Valuetronics
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Biz Times june 26..Valuetronics to expand
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Any three year old kid will reason this way. Don' t know how a professional brokerage cld have come up with such an incredible flaw, aggravated manifold by the assigning of a zero value to that particular part of the coy' s business. Personally, I' m quite suspicious abt it and how the share price has reacted so drastically.
vicloo ( Date: 15-Oct-2014 16:45) Posted:
Wednesday, October 15, 2014
Valuetronics - Phillip Securities Research Team Response To Recent
1) Will the major electronics company spinning off the lighting segment mean Valuetronics will ?lose their business??
A: Unlikely. The fact is that Phillips is separating their lighting business into a new legal entity. This type of move is common. Separating different margin segments means better overall valuations for their different segments, and segments are more independent in their strategic directions. Valuetronics management has not been impacted by this announcement to date, and have still been operating as usual. Even if Phillips is going to sell off their division on the open market, it also does not mean Valuetronics will lose their business since Valuetronics is a preferred supplier and the main manufacturer of certain LED light bulb types. Who else can make those specific bulb
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Another ding dong day tomorrow
Wednesday, October 15, 2014
Valuetronics - Phillip Securities Research Team Response To Recent
1) Will the major electronics company spinning off the lighting segment mean Valuetronics will ?lose their business??
A: Unlikely. The fact is that Phillips is separating their lighting business into a new legal entity. This type of move is common. Separating different margin segments means better overall valuations for their different segments, and segments are more independent in their strategic directions. Valuetronics management has not been impacted by this announcement to date, and have still been operating as usual. Even if Phillips is going to sell off their division on the open market, it also does not mean Valuetronics will lose their business since Valuetronics is a preferred supplier and the main manufacturer of certain LED light bulb types. Who else can make those specific bulb
(Part1)
Seems that some people in this forum do not know what manners are. Nobody says that you have to agree it's just a matter of opinion. To use words like bitch only reflects badly on the person. I am aware that this forum can be unruly.
Information is powerful (Sadly, a lot of buy recommendations before this Kim Eng news yesterday). It influence people's emotion and can turn the market direction, at least in the short term.
Longer term, fundamental still rule.
Valuetronics - Phillip Securities Research Team Response To Recent Sell-Down
(google for link - haven' t problems posting up links for some reason)
No....retailers need to educate themselves and read and use their brains to make educated trades...not just have knee jerk reactions.
Is there a reason i can' t see your profile ryanpro88? Did you only sign up today to bitch?
ryanpro88 ( Date: 15-Oct-2014 15:27) Posted:
| If what you mention is true, that's the reason retail investors avoid SGX. They are not protected. If muddy waters can issue Olam sell without merits and get away with it. other broking houses are do likewise. |
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If what you mention is true, that's the reason retail investors avoid SGX. They are not protected. If muddy waters can issue Olam sell without merits and get away with it. other broking houses are do likewise.
Haha, anyway good luck to your dealing with SIAS. Though I really doubt so they would do anything to Maybank.
ryanpro88 ( Date: 15-Oct-2014 15:14) Posted:
| Like I mention, if analysts published unfavourable reports they need to justify by fundermental figures. In this case the analyst projected good fundermentals only to contradict himself by issuing a very low sell call. His reason is the opinion industry unlikely to do well. That's hypothetical. Wonder what kind of analysis is this. He really need to answer to the public. |
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Like I mention, if analysts published unfavourable reports they need to justify by fundermental figures. In this case the analyst projected good fundermentals only to contradict himself by issuing a very low sell call. His reason is the opinion industry unlikely to do well. That's hypothetical. Wonder what kind of analysis is this. He really need to answer to the public.
Rosesyrup posted a similar report 3 months before Maybank did so today.
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Facing uncertain future
 Philips plans to break up the company into 2 segments - Lighting Solutions and HealthTech (combining Healthcare and Consumer Lifestyle divisions).Valuetronics faces an uncertain future as its largest customer &ndash a Dutch lighting, consumer electronics and healthcare conglomerate - has decided to split its lighting business from the rest of its businesses, in order to focus on higher-margin, less-challenging segments. Lighting, in particular LED lighting, accounts for 40% of Valuetronics&rsquo s revenue and 30% of its gross profit.
