What a horrible week for the markets with all the US-China trade war, Brexit and the Huawei saga. To keep me from being depressed, I told myself to quit looking at the markets and news for the time being. And if I ever feel the need to bet, skup the market and have a go at Singapore Pools instead (I went but I didn’t win a cent by the way). Anyway, here is a look at how Powermatic Data has performed this year.
Revenue Surge 30% YOY
As expected from what we have seen in their Annual Report where the management was very bullish about their growth prospects, Powermatic Data generated a total revenue of S$ 20.954 million for FY2019, 30% higher than 2018. Despite all the uncertainty in the global economy, they managed to secure new contracts from new customers besides their repeated business.
Profit before tax grew 46% YOY at $7.72mil due to revenue increase, gain in FX and higher income from Fixed Deposits and higher dividend from their investments.
Looking at their breakdown in sales, their performance improved greatly in the second half year, where sales almost doubled. According to the report, their breakdown in regions are as follows; USA 33%, Asia 31% , Europe 22% and other regions 14%. That looks pretty healthy to me as there was no concentration of one particular region.
A dividend of $0.08 was declared, an increase of $0.01 from last year.
Net Cash per share = $1.005
Let’s do a little math here. Their EPS for 2019 was $0.20. Say we value them at a PE ratio of 8X. That equals to $1.60. Their cash holdings is $1.00 per share. Their investment property is worth about $17mil, which is $0.488 per share.
Add them up and you get $3.00. Current share price is $1.65. Yeah, let that sink in for a moment before we move on.
So You Don’t Want Made in China?
The management admitted that the ongoing trade war had a knock-on effect and will probably weaken the global expansion of the wireless connectivity business. Cost pressure and price competition among the industry players will continue to be a challenge to them. Some of their customers had also indicated that they would like to source for products made in other regions (probably China due to the tariffs).
What I’m going to tell you is probably the best part of this report. The management, hearing their concerns, wasted no time in getting a factory in Malaysia just so that they can fulfill their customers’ needs. Wow. So you don’t want Made in China? No problem, I can give you Made in South East Asia.
Increase in Revenue, Profit and Dividend. What is there not to like about their Full Year performance? I hope that their stellar performance can continue and grow together with the wireless 5G ecosystem. Moss Piglet remains vested and would probably be adding more at current prices.
To know more about Powermatic Data, here’s a link to our analysis written last month.