Following the release of Trek 2000 International's 3Q17 results, its CEO bought 800,000 shares of the company for $215,440 last Thursday (9 Nov), according to a filing on the SGX.
Henn Tan, who is CEO and executive chairman of Trek, now holds 101,597,591 shares, or a 31.46% stake. He last bought Trek shares in Sept 2015: 42,000 shares at nearly 31 cents apiece. He is the N0.1 shareholder, followed by Toshiba Corporation (16.32%) and Osim International (8.79%). No.4: Creative Technology (8.52%). |
Trek --inventor and patent owner of the ThumbDrive™ and Flucard® -- has just reported a 24.0% rise in net profit to US$2.2 million for 3Q2017.
9M17 net profit adds up to US$5.5 million, up 53% y-o-y.
And what a gusher of cash its asset-light business continued to deliver: Operating cash flow totalled US$5.5 million in 3Q17 and US$12.3 million in 9M17.
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Stock price |
28.5 c |
|
52-week range |
21 – 29 c |
|
PE (ttm) |
8.5 |
|
Market cap |
S$92 m |
|
Shares outstanding |
323 m |
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Dividend |
-- |
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Source: Bloomberg |
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In addition to its continued business strength, Trek has a net cash position of US$33.6 million and US$16.5 million worth of quoted investments.
There is a case to be made that the stock is undervalued:
♦ The net cash and quoted investments total S$68 million, accounting for approximtely 74% of Trek's market cap of S$92 million (based on share price of 28.5 cents).
♦ In the last 4 quarters, Trek's aggregate net profit was US$7 million (S$9.5 million). This includes a 1Q17 provision for sales commission (US$0.5 million) and loss from the disposal of its 19% stake in Racer Group (US$1.3 million).
Thus, the implied valuation of Trek's business is 2.5X PE merely.
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Trek's asset-light business model generates nice operating cashflows, especially since 2015 (US$8.4 million). Here's how much flowed into the company in the last 4 quarters and the corresponding periods:
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For the 3Q17 results, click here.
