Valuetronics

Valuetronics: (S$0.495) FY16 results ahead; sanguine on automotive prospects
-FY16 net profit beat consensus; fell 19.3% to HK$120.4m on the back of weak LED sales. Revenue down 19.6%
-Gross margin expanded 1.6ppt to 15.2%, on higher share of higher margin industrial and commercial electronics revenue. However this was largely negated by FX losses from weaker Rmb.
- Net cash of HK$689.3m (~S$0.32/share)
- Valuetronics won a customer earler in the year to supply in-car connectivity modules. The group is sanguine to ride on increasing consumer demand to integrate their mobile devices with vehicles.
- Full year DPS of HK20¢ maintained, payout ratio of 63%.
-Trading at forward P/E of 8.2x, or ~3x ex-cash, and 8% FY16 yield