Re:market correction... by MacGyver30th, Jul. 04:11 PM Market is bullish again.. Good trading period from now to early-m...
Re:Map Technology - ... by happin30th, Jul. 03:16 PM MAP is now at 6 cents. Noticed that yesterday's last trade was 1...
Re:Rokko-An Explosiv... by neontet30th, Jul. 07:41 AM all these semicon companies are doing really well.
congrats on s...
market correction by pathfinder30th, Jul. 12:10 AM With all US company result good news ending in 2 weeks time & no ...
Re:Rokko-An Explosiv... by MOSBY29th, Jul. 11:49 PM http://www.remisiers.org/research//dailyex2307.pdf
TP :$0.30...
SERIAL SYSTEM: Fair value is 14 c, says NRA Capital
Written by Jacky Lee (NRA Capital)
Monday, 08 March 2010
Above expectations. 2H09 net profit of S$6.3 m came in 9% above our profit expectation of S$5.8m. The key variances were better-than-expected sales and lower-than-expected effective tax rate. However, this was slightly offset by lower-than-expected gross margins.
Sales jumped 30% yoy and 43% qoq in 2H09 due to stronger demand forelectronics products in Asian markets, especially China and Korea. Lower sales were experienced by Singapore, Thailand and Malaysia which relied heavily on export to the US and Europe where demand for electronic products were mostly affected by the economic crisis.
China accounted for 57% of the group’s total sales for FY2009 and the group now operates 23 sales offices in key cities of China.
SERIAL SYSTEM
Market cap
S$57.9 m
52-week high/low
5/8 cents
Average vol (1 year)
381,951
Shares outstanding
724.11 m
Free float
314.9 m
Gross margins slipped by 0.9% pts to 8.5% in 2H09reflecting the highly competitive nature of the electronics industry coupled with the negative effects of the financial and economic crisis.
Including the S$0.9 m forex loss and lower effective tax rate, pretax and net profits jumped 82% and 118% yoy respectively.
Net gearing remainedcomfortable. Serial System generated S$6.6 m of negative free cash flow in 2H09 due mainly to higher working capital requirement by its Hong Kong and Korean subsidiaries to finance increased volume of businesses.
Its net gearing increased from 16% as at end-June to 27%. However, cash conversion cycle was shortened by 11 days yoy to 53 days. As expected, the board declared a dividend of 0.38 cts as compared to 0.25 cts in previous years.
Source: NRA Capital.
A largest distributor for Texas Instrument (TI) in China and Korea nowafter acquiring the distribution rights for certain electronic components manufactured by Texas Instruments in China and Taiwan in May-09. Management also pointed the shortage for TI’s product in 4Q09 affected its business late last year till early this year.
However, the supply is stabilising now. We see this as a good sign for electronic component distributors as pricing will be less volatile. We also believe demand for electronic components will continue to be driven from Asia. Nevertheless, recovery from the USA and Europe market will be a bonus.
Raised forecast and maintain Buy. We have raised our FY10-11 forecast by 21% and 33% respectively. We have also introduced FY12 forecast. As such, our fair value has risen from S$0.11 to S$0.14FY10 PER. We maintain our buy recommendation.
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FION PHUA, Tee Up Marketing Enterprises (HP: 9760-5080)
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Above expectations. 