OPCOM (0035): RM82million variation order from TM Berhad: Review

Recently, OPCOM announces that it has secured RM82million variation order from TM Berhad which is expiring on 19 April 2013. In other words, the period of this contract is around four quarters or approximate to one year.

Based on previous four consecutive quarters' revenues and profits:
2011 Q3: R = RM33M,   PAT=RM4.4M, EPS = 3.42sen
2011 Q2: R = RM22.6M PAT=RM3.8M, EPS = 2.92sen
2011 Q1: R = RM33M    PAT=RM5.4M, EPS = 4.21sen
2010 Q4: R = RM34.2M PAT=RM4.8M, EPS = 3.73sen

(note: R = revenue, PAT = Profits after Tax, EPS = Earning per share, Q = quarter;)

OPCOM (0035) Q3 2012: Quarterly Review - Slower Cables Take Up But More Supply of Materials for Cables Manufacturing

Income Statement:
Revenue dropped slightly.
Variable cost increased slightly.
Q3 2011 EPS: 3.42 sen
Total Three quarter: 10.59sen

Balance Sheet:
Inventories and Receivable maintains as previous level.
Cash amount reduced due to special dividend.
Borrowing Status: Zero Borrowing

Cash flow statement:
Maintain a very low CAPEX
Paid back some payable.

OPCOM HOLDINGS BHD (OPCOM, 0035) Q3 Quarter Report 2011: So Far So Good.

Personally, I quite like OPCOM business even using the special dividend I received from OPCOM to top up some more OPCOM shares to enjoy the grow of its future earning. Although this Q3 report is relatively less attractive compared to preceding year's corresponding quarter and preceding quarter, OPCOM still maintain its attractive areas (Zero borrowing, low CAPEX, Strong Cash flow, lots of Cash).

Let's take a look at what OPCOM comments from its Q3 report:
Review of Performance
The Group registered revenue of RM22.6 million and profit before tax of RM6.7 million in current quarter as compared to revenue and profit before tax of RM34.5 million and RM9.3 million respectively in the preceding year's corresponding quarter. The sales of the Group's products was affected by the festive season which resulted in lower revenue contribution in current quarter. However, profit before tax margin for the current quarter was higher as there was relatively more sales of higher margin products.

OPCOM HOLDINGS BHD (0035): Mini Review

I bought OPCOM at market price of RM0.805 last month (August 2011). The reasons for me to buy OPCOM simply because it has stable earnings (extension two-year contact with TM), strong internal cash flow generation, zero borrowing and no bad dividend.

Moreover, with the market price of RM0.805 to buy OPCOM, which contained RM0.56 cash per share, is equivalent to I only bought it with RM0.245 per cash. With expected EPS of 16sen annually, I will get back 100% investment capital within two years. Therefore, I believe that is the main reason why I was braved enought to enter the market during the period when bear market news were everywhere in the market.