• erelation
  • Visitor
  • Visitor
21 Jul 2012 23:01 #10027 by erelation
Replied by erelation on topic Techcomp
Hi Tanya,
There are other cost that you haven't factor in....
1) Brokerage Fee at HK side.
2) Exchange Rate Risk
The exchange rate movement for HK vs S$ can be deadly..... it can significantly increase your profit or causes the transaction to run into losses. Take a look at the past 1 year movement of HK/S$
The exchange rate ranges from 5.9 to 6.49...
In my opinion, 5,000 shares may not worth the trouble as during the transfer period of 6 - 8 weeks, we are basically out of the market. Can't sell if the price shoot up. I am more concern on the forex movement.

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  • Visitor
  • Visitor
27 Jul 2012 01:28 #10086 by
Replied by on topic Techcomp

Techcomp (1298 HK)           Not Rated

Price/Target: HK$2.98/-  Mkt Cap: SG$100.0m          Daily: Vol 0.259m         1-Yr Hi/Lo: HK$3.20/2.06

Company visit takeaways
Analyst: Carol Dou                Tel: (8621) 5404 7225 ext.811

What’s New
We visit Techcomp Holdings last week. Here are the key takeaways.

Revenue grew at 21.0% CAGR in 2002-11. The total revenue reached USD154.1m in 2011, of which distribution and manufacturing business contributed about 68.8% and 31.2% of the total revenue respectively. About 67.9% of the revenue from distribution business was related to Hitachi High-Technologies in 2011. Its largest market, China, brought approximately 77% of the total revenue for the company in 2011. The company expects the total revenue will continue to grow at about 20% CAGR in the next few years driven by the strong growth in China, on rising concern over food safety, as well as government support and increasing investment in the science and technology, and R&D. This is highly achievable based on our industry check.

Net profit margin expected to improve to reasonable level in 2012. Given a relatively high entry barrier, the company has been able to retain a steady gross margin of about 30% in the past few years. Impacted by the IPO related expenses, the net margin stood at 5.4% in 2011, decreased significantly from 8.0% in 2010. The management expects the net margin will return to about 8% level in 2012, hence, the net earnings may increase significantly by over 60% yoy in 2012.

Growth strategies: a) Continue to growth through M&As and strategic alliances. b) Continue to expand distribution network in Asia and Europe; c) Integrating its newly acquired business; and d) Widening product offerings in Europe etc.

Net gearing and operating cash flow: Techcomp has a net debt position of USD21.2m at the end of 2011 (net gearing 33.6%), increased substantially from USD4.3m a year earlier. The Accounts receivable days is also increased from 123 days in 2010 to 156 days in 2011. Operating cash flow deteriorated from USD6.3m in 2010 to USD-13.8m in 2011. According to the management, the company expects to finance its future M&As and expansion activities with cash and bank borrowings. We therefore expect the debt level may continue to increase.

Valuation / recommendation.
Based on consensus EPS 2012 estimates of USD 0.055, Techcom’s HK shares are currently trading at 7x 2012PE, considerably low compared to its scientific equipment peers listed in US (about 16x 2012PE). At present, the HK shares are trading at a premium (about 12.7%) to its Singapore shares.

Risks and concerns: a) Universities and government R&D centers in China are the major customers of Techcomp; given the limited client base, competition between Techcomp and foreign brands are intensifying. b) Rely heavily on the business partnership with Hitachi High-Technologies. c)Newly acquired European business unlikely to turn profitable in the short-term given the weak economic condition of the European market. d) Risks concerning future acquisitions and new product launches. e) Possibility of continued weakening of the operating cash flow.

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  • Morpheous
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27 Jul 2012 23:54 #10095 by Morpheous
Replied by Morpheous on topic Techcomp
Techcomp is trading at HK 3.18 in Hong Kong with over 400,000 shares traded.
In Singapore, there is no trading with sellers at 44 cents (HK 2.64)

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  • Morpheous
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27 Jul 2012 23:55 #10096 by Morpheous
Replied by Morpheous on topic Techcomp
Take at 44.5 cents already.
Don't care so much liao

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28 Jul 2012 00:13 #10097 by Morpheus
Replied by Morpheus on topic Techcomp
Share price closed HKD 3.29 equivalent to SGD 54.8 cents. A 20% premium compared to SG share price.

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  • Yanhe
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  • Visitor
08 Aug 2012 04:39 #10239 by Yanhe
Replied by Yanhe on topic Techcomp
Today Techcomp closed at HKD3.11, equiv to 51.8 SG cents.
Volume: 428,000

In SG, Techcomp closed at 44.5 SG cents. Well, well. Arbitrage is poss.

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