Valuetronics

Valuetronics: FY14 net profit surged 88% to HK$147.9m on revenue growth of 10% to HK$2.4b, as well as the absence of losses from its disposed licensing business. The strong top line was attributed to broad-based growth, particularly from higher demand in the industrial & commercial electronics segment (+24%). Consequently, gross margin expanded 1.2ppts to 13.4% on the change in sales mix. Group proposed final DPS of HK16¢ and special DPS of HK4¢, bringing FY14 total to HK20¢ (FY13: HK8¢). In addition, group pledged to pay out 30-50% of earnings going forward. Notably, Valuetronics has net cash of HK$477.9m, which translates to HK$1.297/share ($0.21/share). At $0.38, Valuetronics trades at 6.1x forward P/E and 8.5% dividend yield