Integrated EMS provider
? Valuetronics is an integrated EMS provider with D&D capability. The company
was established in 1992 and listed on the SGX Mainboard in 2007.
? In its results statement, management commented that they were cautiously
optimistic of remaining profitable for FY23.
? Based on the closing price of S$0.525 on 27 May 2022, Valuetronics is
trading a historical FY22 P/E/P/BV of 11.5x/0.94x.
EMS provider with D&D capability
Established in 1992 and headquartered in Hong Kong, Valuetronics was listed on the SGX
Mainboard in 2007. The company is an integrated electronics manufacturing services
(EMS) company with two business segments, consumer electronics (CE) products and
industrial and commercial electronics (ICE) products. Some of the products manufactured
by Valuetronics include smart lighting products, printers, temperature sensing devices,
communication products, automotive products and medical equipment. The company also
offers design and development (D&D) capabilities. Its production facility is located in
Huizhou City, Guandong, in China (110,000 square metre site). The company has also
started production at its new 52,541 square metre plant located in Binh Xuyen District, Vinh
Phuc Province, Vietnam.
FY3/22 financial performance
Valuetronics’s FY22 revenue fell 11.1% yoy to HK$2.0bn while net profit fell 39.3% yoy to
HK$113.5m (results released on 26 May 2022). Gross profit margin/net profit margin fell
3.3% pts/2.6% pts yoy to 13.6%/5.6%. Management attributed the margin decline to the
shortages of electronic components, which affected its ability to meet orders, and frequent
delivery delinquency and consequent productivity losses. In its results statement,
management also noted that the ongoing Covid-19 pandemic and lockdowns in major cities
disrupted the capacity and logistics of the electronic component industry, compounding the
situation.
Management’s outlook for FY23
Management expects Valuetronics to remain profitable in FY23 but believes components
shortages and inflationary cost pressure will exert a negative impact on its gross profit
margin. In its results statement (posted to SGX), management also highlighted that the
revenue rebound in the CE segment that was seen in FY22 is not expected to recur due to
lower customer forecasts and the components shortage problem.
Historical valuation
Based on the closing price of S$0.525 on 27 May 2022, Valuetronics is trading at a
historical FY22 P/E/P/BV of 11.5x/0.94x. Historical FY22 dividend yield is 4.65%.
Valuetronics paid dividends over FY08-22. On 25 Feb 2022, Valuetronics announced a
HK$250m share buyback programme.