METech

METech is venturing into the electronic equipment repair business via a strategic partnership with R-Logic International, where the venture will diversify METech’s business away from precious metal recovery and ferrous and non-ferrous metal recycling. This initiative will strengthen the group’s 4R Strategy of Recycle, Recover, Reuse and Repair. METech counts itself as a global player in the recycling and reuse business, and provides comprehensive electronic waste management solutions that include recycling of electronic and electrical equipment, as well as recovery of precious metal for enterprises, manufacturers and local communities. Meanwhile, partner R-Logic has been in the reverse logistics business since 1999, and delivers end-to-end reverse logistics solutions to its customers, many of whom are global OEMs such as HP and Dell. Additionally, R-Logic has the capability to undertake in-depth repairs of electronic equipment like ATMs, motherboards and LCD displays etc. METECh guides that the long-term prospect for the repair, reuse and recycling business is good, due to growing regulations to reduce and/or recycle waste, a growing sense to protect the environment and the growing acceptance that the world’s natural resources are not infinite. The group is guiding for exponential growth from this venture and sees synergy in the partnership as the expertise of both partners in the JV are complementary, with aims to leverage upon their international networks to become truly global players. In its recent FY14 results, METech saw net profit slump 94% to $0.1m on revenue of $39.8m (+35.8%), although bottom-line was weighed by a drop in gross margin to 16.9% from 22.8% due to the lower yield rate of precious metals recovery from processed electronic waste and higher labour overheads. Bottom-line was further weighed by a 28.9% rise in admin expenses to $5.6m. METech currently trades at 1.2x P/B.