Lighting business dimming
Premium LED lighting brands are being undercut by cheaper Chinese products. Valuetronics&rsquo s customer has had to cut its prices as it repositions its brand in the consumer mass market.
Valuetronics&rsquo s margins in 1QFY15E were affected by the price cuts. Despite its customer&rsquo s split, the worst still lies ahead, in our view. We expect Valuetronics&rsquo s profits to decline in the next two years.
Industrial not yet ready to compensate
With the slump in lighting, Valuetronics&rsquo s Industrial business will have to shoulder the burden of growth. However, we do not think Industrial&rsquo s growth will be enough to offset the decline in the lighting-heavy Consumer Electronics division. Some 60% of Valuetronics&rsquo s revenue comes from lighting products for its Dutch customer.
SELL with SGD0.25 TP (4.4x FY16E P/E)
Valuetronics trades at 7.0x FY16E P/E vs a sector average of 9.9x. However, with major uncertainties ahead, we believe it is likely to underperform. Our TP assigns zero value to its lighting business and 6-4x P/E to its Industrial and non-lighting businesses, or 60-40% of its peer averages. Overall, we value the group at 4.4x P/E.
Worst case scenario could be much worse
Valuetronics is currently a cash-rich company. It had zero debt as at end-1QFY15. Its cash position of HKD441m amounts to 48% of its market cap. With no big capex plans and only HKD40-50m in maintenance capex pa, we would expect further cash accumulation in FY3/15E-17E, if the current major uncertainty that it is facing with its biggest customer does not loom ominously ahead.
However, the worst case scenario could be much worse than our current forecasts. There is a risk that Valuetronics may have to use its cash to support its customer&rsquo s mass-consumer, low-priced strategy. The customer could require it to commit more working capital to increase production and locate finished goods close to its distribution channels. Valuetronics, however, may not be able to book revenue from its increased production until this customer pulls stock from its warehouses.
We have seen this happen before at other companies but have not yet captured the downside risk in our current forecasts for Valuetronics. Still, we caution that such a strategy is a very real possibility for its customer, as LED bulbs are homogeneous products with a long shelf life.
Recent story: REX target $1.27 VALUETRONICS attractive at 3.3X PE
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Comments
0 CHE 2014-10-15 09:11
Arthur Cheong say: I think it' s far-fetched and unjustified because Philips which is the main customer of their consumer electronics division cannot anyhow discontinue their suppliers as they are bounded by contract. Even if they want to discontinue, this would be next year.
Further more, Philips is spinning off the consumer electronics department, it doesn' t mean they are going to change the products or discontinue the entire business, and although there are margins pressure from chinese manufacturer, valuetronics is also a China based manufacturer. The dividend yield is close to 10% now and I think it' s a safe price to enter.
The only hope next Q results... if the actual profit remain high... it will proof the analyst wrong by facts
Shock321 ( Date: 15-Oct-2014 14:51) Posted:
lol, you never do homework. Lose money then blame analyst report.
ryanpro88 ( Date: 15-Oct-2014 14:43) Posted:
| Obviously looking at the report, the analyst projected ROE > 15% until FY 17. Yet he gave a sell call of almost 40% off the value. Seems like he's not local and unfamiliar with market here. It's just illogical and defy fundamentals. Shocking to see a broking house with such twisted report. Very sinister indeed. Already reported the issue to SIAS who said it will investigate. |
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test
You must be opportunist I guess. My holdings very little only bought below 0.35. Just its bad for investors.
lol, you never do homework. Lose money then blame analyst report.
ryanpro88 ( Date: 15-Oct-2014 14:43) Posted:
| Obviously looking at the report, the analyst projected ROE > 15% until FY 17. Yet he gave a sell call of almost 40% off the value. Seems like he's not local and unfamiliar with market here. It's just illogical and defy fundamentals. Shocking to see a broking house with such twisted report. Very sinister indeed. Already reported the issue to SIAS who said it will investigate. |
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Obviously looking at the report, the analyst projected ROE > 15% until FY 17. Yet he gave a sell call of almost 40% off the value. Seems like he's not local and unfamiliar with market here. It's just illogical and defy fundamentals. Shocking to see a broking house with such twisted report. Very sinister indeed. Already reported the issue to SIAS who said it will investigate.
Instead of waiting for dividend, someone already made 10%.
Valuetronics vs Cheaptronics
And the winner is ...........
Technical rebound around the corner. Run when you can.
