Post on 05-Jul-2020
Q1FY17 Results Briefing15 August 2016
1
2
Important Notice
This presentation contains forward-looking statements which can be identified by the context of the statement andgenerally arise when the Company is discussing its beliefs, estimates or expectations. Such statements may includecomments on industry, business or market trends, projections, forecasts, and plans and objectives of managementfor future operations and operating and financial performance, as well as any related assumptions.
Readers of this presentation should understand that these statements are not historical facts or guarantees of futureperformance but instead represent only the Company’s belief at the time the statements were made regardingfuture events, which are subject to significant risks, uncertainties and other factors, many of which are outside of theCompany’s control. Actual results and outcomes may differ materially from what is expressed or implied in suchforward-looking statements.
The Company cautions readers not to place undue reliance on any forward-looking statements included in thispresentation, which speak only as of the date made; and should any of the events anticipated by the forward-lookingstatements transpire or occur, the Company makes no assurances on what benefits, if any, the Company will derivetherefrom.
Investor Relations Contact:
Name: Mr Gerald Woon Name: Mr Andrew Nai
Email: woon@cogentcomms.com Email: andrewnai@cogentcomms.com
Tel: + 65 6704 9288
3
Corporate Profile
At a Glance
• Electronic Manufacturing Services (“EMS”) player established in 1992 in Hong Kong
• Listed on Main Board of SGX on 28 March 2007
• Production facilities in Daya Bay & Danshui Town, Guangdong, PRC (60 minutes from Shenzhen)
Integrated EMS Provider
• Engineering Design & Development
• Product Design & Deployment
• Plastic Injection Moulding
• Tool Design and Tool Fabrication
• Metal Stamping & Machining
• Printed Circuit Box Assembly & Box Build Assembly
• Supply Chain Management
Accreditations
• ISO9001:2000, TL9000, ISO14001:1996, ISO13485
& TS16949
Employees • As at 30 Jun 2016, around 4,000
Bloomberg Code VALUE.SP
Reuters Code VLUE.SI
ISIN Code BN2
Issued shares (M) 380
Mkt cap (SG$M) (12 Aug 2016) 199.09
Share price (SG cents) (12 Aug 2016) 52.5
Avg volume 3-mth ('000) 1090
52 wk range (S$) 0.35 – 0.545
25.9%
69.0%
5.1%Shareholding
Executive Directors
Public Float
HSBC GlobalInvestment Funds
4
Business Model
A Premier Design and Manufacturing Partner
Proactive deployment of Design & Development capabilities
Integrated Manufacturing Services
•SMT•Wire bonding•FG assembly•Metal part machining•Injection molding•Tool design & fabrication
Engaging in Customers Value Chain
•Design for manufacturing•Design & build test fixtures•Rapid prototyping•Regulatory compliances•Supply chain management services
Design & Development
•Mechanical & electrical engineering design from concept to mass production•Better manufacturability with enhancedfeatures & lower cost•Software development•Industrial design
Value Add
2008 2008 2009 2012 2014 2015
Became Phillips preferred supplier
for its Lighting segment
Completed Phase 1 construction of
Daya Bay Facility
Opened Daya Bay Facility, acquired medical business
Celebrated 20th
anniversary with revenue crossing
HKS2 billion
Adoption of formal dividend policy
Received TS16949 certification
1992 2002 2003 2005 2007
Headquartered in Hong Kong with manufacturing
facilities in Danshui Town PRC
Use of ROHS equipment and accredited with
TL9000
Adopted work cell management &
updated to ISO9001:2000
Became Philipspreferred supplier for its consumer lifestyle segment
Listed on SGX-Mainboard & commenced
construction for Daya Bay Facility
5
Key Milestones
6
Daya Bay Facility – Bird’s-Eye View
• Land use rights acquired in 2006 • Total site area > 110,000 sq m
• Ability to accommodate customers requirement for various volume, mix andcomplexity
• Customer base ranged from emerging enterprises in Northern American (low-volume complex custom product) to top global Multi-National Corporations(high-volume standards product)
7
Customer & Product Portfolio
Industrial & Commercial Electronics
Consumer Electronics
Industrial & Commercial Electronics
8
Transaction Printer for Slot, POS & Teller Station Machines
Thermal Label Printer for Industrial & Commercial Use
Printers Temperature Sensing Devices
Cold Chain Temperature Monitor for Industrial & Commercial Use
Electronic Thermostats
Nasdaq-listed Company Unit of a NYSE-listed MNC
Global Brand owned by NYSE-listed MNC Company owned by a UK PE Fund
9
Taiwan-listed Company
Taiwan’s No.1 Business Communications Maker
Toronto-listed Company
High Precision GPS for Industrial Use
Communication Products
Company Based in North America
Industrial & Commercial Electronics
10
Others
In-vitro Diagnostic Medical Equipment for Testing Human Tissue samples
Electronic Products forAutomotive industry
Tier 1 Automotive System Manufacturer
Data and media connectivity module
