Revenue Summary:
Revenue from external customers during the 6 months ended 30/6/2011 Vs 30/6/2010:
Malaysia = RM101,367,000 (2011) Vs RM81,802,000 (2009)
China = RM5,549,000 (2011) Vs RM0 (2009)
United States = RM17,615,000 (2011) Vs RM36,245,000 (2009)
Singapore = RM11,757,000 (2011) Vs 11,270,000 (2009)
Obviously, the improvement was mainly supported by local market (Malaysia) and new market (China). As most of us know about the condition of US, the revenue from US was dropped about 48%. Luckily, this negative impact was offset by the strong Asia market.
Comments from the company in 2011Q2:
"Material Changes in the Quarterly Results Compared to the Results of the Preceding Quarter
Turnover for the quarter ended 30 June 2011 was approximately RM69.28 million, representing an increase of 3.3% as compared to the preceding quarter while the net profit of the Group increased by 16.9%. The increase in turnover and net profit is mainly due to continuous higher volume loadings from some of the Group’s key customers. The higher net profit is also caused by one-off events in quarter 1 i.e. Chinese New Year shutdown and lesser working days.
Review of Performance of the Company and its Principal Subsidiaries
The Group’s turnover and net profit for the period ended 30 June 2011 increased by 5% and 1% respectively due to slightly better volume loadings as compared to the same period last year.
Prospects
Moving forward, the Group will continue to focus on escalating up the value chain and riding on the R&D initiatives in new products?ˉ design and development. The Group will also continue to step up efforts in improving the efficiency and cost reduction measures in its Group?ˉs operations to achieve the necessary competitive edge in the market. Barring any unforeseen circumstances, the Group is optimistic of performing satisfactorily in financial year 2011." (Source: 2011Q2 report)
Income Statement Overview
Slight decreasing of profit margin was offset by the decreasing Administrative and operating expenses. This is in-line with the aim of the Group to increase its efficiency and reduce its cost measures.
Balance Sheet Overview
Cash and cash equivalents was increased to RM81million (2011Q2) compared to RM49million (2010Q2). But the current bank borrowing was increased slightly to RM7.26million (2011Q2) against to RM6.365million (2010Q2).
Cash flow Overview
Cash flow is still very strong with low CAPEX.
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Written by: Xaivier Chia
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2 comments:
Xanvier : would you mind to update your assessment on GTronic. I am interested to hear from as many sources as possible in case I miss something about the company. Thanks.
Hi bsngpg,
I try to share with you some of my insign about Gtronic.
Based on last report (Q2):
1. It is still good company with strong cash flow.
2. EPS growed was mainly due to the recovery from USA and S'pore market.
3. For me, current valuation (RM2.60++) is fair - no cheap or expensive. So it is a very difficult situation to make a decision. Because if the business can keep growing in the future, then HOLD or even BUY in is the best decision.
For current valuation, you need to catch up its quarter performance to determine whether it still can maintain/grow its EPS or not.
Note - no one can predict future, this is the risk you need to take, so the profit (or lose) you will receive.
I normally prefer to a deal with huge margin of safety (extremely undervalued). BUT, if my cash ratio is too high, then I will consider company like Gtronic in my portfolio to provide good dividend return in the long term.
All the best and happy investing.
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