This is exactly the sort of company whose share price looks set to benefit from the S$5bn MAS funding.
The share price bump today perhaps just the start - positioning has similarities to Frencken/UMS
Volume seems strong today. 41cts resistance level very strong.
Will benefit from its pivot to EV and AI segments. Dyodd but i believe this small cap will catch up to its 52wk high of 56.5.
InnoTek conducts buybacks following robust FY2024
The four sessions spanning Apr 21 to 24 saw 14 primary-listed companies conduct buybacks with a total consideration of S$20.7 million
[SINGAPORE] Over the five trading sessions from Apr 17 to 24, institutions were net sellers of Singapore stocks, with net institutional outflow of S$14 million. This brings the net institutional outflow for the 2025 year to Apr 24 to S$1.79 billion.
Institutional flows
Over the five trading sessions through to Apr 24, the stocks that saw the highest net institutional outflow were UOB : U11 +0.34%, Yangzijiang Shipbuilding Holdings : BS6 +0.92%, DBS : D05 +0.02%, CapitaLand Ascendas Reit : A17U 0%, Venture Corporation : V03 +1.77%, Sembcorp Industries : U96 -0.31%, Sats : S58 +0.36%, Mapletree Industrial Trust : ME8U -0.98%, Thai Beverage : Y92 0%, and Wilmar International : F34 -0.32%.
Meanwhile, Singtel : Z74 -0.79%, Singapore Exchange : S68 -0.97%, ST Engineering : S63 -1.23%, Singapore Airlines : C6L +0.91%, ComfortDelGro : C52 0%, Genting Singapore : G13 -2%, Sheng Siong Group : OV8 +0.57%, Jardine Matheson Holdings : J36 +5.76%, City Developments Limited : C09 -1.19%, and Sinarmas Land : A26 +1.61% led the net institutional inflow over the five sessions.
From a sector perspective, telecommunications and industrials again experienced the highest net institutional inflow, while financial services and Reits saw the most net institutional outflow.
Share buybacks
The four sessions spanning Apr 21 to 24 saw 14 primary-listed companies conduct buybacks with a total consideration of S$20.7 million. OCBC : O39 -3.87% led the consideration tally, with 702,600 shares bought back at an average price of S$16.37 a share.
The manager of ESR-Reit : J91U 0% also bought back 5 million shares at S$0.21 a unit.
InnoTek
On Apr 21, InnoTek bought back 671,500 shares at an average price of S$0.37 per share. This was the first buyback conducted by the company since May 2013.
In 2024, InnoTek made significant progress to strategically transform its business. The group began manufacturing graphics processing unit (GPU) server components, becoming a key supplier in a short time. They also expanded into new sectors such as gaming machines, medical equipment, and EV components, enhancing resilience and long-term growth.
InnoTek also moved up the value chain in its manufacturing capabilities, establishing Mansfield Surface Treatment (Dongguan) to improve product quality and processing speed. The group is also growing its presence in Thailand and Vietnam, exploring further expansion in South-east Asia.
For its FY2024 (ended Dec 31), the group achieved revenue of S$238 million, a 15.8 per cent increase from FY2023 as nearly all its business segments secured higher sales volumes. Attributable net profit also increased by 23.4 per cent to S$5.8 million from S$4.7 million in FY2023. The group also noted that, excluding exceptional items totalling S$6 million, net profit would have been S$11.8 million, a significant improvement from S$6.3 million before exceptional items in FY2023.
Director transactions
The five trading sessions spanning Apr 17 to 24 saw close to 70 director interests and substantial shareholdings filed for more than 30 primary-listed stocks. Directors or CEOs filed 16 acquisitions, and no disposals, while substantial shareholders filed four acquisitions and four disposals. This included director or CEO acquisitions in Accrelist : QZG 0%, Audience Analytics : 1AZ 0%, ESR-Reit, Ho Bee Land : H13 +1.12%, Hyphens Pharma International : 1J5 0%, MindChamps PreSchool : CNE -8.53%, OUE : LJ3 +0.53%, Sinostar PEC Holdings : C9Q 0%, Southern Alliance Mining : QNS 0%, Union Steel Holdings : ZB9 0%, and Valuetronics Holdings : BN2 +1.56%.
InnoTek shifts gears to AI, EVs to capture industry changes
Already in China, Thailand and Vietnam, the company is mulling a move into Malaysia
FACED with a changing disk drive industry more than 15 years ago, InnoTek &ndash previously Magnecomp, a supplier of high-precision disk drive components &ndash sold its core business to a big customer at a &ldquo good price&rdquo . It then focused on growing the &ldquo very small stamping business&rdquo that was left.
Today, the precision components manufacturer is stable but too small to be of interest to most investors, said its chairman Neal Chandaria. &ldquo We need to scale our business, and we need to enter sectors and segments which are going fast, which get investors excited.&rdquo
Among the promising new sectors it has identified are electric vehicles, and graphics processing unit (GPU) servers that are riding the artificial intelligence (AI) wave.
