Why I like Excelpoint Technology.

Why I like Excelpoint Technology :
 
1. high dividend yield.
dividend declared for year 2012 is 0.8cts per share on current price of 8.9 cts per share (price as on 8 feb 2013). This gives a yirld of almost 9%. Dividend for previous year was also 0.8cts and the year before that 0.3 cts per share.
 
2. improving top and bottom line.
year                                   revenue                           net profit
2010                                  S$620 mil                        S$4.2 mil
2011                                  S$612 mil                        S$5.9 mil
2012                                  S$731 mil                        S$6.3 mil
Company reports in US$. Exchange rate used US$1 : S$1.25
 
3. very decent revenue.
there are not that many listed companies which have this level of revenue. For a company to be able to do a sales of $700+ mil is really quite commendable. There is alot of intangible value here.
 
4. price below nav.
current price of 8.9cts is below its nav of 11.7 cts.
 
5. management sounds positive of further growth.
Management comment .. quote :
"We foresee improving consumer sentiments in China and South East Asia and more stability in the US economy. This landscape augurs well for our business.
Barring unforeseen circumstances, the Group is optimistic about the performance of its businesses in China and South East Asia in the new financial year. In addition to its existing business, it will also be looking for partnerships that can value add and enhance the growth of the organisation."
 
6. decent pe ratio.
its current pe is around 7.2x. For a Singapore company with growth potential a pe of 7.2 is considered low in my view.
 
7. absolute low price.
it has an absolute low price of 8.9 cts per share as on 8 feb 2013.
 
A quick summary:
I like the company because it has a high dividend yield, is trading below its nav, has shown improvement in its top n bottom line with very decent revenue, a reasonable pe and positive management comments.
 
Notes(1): Its a Singapore company listed on 7 jan 2004 at a price of 25.7 cts.
Excelpoint is an electronic components distributor serving customers who are primarily original equipment manufacturers (OEM), contract manufacturers and sub-contractors for a wide range of industries including that of telecommunications, consumer electronics, industrial and instrumentation electronics, automotive, computers and computer peripherals et cetera. Their businesses can be divided into 2 major segments, distribution and design-in services.(source ShareInvestor)
 
Notes (2): the 52 weeks low n high is 5.2 to 8.9 cts per share. Currently it is trading at its 52 weeks high. The highest ever traded was 41cts on 26 Jan 2004 and lowest was 2 cts on 2nd march 2009.
 
Above is not an invitation to buy or sell. Should you have interest in the company, please do your own analysis n conclusion. Fyi i am heavily vested in view of the high dividend n potential future growth (may/maynot happen). My previous posts were Why I like Kian Ann, Why I like Foreland n Why I like Swing Media. 2 other companies mentioned by me in this site ie SMB n Eastern Asia Technology were taken private.
 

I once was into Excelpoint shares but no longer are vested. Joseph, I think you sharing is good. The biz has done better in recent years. and I am sure the stock price will make you happy in the future.

If I may, I want to say that I just don't feel attracted to it because the business operates on razor-thin margins of less than 1% net profit. It's a dog-eat-dog industry. I am looking at business with stronger margins.  

Yes Viviene, the razor thin margin is a point of concern.
It reminded me of a company I invested in many years ago .. ECS. At that time it had something 40,000 points of sales all over Asia .. China, Singapore etc. Its turnover was around a billion dollar annually but its operating margin was very low with a net margin of between 0.8 to 1.2 %. At that time I remembered what Benjamin Graham once said that there are some companies w intangible values which when unlocked will boost the value of the company. In the case of ECS, the 40,000 points of sales is an intangible asset. It puts the company into a position where manufacturers or brand owners would like to work w them. And if the company decide to take a decision to improve it's margin by even a small percentage it would contribute alot to it's bottomline primarily bcoz of it's high revenue. I went in at 32cts .. subsequently the shares shot up to around a dollar. I sold at 40plus cents. The company was later taken private n recently it was relisted again.

