Valuetronics headquartered in Hong Kong

Valuetronics is an integrated electronics manufacturing services (EMS) provider, offering a competitive and broad combination of Design, Engineering, and Manufacturing services.

It headquartered in Hong Kong, and design and engineering center and manufacturing facility are strategically located in the Guangdong Province, People's Republic of China near Shenzhen and Hong Kong.

Serve Customers in telecommunications, industrial, commercial and consumer fields.

5 Nov 2016

Aug 16

Oct 2016

Revenue rose 9% to $573.7 million. Sales from the Industrial and Commercial Electronics (ICE) increased by 8.7% to HK$312.6 million due to higher demand from some customers. Sales from the Consumer Electronics (CE) segment increased 9.2% to HK$261.1 million due to higher customer demand as well as the expansion of its product portfolio to include wireless lighting products with smart control features.

Valuetronics Holdings posted an 18.2% rise in 2Q earnings to HK$38.1 million ($6.8 million). 

Valuetronics another challenging quarter

• Estimated core PATMI falls 17.9% YoY
• Net cash position of HK$234.7m
• HOLD with lower S$0.19 FV

3QFY13 results below expectations
Valuetronics Holdings Limited (VHL) reported its 3QFY13 results which were below our expectations. Revenue from continuing operations fell 16.3% YoY to HK$508.1m, or 10.5% below our forecast. Reported PATMI dipped 22.2% YoY to HK$24.5m. Adjusting for exceptional items, we estimate core PATMI of HK$23.9m, a 17.9% YoY decline, and this fell short of our projection by 16.2%. VHL continued to incur operating losses (HK$1.1m) from its Licensing division, but this was a significant reduction from 2QFY13 (HK$31.2m) which includes HK$28.0m worth of one-off termination expenditure and impairment charges given its decision to cease operations of the division. For 9MFY13, revenue inched 1.0% higher at HK$1,731.0m, while estimated core PATMI of HK$80.5m represented a decline of 3.9%.

Slowdown in orders from some customers
VHL continued to experience a slowdown in demand from some of its Consumer Electronics (CE) customers, including its largest customer which deals with LED lighting products. However, the latter was due partly to inventory correction and a transition to more cost competitive chips used in its LED products, thus leading to softer orders for VHL in 3QFY13. There were also ASP pressures from some of its major customers, which contributed to the challenging operating conditions.

Strong financial position to weather the uncertainties
Despite its tepid 3QFY13 results, VHL managed to generate

Valuetronics dearth of near term cataylsts

Fair value S$0.20


• Hit by one-off termination expenses and provisions
• But 2QFY13 core PATMI rises 34.1% YoY
• Customers adopting conservative stance

2QFY13 core PATMI exceeded expectations
Valuetronics Holdings Limited’s (VHL) 2QFY13 revenue from continued operations (excluding its Licensing segment) was flat YoY at HK$595.5m (+0.2%), or 11.6% below our forecast. Reported PATMI plunged 88.5% YoY to HK$3.3m as VHL incurred hefty termination expenditure and provision for impairment on property, plant and equipment (PPE) from its Licensing division (announced its decision to cease operations during its 1QFY13 announcement). Adjusting for this and other exceptional items, we estimate core PATMI of HK$31.5m, a 34.1% YoY increase, and this exceeded our HK$26.2m projection. With regards to its Licensing division, VHL said that it does not expect to incur further provision for termination expenditure and impairment losses for PPE.

Moderation in growth from largest customer
Although VHL enjoyed exceptionally robust

Valuetronics Holdings total 17 HK cents dividends

Fair value S$0.315

FY12 net profit exceeded our expectations
Valuetronics Holdings Limited (VHL) reported a 36.8% YoY jump in its 4QFY12 net profit to HK$38.4m on the back of a 14.2% increase in revenue to HK$607.2m. Sequentially, revenue fell slightly by 1.6% but net profit rose 22.0%. FY12 revenue of HK$2.38b (+20.7%) was within expectations, just 0.7% ahead of our estimates. Net profit climbed 7.5% to HK$130.3m, exceeding our forecast by 8.7% due largely to lower-than-expected operating expenses and effective tax rate. But excluding forex gains and other exceptional items, we estimate that its core earnings for FY12 would instead have increased 1.4% to HK$121.6m.

Record dividends declared
A highlight of VHL’s FY12 results came from its total declared dividends of 17 HK cents (including a 1 HK cent special dividend), which was its

Valuetronics generated HK$76.1m in net operating cashflows

Fair Value S$0.31


3QFY12 earnings above expectations.
Valuetronics Holdings Limited (VHL) reported 3QFY12 earnings which exceeded our expectations. Revenue of HK$617.2m represented a 17.7% YoY increase but a 1.6% QoQ decline. Net profit was flat at HK$31.5m versus HK$31.6m in 3QFY11 but rose 9.5% QoQ. Adjusting for forex and one-off items, we estimate that core net profit for 3QFY12 would instead have declined 13.8% YoY (but increased 24.1% QoQ), and is still higher than our expectations. For 9MFY12, revenue increased 23.1% to HK$1.8b, meeting 76.6% of our full-year projections; while reported net profit declined 1.3% to HK$91.9m and formed 78.7% of our FY12 estimates.

OEM segment the main revenue driver.
VHL’s healthy revenue growth was due to a strong 24.3% YoY boost in its OEM segment and 84.5% YoY surge in its Licensing business, although the latter only formed