InnoTek used to have three business divisions &ndash automotive, office automation, and TVs and displays &ndash supported by five facilities in China.
In 2022, in the wake of the pandemic and rising geopolitical tensions, the company created an additional division that focused on new businesses. This division began manufacturing components for GPU servers, gaming machines, medical devices and ATMs.
&ldquo These are future sectors,&rdquo said Chandaria. &ldquo We felt, compared to the more traditional sectors, that these will have longer growth potential, and faster growth potential.&rdquo
The company already had the basic manufacturing expertise, he added, and worked with customers to identify the additional technical capabilities it needed.
This diversification is now bearing fruit. For the half-year to Jun 30, 2024, InnoTek reported a 30.9 per cent increase in revenue to S$121.6 million.
Chandaria said this growth was driven by projects related to GPU servers for AI applications. He added that its major customer in the segment is particularly focused on generative AI, a field that is currently booming.
These new businesses now represent about 27 per cent of InnoTek&rsquo s revenue, up from 14 per cent in the corresponding H1 of the preceding year.
Old industries, new developments
InnoTek&rsquo s legacy businesses are still big contributors to its revenue.
In H1 2024, the automotive sector contributed 33 per cent of its top line. Office automation accounted for a further 23 per cent TVs and displays, another 15 per cent and &ldquo others&rdquo , the remaining 2 per cent.
In the automotive segment, higher sales were driven by the strong EV market in China. To tap the explosive growth in this field, the company has added new capabilities, supplying battery components, including to leading Chinese battery companies.
In 2024, InnoTek also began producing parts for EV charging stations, to take advantage of the need for an ecosystem.
Some aspects of the group&rsquo s legacy automotive business are still relevant despite the rise of EVs. For instance, components for safety features are required in both EV and internal combustion engine (ICE) vehicles, Chandaria said.
Despite InnoTek&rsquo s strong revenue growth, its earnings slipped 8.3 per cent year on year to S$3.2 million in H1 FY2024.
Chandaria said ICE cars produced by foreign manufacturers have been affected by the shift towards EVs by Chinese manufacturers. Projects that would ordinarily have lifespans of five or six years are suddenly being shut down.
&ldquo Healthy order books started reducing, and so we took down various extraordinary costs to provide for the change or shift in the business.&rdquo
Business in the EV sector is tough too. &ldquo The EV business, even in China, is cut-throat, even though volumes are growing,&rdquo Chandaria said. &ldquo (There is) a lot of shakeout, a lot of companies are closing down.&rdquo
He expects business in 2025 to remain challenging, before stabilising in 2026.
Greater geographical reach
InnoTek&rsquo s reduced profitability was also partly due to costs associated with the set-up of facilities in Asean, said Chandaria.
Even before getting into new businesses, InnoTek had recognised that it would need greater diversity in its bases of production.
Following customers on their &ldquo China+1&rdquo strategies in the wake of US President Donald Trump&rsquo s first term, the company set up a facility in Thailand in 2017, followed by another in Vietnam in 2021.
In 2023, it acquired a 70 per cent stake in another Vietnamese facility.
&ldquo China is a manufacturing hub&hellip and so we do supply components from China into the region,&rdquo said Chandaria. &ldquo But I would say more and more, as customers are ramping up their production from Asean countries, they want us to produce more and more locally.&rdquo
When it comes to supply chain efficiencies, productivity or quality, China is &ldquo head and shoulders above anywhere in South-east Asia&rdquo , Chandaria said. &ldquo But obviously, because of political considerations, diversifying supply chain considerations, these new options are coming up.&rdquo
InnoTek has decided that its Chinese facilities will focus more on China, he continued, noting that there will not be too much excess capacity emerging, because domestic businesses continue to grow. It is also able to shift production as needed, based on the demand in its business divisions.
While Asean contributes only about 15 per cent of the group&rsquo s revenue, the regional footprint is becoming more important amid geopolitical uncertainties.
Getting bigger, going deeper
InnoTek is now looking to expand in Malaysia, with Chandaria noting the country&rsquo s &ldquo very good infrastructure, relatively low cost and good technical skills&rdquo .
&ldquo Many of our customers are very comfortable operating in Malaysia,&rdquo he said. &ldquo Even today, we ship into Malaysia some of our products, and some of our customers have suggested to us that maybe we should look at setting up there.&rdquo
It is also working on higher value-added offerings in its existing segments.
In its office automation segment, for instance, it has gone up the value chain into assembly operations, in order to better serve its customers.
&ldquo So they&rsquo re very much more dependent on us in that sense,&rdquo said Chandaria. While many customers previously assembled the components themselves, they are increasingly outsourcing this step, he added.
Similarly, extending from its part in building servers, InnoTek has gone into liquid cooling for data centres.
It scouted for partners and found a company that provides liquid cooling for high-speed trains across China, and has been working with it to adapt its solution for servers.
Looking ahead, Chandaria now expects consistent growth for InnoTek. &ldquo We should be certainly reaching our earlier profitability levels in the next couple of years, and growing beyond that.&rdquo
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