Valuetronics

Valuetronics: PhillipCapital initiated with a Trading Buy and $0.43 TP, implying a potential upside of 28%. Established in 1992 and headquartered in Hong Kong, Valuetronics has grown through the years to become more than an integrated EMS provider with principal business segments ranging from Consumer Electronics Products (“CE”) to Industrial and Commercial Electronics products (“ICE”). Today, they pride themselves as a premier design, manufacturing partner for the world’s leading brands in the consumer, industrial and commercial electronics sectors, which span across a wide geographical region that covers America, Europe and Asia Pacific. Investment merits include: 1. Trading at attractive values with net cash accounting for 53% of market cap, a conservatively estimated idle cash of 26% of market cap. P/E of 5.5x, PE ex idle cash of 4.0x; 2. Company shows ability to maintain revenue and bottom line growth in their continuing operations ex loss making licensing business segment; 3. LED lighting for general lighting burgeoning at a value sweet spot - mid expansion phase amidst falling prices.