From OCBC Research "Valuetronics Holdings: 1QFY12 results within expectations
Summary: Valuetronics Holdings Limited’s (VHL) 1QFY12 results were in-line with our expectations. Revenue of HK$527.1m (+33.4% YoY; -0.9% QoQ) was 3.7% above our estimates while net profit of HK$84.2m (+9.5% YoY; +12.7% QoQ) was just 0.8% higher than our forecasts. The group’s strong sales momentum was driven largely by its OEM segment, which posted a stellar 36.1% YoY growth. Its ODM and Licensing segment also delivered sales growth, although gross profit margin declined 70 bps YoY to 16.0% due to a change in sales mix. Moving forward, we are encouraged by the addition of new OEM customers to VHL’s portfolio. However, we lower our target peg on VHL from 8x to 7x FY12F EPS as we take into account the uncertain global economic landscape and also update our HKD/SGD assumptions. This in turn lowers our fair value estimate to S$0.41 (previously S$0.49). Nevertheless, with VHL now trading at 3.4x FY13F PER, against our projected EPS CAGR of 12.3% from FY11-FY13F and ROE of 26.0% in FY12F, we opine that valuations appear attractive. Reiterate BUY. " What is everyone waiting for?
Valuetronics does indeed offer an impressive dividend yield. One thing that holds me back though is the low net profit margin of only 5%. Problem with low margins is that they can easily turn to losses even if costs escalate just a little.
We recently saw this problem with Xinren Aluminum as well, which has great revenue but very low margins that recently turned into losses due to decreased aluminum prices.
Not much upside for this counter
record profits and revenue for FYE 31Mar 2012 yet price stagnated at 25-26cts
the CEO and His ED sold 14mil and 12mil not long ago create an overhang..
dividends 17cts vs 14cts last year though no bonus despite this is the 20th year of co's inception..
CEO not consider dual listing in H K though co's primary operations in PRC..
realted co's transactions of HKD 3mil since ipo inception in 2007 as verified by indep director..
very embarassing when U see everybody rushed for food and like last year at Amaara Hotel nothing is left after the 10th person help himself..same scenario at M.Hotel today...
cheapskate co..probably co directors flown in and package deal stayed at M Hotel and the meagre food is served free..ie co doesn't border to cater food for everyone though this is a once a year affair..