MI Technovation - (RM3.99)

Financial

During 2018, PBT lower than 2017 due to one-off IPO expenses incurred during the year and higher sales and marketing expenses to promote our new range of equipment. 

Business

OSAT (Outsourced semiconductor assembly and testing) BIG 4 - INARI (customer broadcom and osram), MPI and Globaltronic (optotronic)  and Unisem 

ATE (Automated testing equipment) - Vitrox (IC, battery module), Penta , MI Technovation (Customer - AST, Utech, Amco, TSMCO) and Greatech (Solar panel / module (customer - First solar), battery automation, medical tube,consumer electronic (Customer - panasonic) )

Financial Q4 2020

Net cash company. Balance sheet healthy. 

Receivable a bit risky, is 23% of total assets. Besides that, the revenue for the year is 229 millions but the receivable is 102 millions. Need to take note of this. 

Cash flow statement no issue. 

Prospects. 

My thought

Lots of ATE company in Malaysia and it is very competitive. The company trying to expand into industrial 4.0 which is the future trend. If it successful then it will be a bonus and the company will continue to grow. 

Revenue 2020 : 229,004

EPS : 0.07241

P/E = 55

ROE= 13.9

美国债卷 10 yield bond 上升。

10 yield bond rate - 

From the chart, we can see that US 10 YEAR BOND rate keep increasing. So, what's the impact to economy? Basically, the increase of 10 year bond rate possible to caused the below- 

1) Inflation - (Reflected in shares price - shares price will drop)

2) Economy growth - Gold price drop

3) Others

Recently, US government has approved 1.9 trillions stimulus package to help the economy. 

So, will 1.9 trillions causing inflation? The answer is it depends who is buying the bonds. If other government or private sector bought all the bonds, it will not causing any inflation because the total money is not increasing. Whereas, if the bonds buy from Federal Reserve System (Fed), then it will caused the inflation, FED will print money and buy the bonds and caused the total money increasing. 

In 2020, US government also issue a unlimited stimulus package and FED print the money to buy the bond and causing the amount of money increase. But due to Covid-19, these amount of money money flow is slow - 货币流通速度降慢） doesn't causing any side effects. This year, US government again approved 1.9 trillions stimulus package, and FED need to print more money to buy the bond. In year 2021, economy recovery, money flow will become normal, so it might have side effect of printing the money.   The correct way for FED in 2021, FED will need to tighten the money supply (货币供应,) but if this year FED tighten the money supply  this will cause bond rate going up and will cause economic crisis. What if this year FED didn't tighten the money supply? It will cause high inflation in the world. 

Inflation coming in year 2022 , the 1st sector affected is Tech stock. Tech stock dropped significantly when the up interest rate news coming out. The drop of interest rate will benefit to Tech stock whereas if the interest rate up, it will affect tech stock. 

NAGAGROUP - 14 Mar 2021 (HKD 10.46)

 Naga Group Financial Result

Looking at the financial highlight, we can see that Nagagroup is performing extremely well in the past few years. With opening of Naga 2 in year 2017, it boost up the revenue to 1.8billion from 531million in year 2016. In year 2019, it also declared 65.72 cents dividend. 

Year 2020 performance 

For 2020, Q1 operated as normal but Cambodia government ceased all the gaming operation starting 1 Apr 2020 and reopening on 4 July 2020. And the company operated as normal since the reopening . Company also announced HKD 16.82 dividend for year 2020. 

Despite impacted by Covid-19, company still able to generate revenue and maintain profitability. Revenue has dropped 50 percent from 1.8 bil to 878million and the profit dropped 70 percent from 571mil to 165mil. From the income statement, we can see that company didn't retrench or have any cost cutting on the employee due to administrative expenses remain the same. 

From here, we can see that the debt is still manageable. Senior notes roughly 600million deduct cash  400 millions, is roughly 200millions in debt. 

Segmentation

As usual, gaming table brought the most revenue to the company. 

Future development

1) Naga 3 - target completion is on 2025

2) Investment Project in Vladivostok , Russia  - Operate in 2022

3) Angkor Lake of Wonder (“ALOW”) - in discussion stage

My thought - 

Covid-19 will be past tense sooner or later. I guess recovery sector such as Nagacorp will be booming once all the country lifted the travel restriction. Company showing steadily growth over the year and it shows that management teams are reliable. 

Price - 10.46. 