Industrial & Commercial Electronics
Consumer Electronics
1115W and 40W Bug Zappers
Subsidiary of Homax Group(Wholly-owned by PE firm)
PCBA for Shavers & Electric Toothbrushes for Consumer Use
Consumer Lifestyle Division of a Dutch MNCListed in Amsterdam & New York
Q1FY17 Financial Highlights
12
Financial Highlights
Consumer Electronics
Industrial and Commercial Electronics
Revenue Contribution
50.9%
49.1%
Q1FY16
HK$270M
HK$280M
34.6%
65.4%
Q1FY17
HK$313M
HK$165M
HK$’M Q1FY17 Q1FY16 % Change
Revenue 477.5 550.0 (13.2)
Gross Profit 76.6 78.5 (2.4)
Gross Profit Margin
16.0% 14.3% 1.7pts
Net Profit for the period
29.6 33.5 (11.6)
Net Profit Margin 6.2% 6.1% 0.1pts
Revenue Trend
14
1,683.6 1,581.4 1,653.3 1,473.0
824.6
280.2165.0
604.7628.8
780.0956.3
1,128.3
269.8312.5
-
500.0
1,000.0
1,500.0
2,000.0
2,500.0
FY12 FY13 FY14 FY15 FY16 Q1FY16 Q1FY17
Consumer Electronics Industrial & Commercial Electronics
2,429.3
550.0
HK$’ M
2,288.3 2,210.2
2,433.3
1,952.9
477.5
15
Quarterly Revenue
383.9 402.4361.2 325.5
280.2239.0
141.0 164.4 165.0
242.7 225.2235
253.4269.8
287.5
293.5 277.5312.5
0
100
200
300
400
500
600
700
Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17
Consumer Electronics Industrial & Commercial Electronics
578.9626.6 627.6
596.2
550.0526.5
434.5 441.9
477.5
HK$’ M
53.9% 54.2% 51.8%
34.3% 37.3% 41.1%
11.8% 8.5% 7.1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FY15 FY16 Q1FY17
Europe
China & AsiaPacific
NorthAmerica
16
Revenue by Shipment Destination
17
Gross Profit & Net Profit Trend
80.3 82 83.785.4
78.5 77.070.5 71.5 76.6
33.9 36.3 39.2
39.8
33.5 32.2
25.229.5 29.6
12.8% 13.1%
14.0%14.8%
14.3%14.6%
16.2% 16.2% 16.0%
5.4% 5.8%
6.6% 6.9%
6.1% 6.1%5.8%
6.7% 6.2%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
0
10
20
30
40
50
60
70
80
90
Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17
Gross Profit Net Profit GP% Net Profit Margin
37
0.3 4
76
.2 56
8.4
59
2.2
72
6.6 80
8.5
85
7.3
88
8.3
32
2.2
50
0.5
51
1.4
47
9.3
74
0.3
99
2.7
98
1.7 1
12
6.7
13
9.9
98
.2 24
3.7
22
1.6
47
7.9
50
5.8
68
9.3
74
4.9
0
200
400
600
800
1000
1200
FY10 FY11 FY12 FY13 FY14 FY15 FY16 Q1FY17NAV Market Cap Net Cash balance
18
Market Capitalisation & Net Cash Balance
HK’M
Earnings Per Share & Dividends Per Share
19
25
.5
15
.0 16
.7
34
.2
36
.5
21
.9
40
.6
40
.0
31
.9
7.8
4.5
7.0 14
.0
17
.0
8.0
20
.0
20
.0
20
.0
6.1%
11.8%
7.7%
9.8%
11.9%
6.0%
9.8%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
EPS Dividend per share Dividend Yield
7.5% 7.7%
We are committed to formal dividend policy of 30-50% payout ratio
HK cents
SharePrice
S$0.230 S$0.075 S$0.165 S$0.235 S$0.230 S$0.205 S$0.330 S$0.47 S$0.45
DividendPayout
30.1% 30.0% 41.9% 40.9% 46.6% 36.5% 49.3% 50.0% 63.0%
20
Summary of Cash Flows
HK$’000 Q1FY17 Q1FY16
Operating Activities
Net cash generated from operating activities 47,565 59,379
Investing Activities
Net cash generated from/(used in) investing activities 8,326 (30,704)
Net increase in cash and cash equivalents 55,891 28,675
Effect of foreign exchange rate changes (212) (146)
Cash and Cash equivalents
At beginning of the period 689,260 505,847
At end of the period 744,939 534,376
Balance Sheet & Key Ratios
21
HK$’M Q1FY17 FY16
Working capital
Inventories 249.9 198.7
Trade Receivables 376.9 343.2
Trade Payables (366.7) (286.2)
260.1 255.7
Net Current Assets 652.0 605.5
Net Cash 744.9 689.3
Net Assets 888.3 857.3
Turnover Days Q1FY17 FY16
Inventory 56.9 43.8
Trade Receivables 76.9 64.1
Trade Payables (83.5) (63.1)
50.3 44.8
Key Financial Ratios
22
# Share price as at respective period end date
SGD/HKD Ex rate: Q1 FY17: 5.76Q4 FY16: 5.74Q1 FY16: 5.75
Q1FY17 FY16
Price (SGD) # 0.52 0.45
NAV per share (SGD) 0.41 0.39
Cash per share (SGD) 0.34 0.32
Cash to Mkt Cap ratio 66% 70%
Q1FY17 FY16
Current ratio 1.9 1.9
ROE 13.3% 14.0%
ROA 7.2% 8.0%
PB ratio 1.26 1.14
Business Outlook
• Continued sustainable double digit growth with new revenue streamfrom auto
• Will further pursue opportunities by providing enhanced value withour design and development capabilities
Overview
• Phased out and exited from mass market LED light bulb business since third quarter of FY2016
• Revenue from CE stabilizing at between HK$140 million to HK$165 million per quarter since second half of FY2016
• CE segment now comprises predominantly products with customized consumer applications for a portfolio of customers.
Consumer Electronics
23
Industrial & Commercial Electronics
• Continued to benefit from the widened customer base in the ICE
• Significant growth in ICE segment has mitigated decline in CE revenue
• GP% improved with increased weightage in ICE segment
• Well positioned to take advantage of a widened product portfolio andopportunities in the pipeline
• However operating in an uncertain macro-economic environment, incommon with most manufacturers
• Remain mindful of the impact on overall business which may resultfrom a stronger US dollar and a further slowdown in China’s economy
Macro Economic
Environment