To some extend Excelpoint reminds me of ECS. A revenue of $700+ mil is certainly a big company. Should the company decides to improve on it's margin it will have alot of implications on it's bottomline. Frankly, it is not that difficult to improve margin if the company want to .. they can negotiate for better cost w their supplier, adjust their selling prices or launch a costs saving program for the company (light, utility, stationery, travelling expenses, entertainment etc etc). Or they may put more emphasis on sales of higher margin products.This would certainly boost their margin. A company w a revenue of $700+ would certainly have enough clout over their suppliers. End of day it is a question of management direction .. where they want to put emphasis n where they want to go.

The other key point on Excelpoint is the dividend which is around 9% at current price.

Viviene, thanks for your interest in my posting and do appreciate your view/perspective on the company. May u be blessed!!!

Hi Josephyeo,

What is your thought on Pacific Andes?

Currently trading at discount to NTA and business pretty stable with good dividend as well.

Regards
Yee

Sorry erelation/Yee, I do not know enough of Pacific Andes to give meaningful comments. Anyway, all the best to you.

 
 
Result for the last 2 quarters ie july to sept 2012 and oct to dec 2012 have been very encouraging with profit of S$1.9 n S$2.1 mil respectively. This work out to be S$4.0 mil.
If the profit trend persist, we will be able to see a set of very good result this current financial year 2013 on top of the attractive dividend yield.
 
On current price of 9.5 cts and dividend of 0.8 cts, the yield is around 8.4%.
 
[hr]
[josephyeo 12-02-2013]:

Why I like Excelpoint Technology :
 
1. high dividend yield.
dividend declared for year 2012 is 0.8cts per share on current price of 8.9 cts per share (price as on 8 feb 2013). This gives a yirld of almost 9%. Dividend for previous year was also 0.8cts and the year before that 0.3 cts per share.
 
2. improving top and bottom line.
year                                   revenue                           net profit
2010                                  S$620 mil                        S$4.2 mil
2011                                  S$612 mil                        S$5.9 mil
2012                                  S$731 mil                        S$6.3 mil
Company reports in US$. Exchange rate used US$1 : S$1.25
 
3. very decent revenue.
there are not that many listed companies which have this level of revenue. For a company to be able to do a sales of $700+ mil is really quite commendable. There is alot of intangible value here.
 
4. price below nav.
current price of 8.9cts is below its nav of 11.7 cts.
 
5. management sounds positive of further growth.
Management comment .. quote :
"We foresee improving consumer sentiments in China and South East Asia and more stability in the US economy. This landscape augurs well for our business.
Barring unforeseen circumstances, the Group is optimistic about the performance of its businesses in China and South East Asia in the new financial year. In addition to its existing business, it will also be looking for partnerships that can value add and enhance the growth of the organisation."
 
6. decent pe ratio.
its current pe is around 7.2x. For a Singapore company with growth potential a pe of 7.2 is considered low in my view.
 
7. absolute low price.
it has an absolute low price of 8.9 cts per share as on 8 feb 2013.
 
A quick summary:
I like the company because it has a high dividend yield, is trading below its nav, has shown improvement in its top n bottom line with very decent revenue, a reasonable pe and positive management comments.
 
Notes(1): Its a Singapore company listed on 7 jan 2004 at a price of 25.7 cts.
Excelpoint is an electronic components distributor serving customers who are primarily original equipment manufacturers (OEM), contract manufacturers and sub-contractors for a wide range of industries including that of telecommunications, consumer electronics, industrial and instrumentation electronics, automotive, computers and computer peripherals et cetera. Their businesses can be divided into 2 major segments, distribution and design-in services.(source ShareInvestor)
 
Notes (2): the 52 weeks low n high is 5.2 to 8.9 cts per share. Currently it is trading at its 52 weeks high. The highest ever traded was 41cts on 26 Jan 2004 and lowest was 2 cts on 2nd march 2009.
 
Above is not an invitation to buy or sell. Should you have interest in the company, please do your own analysis n conclusion. Fyi i am heavily vested in view of the high dividend n potential future growth (may/maynot happen). My previous posts were Why I like Kian Ann, Why I like Foreland n Why I like Swing Media. 2 other companies mentioned by me in this site ie SMB n Eastern Asia Technology were taken private.