bad results for the company despite a solid core business.

Will probably watch and wait a bit more to see what happens with the dividend payout in Q2 next year. Definitely worth accumulating more if management restores the 2.5c payout again. Captii is easily able to afford to pay that with the earnings of 8c+ its already made so far.

[author holds shares in this company]

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]

CDW Holdings (BXE.SI) : Another big round of share buy backs.

CDW Holdings (BXE.SI) : Another big round of share buy backs.

Massive share buy back exercise ongoing after Q3 results. so far hit 1.33m+ shares liao. Ongoing in a big way today as well. It is still trading around 97% net cash value @ 0.255 price, though price has gone up roughly 10% from 22c levels a couple weeks ago.

I vaguely remembered that they did do some big buybacks in 2012. So went back and had another look. Indeed they purchased 19,229,000 out of the authorized 47,748,000 shares from Oct 2012 right till the beginning of Jan 2013. This was later given out mostly as employee stock options to management. Some getting as much as 2m+ shares. The share price was pushed up 50% during this exercise. Treasury shares got boosted to 44,632,000

This time round, the authorized number is 23,745,700(which is about the same as last time, factoring the 2:1 share consolidation. So far as of closing last friday, company has bought back 1,332,300 only. Treasury shares stand at 15,552,302. It is very likely CDW will buy back another 7-8million shares to top up the treasury.

I was waiting for the usual insider buys to go with the share buybacks but looking at 2012's buybacks exercise, it seems management will not be doing any buying, unlike what Avi-tech's boss did. 

In 2012, CDW recorded a jump in revenue and profits in their 4Q report right after their massive buy back exercise. In this 3rd quarterly report management has hinted they were in testing phase for volume production of their new product with a new client. They have also cleared out a factory in China for future OEM production. It seems with this buy back exercise, this testing may have been successful and company could be announcing a big deal in next year's 4Q, commencing mass production at the cleared up factory. Of course this is speculation at this point.

In any case, being at net cash value, I have finally decided to start accumulating despite a slightly improving market from oil price recovery, as I feel should 4Q result be bad, downside is limited whilst upside could be substantial if history repeats.

[author has shares in CDW Holdings.]

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.

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.