Wednesday, May 25, 2011


Valuetronics: the ODM and OEM electronics mnftr reported a strong set of results with record high full year revenue and net profit of HK$310m and HK$121m rptvly.
For 4QFYMar11, net profit rose 28% yoy, but fell 11% yoy mainly due to upfront cost incurred for its new licensing business segment.
Turnover was up 73% yoy to HK$531.8m, as a result of a jump in sales orders from major customers, and the launch of new products…

Valuetronics' licensing business, which started in Apr 2010, achieved sales of HK$17.7m in the quarter, mainly from its portable air purifier products. In Sep 2010, the group further secured the rights to mnft, design and distribute 2 additional home comfort appliances, electric fan and heaters. Mgt expects the enlarged portfolio to improve the marginal returns of its licensing business in financial year 2012…

Mgt sees challenges in inflation, rising min wage in PRC and FX fluctuations, but expects to remain profitable goitn forward.
Co declared a first and final div of HK 14cts, double last yr’s. This translates to a yield of 9.2%, one of the highest among SGX stocks…

Stock trades at 1.1x P/B, on 29% ROE. Its P/E of 4.5x is lower than than peers, CEI Contract Manufacturing (8x), Hi-P (9.7x) Venture (12.5x).
CIMB maintains Buy with $0.52 TP

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