Techcomp

Up 1.5 c now to 35.5 cents. Which makes it tough for fans *(incl my friends) to decide: buy up? or wait longer for a price drop to below 30 c?

Steady bird: now at 37 cents. PE around 8X, cheap for a steady business that has grown consistently at above 20% annually. My friends hope it goes for a dual listing in its home ground, HK.

Hi neontet and Dello; Currently very few houses covered this stock. The moment it achieved US$10m profit in FY2010, the bigger houses will come and initiate on Techcomp. If we value Techcomp at 10x, then we are looking at a US$100m company or S$140m. The current market cap is only S$85m. Still a long way to go. Techcomp\'s peers trade at 20-38x in USA and Europe. Unfortunately, the analysts in Singapore are too immature and ignorant. They are usually between 25-35 years of age and knows only finance and statistics. Most of them don\'t even know much about the supply chain of the industry that they covered. I don\'t blame Techcomp if they delist and go elsewhere to list. 12-month target price is 60 cents (10x FY2010 EPS) :laugh: :laugh:

Hi MacGyver, Your calculation looks incorrect? Using 2009 earnings of 4.75USD cents, it would equate to 4.4SGD cents post bonus share issue and exchange rate of 1.4. Valuing it at 10x would just give 44cents, an upside of 15% assuming earnings stay flat. Do you think there will be an impact to the recent European acquisitions as well? Not only may they not contribute to earnings growth, will they drag down the overall performance?

Hi soyabean, Nope. You are looking at 2009 while I am talking about 2010. FY2009 profit was USD 7.5m. Post bonus, the Company has 232.5m shares. EPS will be 3.2 US cents. This is equal to SGD 4.5 cents. 10x PE will give you 45 cents as you correctly pointed out. This is already June 2010. Hence I am not concerned about 2009 results and looking at 2010 earnings. I spoke to the IR agency as well as the management in HK via a telecall. They affirmed that the Euro crisis has minimum impact on their european acquisitions. In any case, my expectation of USD 10m profit does not take into account any contribution from these 2 acqusitions. I am expecting them to post small losses or breakeven at best. But they will boost sales to around USD 140m to USD 150m. My expectation for growth comes from the manufacturing side where the operations have hit economic of scale and is likely to hit an exponential growth in the coming 1-2 years. Something like a tipping point. Thanks.

I see, thanks for the clarifications. So you were looking at an EPS of SGD 6 cents going into 2010 indeed. Thats an increase of 33% over the previous results. Reason why I\'m comparing against 2009 is because the above looks a bit optimistic to me. Anyway, whilst these postings were made, the price just made another leap upwards. I hope your expectation is correct. I\'ve already taken my profit though, cos I think downside protection is no longer as attractive as before. Was looking at a re-entry but the way things look now, guess the chance\'s gone. All the best to you though.