Est EPS - HKD 0.77 (USD 0.10 = HKD0.77, 2020 USD 0.0236 and 2019 USD 0.1201)

Est P/E - 13.58 

Est Dividend - 0.5 (4.7%)

2017 - 2019 ROE >20

Once recovered, with this price is consider undervalue. 

VALUETRONIC (3 Mar 2021 - 0.61)

Segmentation

Consumer Electronics (CE) - smart LED lighting products with Internet-of-Things (“IoT”) features

Industrial and Commercial Electronics (ICE) - Automotive and Printer.

Financial - 1H2021 (Mar 2020 - Sept 2020) 

Revenue dropped 20 percents and gross profit dropped 10 percents due to Covid restriction on China. 

Consumer Electronics revenue decreased by 35.8% to HK$365mil due to reduced demand under Covid-19

Industrial and Commercial Electronics revenue decreased by 8.6% to HK$729.8 mil due to reduced demand under Covid-19.

"There was significant drop in sales to the auto customer as a result of declines in global vehicle production. Such negative impacts were partly offset by the relatively stable revenue contribution from a printer customer which benefits from e-commerce sales; and a sensing devices customer which benefits from its product’s application in logistics industry"

Balance Sheet

Trade receivable increased 51percents  from 326mil to 513mil, but trade payable also increased 48percents from 291mil to 433mil. Cash rich company with 1billions on hand. 

Cash flow statement

CFFO is good, company invested 34mil in PPE to expand their company in Vietnam. Due to tax tariff, company has moved their production to Vietnam to avoid the 25% tariff. 

Events for next reporting or next 12 months

Construction of the Group’s own Vietnam campus has started in July 2020, while the 4,000 square meters leased factory, just few miles away from the Vietnam campus, has commenced production during the period. This demonstrates the Group’s immediate solution for customers who seek to diversify their procurement chain outside China. A few of the Group’s existing customers are in different stages of production transfer from the Group’s China site to the Vietnam site. 

Meanwhile, to mitigate the increasing risk of Sino-US trade tensions, some customers in the auto industry and Consumer Electronics segment continue their planned transfer of their production for the US end-market from China to North America and ASEAN. This switch-over to other suppliers in these regions is expected to complete in FY2021. We expect the negative impact of such a switch-over to be reflected in the financial year ending 31 March 2022 (“FY2022”).  

My thought 

Shares - 435,630,837

Cash - 1billion

NAV - HKD 2.29 / shares , SGD 0.40 

Net profit margin - 8.3%

Shortage of IC, will definitely impact the company. With EV booming, the future of this stock should be looking good. Compare to competitor V.S industry, this counter seem like abit lag behind. 

 

What I've learn from failure

 Everyone makes mistake, including me. We make mistake, we learn and we overcome and not to repeat the same mistake. 

The objective of this post is to remind myself the mistake that I've made in my trading. 

Below is the trading mistake that I've made.

Myeg- Good fundamental, but highly related to politic company. In 2018, BN lose the election and PH took over, the share drop from RM 3 to RM 0.8 and I've sold the share in the lowest price!!! 

Lesson learn - Do not involve in highly related politic company and not to panic when share price drop. 

Ecoworld - Believe in leadership, low ROE and blindly believe that he will bring up the company. During that time, the Sales is triple but return is low. Share price drop from Rm1.5 to Rm0.4

Lesson learn - Instead of believe on the leader, please believe in yourself, your money and you responsible on it. No more low ROE stock!!! 

Hibiscus - Bought because of the FCPO oil at USD70, believe that it will go higher again. Low ROE company as well. 

Lesson learn - Commodity stock is hard to catch, if possible, do not play with commodity stock. Never trade with Low ROE company

Harta - Good fundamental, high ROE company. Due to pandemic, glove average selling price (ASP) goes higher. But sometimes we need to think about is it sustainable ? Bought in 12 and let go on 9, lose 4k in 1 month. 

Lesson learn - Think twice before buy, look at EMA 200 whether the candlestick above or below the EMA 200,follow the trend and never against the trend!!! Do not catch falling knife!!!  

SMG - 2017 bought this share until now, high growth stock. Change CEO and acquired more company to boost the earning. But share price keep dropping

Lesson learn - When high volume at high price, shows that the big players are leaving the market. Do not buy during this time. Low ROE and high intangible assets, please take note. Do not use 15percents to estimate the price, be reasonable with using 6%.