In view of compelling valuation and strong balance sheet and sustainable high dividend yield, target price for Valuetronics raised to 64 cents by Phillip Securities - report out this morning.
Great news. By sheer luck, I added another 40k this morning because I felt .405 was cheap given the impending div. Very lucky indeed.
I analysed Valuetronics's QTR revenue and profitability for past 2 years and this is my finding.
ICE – rising sequential Q growth in revenue (since Q3 13), better margins than CE (17% against 10%).
ICE/Total Rev = FY13 - 28.4% FY14 - 32%
CE – though seasonality trend is evident with weaker 2H, however, seasonality impact is lesser in FY14 with stronger 2H14 sales (up 15.5% y-o-y).
2H13/1H13 = 73% 2H14/1H14 = 87%
Overall, supported by 2H14 revenue strength, I expect revenue growth, for both segments, to continue into FY15. Lower seasonality trend for CE will ensure better distribution of quarterly revenue. Strength in ICE revenue looks set to maintain given record revenue for Q4 14 and positive growth trend since Q4 13.
Given my analysis, I expect FY15 performance to be better.
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