MacGyver, Techcomp is looking good because of its sterling Fy2011 performance (after stripping out the dual listing expenses and adjusting for a one-off in 2010).
However, don't you think the Accounts Receivables could pose a problem? It's a discomforting item. And until their European acquisitions really record a profit, I think they should pull back any ambition to acquire more companies in Europe.
I wish to share with readers a good discussion on Techcomp at another forum, esp by a seasoned investor named RBM, at
Valuebuddies.com
I have sent Mr Leong CT a full report by CPY. You can email him to ask for the report.
The analyst is very conservative to estimate only a USD 14m profit in 2012. I am expecting more than USD 15m. This means the stock is trading at less than 7x trailing PE.
I believe this is the first of many research reports to come in Hong Kong. Unfortunately, the SG analysts do not understand this industry at all. It is sad that a good company with solid fundamentals has no research reports in Singapore...
Have a good week ahead.
Dear abb, RMB does not understand the Techcomp's business well. For a simple reason that bulk of their sales are done in 4Q2011, would have told you that they will have heavy inventory days at 31 Dec 2011. The Company is reporting quarterly this year. I believe you will see that the receivables at 31 March 2012 would have drop back to normal levels. Regarding the acquisitions, you have to understand that Techcomp did a fund raising in 2007 and only started the acquisitions in 2009-2010. This tells you that the management really studied the available options and not the type to rush into a deal. I believe they would have evaluate their next acquisition for a long time. If you have time, do attend the Techcomp annual general meeting this April. Talk to the Chairman, Richard and the CFO, Gilbert. These peopple are geninue business operations people and they really want to grow the business. Have a good week ahead.
