2015年7月19日星期日

6963 VS

今天是马来新年的第三天,祝马来朋友新年快乐和 Selamat Hari Raya。这几天因为对今年暴增的VS Industry 产生兴趣所以对此做了以下功课。VS是间电子业专制造服务(EMS,Electronic Manufacturing Services),EMS就是一个全线的服务,这包括产品开发、产品生产,这当然包括产品的採购、产品的品质管理及运输物流。另外VS的主要客户是KeurigDysonZodiac,看来公司的未来发展可以被期待了。以下是VS的功课:


Company Overview
·         VS ranked world's top global Electronic Manufacturing Service (EMS) providers for world-reowned office and household appliance manufacturers since year 2007 till today.
·         Dividend is given in every quarter result.
·         Main business activities comprise investment holding and the manufacturing, assembling and sale of electronic and electrical products and plastic moulded components and parts.

Personal Comment
·         VS's capital able to bonus issue for 2 to every 1 ordinary share.
·         Average free cash flow yield is 4% along latest five years is not satisfied but CY in year 2012 to 2014 is attractive.
·         Year 2014 is the year for VS to surge its revenue and net profit. Q3''2015 has a cumulative revenue and profit with growth rate of 141% and 49% respectively.
·         Profit margin of VS is low. Larger revenue but low net profit. So cost of goods sold is important to identify the earning power of VS.
·         Latest borrowing per share is RM 2.05 while cash per share is RM 0.96 so result net debt per share with RM 1.09. Unhealthy cash company.
·         From NTA view, VS is undervaluing seriously in past record but current price surpass over the current NTA.
·         Trailing PE (Taking EPS for latest 12 months in current price) is 8.79. This matches my criteria to pick stock.
·         DY is attractive in last year. It is higher than fixed deposit rate in bank.
·         Accounting based earning valuation model giving intrinsic value with RM 5.21.
·         Discounted cash flow model give intrinsic value with RM 4.98.
·         Few of useful information disclose by VS in Annual Report.

Additional Information
·         Consolidation of China-based company - V.S. International Group Limited (VSIG) is the main reason of excellent revenue in year 2014.
·         VS expand scope of services in Indonesian operation by adding plastic injection capabilities.
·         Latest treasury shares are 1,149,336.
·         Proposed every 1 shares split to 5 shares with announcement on 14/7/2015 and specific Proposals expected completed by Q3''2015 or made within one month.

 

·         Picture above clearly bring us the image of high increase earning power on U.S, Europe and China but AR2014 don't show the PBT in US and Europe.
·         Even VS get high revenue in every quarter but business activity in Indonesia and China still not stable due to negative PBT sometimes will obtained in quarter result.
·         Non-current asset just present in three countries, there are China (49%), Malaysia (41%) and Indonesia (9%). Left 1% is other category.
·         Revenue based on category of business activities segment is not provided in Annual Report.
·         VS focus their market on Malaysia, Indonesia and China.
·         Operation in Indonesia moved to new factory in May 2015.
·         Top two substantial shareholders who are Executive Chairman and Executive Director are disposing many shares in year 2015.
·         Lot of local and foreign fund listed in top 30 list shareholders.
·         Koon Yew Yin's sharing about VS -  LINK
·         RHB-OSK target price with RM 4.50 at 2/4/2015 - LINK
·         VS expand its business opportunity on coffee industry.

·         Surprising result of PBT in every quarter of year 2015.
·         All the quarter result in year 2015 explained mainly attributable to higher sales and better sales mix contributed by the Malaysian operations.

Questions
1.    Reason of financing cash flow reflect positive since year 2013.
2.    Is it VS proceed large amount of loan aimed to pay off the dividend to its shareholder.
3.    Price of VS after split activity.
4.    Financial ratio that will affected after split activity.

Answers
1.    Year 2013 is mainly due to long term borrowing with amount RM 40 million while 2014 is due to short term borrowing with large amount RM 62 million.
2.    No. Dividend last year accounted to RM 9 million, it just around 2% of total borrowing. So loan is mainly for expansion of business.
3.    Current price will expect become RM 1.05.
4.    EPS, NTA, PE, DY and CY will be affected.


本文只供参考。共勉之。

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