Financial information - FY2021 (Mar 2020 - Mar 2021)
Valuetronic FY2021 report, from the table we can notice that Revenue contributed by CE drop significantly, this is due to was due to a key customer experiencing weak demand and its production switch-over from the Group’s China factory to another vendor in an ASEAN country as scheduled.
For ICE, the surge in demands in logistic industry and e-commerce benefited several key customers
during the pandemic lockdown. The prolonged pandemic also caused a delay in the schedule of a customer in the auto industry in its production switch-over from the Group’s China factory to another vendor in North America, which led to continued orders from that customer during FY2021.
Vietnam Campus
Vietnam campus will commenced by end of FY2022 (Mar 2022). It provides EMS, machining and injection molding services.
My thoughts
From previous report management team keeps highlighted revenue will drop significantly. Need to wait for next half year report to know the shifted of the company will caused how much drop in revenue. From the other EMS industry, seem like they are in ramping stage but Valuetronic is slowing down. Management unable to keep the current customer causing revenue drop.
From the report, the group revenue is contributed by 4 main customers and each contributed more than 10 percents of the revenue. This is a big risk due to depends on the main customer, the group should diversify the customer.
Let's have a brief calculation.
If revenue drop 20percents for next quarter.
2021 Revenue drop 20 percents - 2281mil x 0.8 = 1824 mil
Net profit margin - 7.5%
Net profit = 136.8mil
Ordinary shares = 435,048,782
EPS = HKD 0.31 = SGD0.053
With current price - 0.59
PE = 0.59 / 0.053 = 11.13
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