The provider of manufacturing services for consumer gadgets Valuetronics Holdings has been steadily buying back its own shares. The most recent transaction was on July 12 for the acquisition of 80,000 shares on the open market at 52.5 cents each. This brings the cumulative number of shares acquired under the current mandate to around 7.82 million shares, equivalent to 1.8% of its issued shares.
Before this, the company has been buying back shares every few days or so since May.
In FY2022 ended March, Valuetronics reported earnings of HK$113.5 million ($20.32 million), down 39.3% y-o-y from HK$187.1 million recorded in the preceding FY2021. Revenue was down 11.1% y-o-y to HK$2.02 billion.
The company says the poorer showing was due to the shortage of certain components because of supply chain problems, which affected the volume it could deliver.
As at March 31, Valuetronics’ net asset value was HK$3.20 or 57 cents, which is above what the company paid for its own shares. It also has no bank borrowings.
“While the components shortage and supply chain problem could last beyond 2022 and continue to affect our profit margins, we are cautiously optimistic to remain profitable for FY2023, given our track record and strong fundamentals, which is supported by our strong balance sheet,” says chairman and managing director Ricky Tse Chong Hing.
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“With our Vietnam campus now operational, we are well positioned to offer existing and new global customers a regional manufacturing footprint to meet their diversified needs,” he adds.
Deputy chairman raises stake
Eugene Wong Hin Sun, deputy non-executive chairman of Jason Marine Group, has increased his stake in the company via a series of open-market purchases.
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Wong started the purchases after he was made the board’s deputy chairman on May 31. He first bought 3,200 shares on June 24, paying $488.40 or 15.27 cents each. Wong bought again on June 27, July 6, July 7 and July 8.
Upon his July 8 transactions, Wong holds a personal direct stake of 358,100 shares, equivalent to 0.341% of the company. In addition, via Sirius Venture Capital, which he manages, Wong has a deemed stake in another 2.65 million shares or 2.524% in Jason Marine. In total, he has an interest of just over 3 million shares or 2.865%.
Wong joined Jason Marine’s board in 2009. Besides his board seat at Jason Marine, Wong is also non-executive vice-chairman of Japan Foods Holding, lead independent director of Alliance Healthcare Group and independent director of APAC Realty.
Jason Marine, which provides marine electronics systems for the marine and offshore oil & gas industries, was founded in 1976 by executive chairman and CEO Foo Chew Tuck, who controls the company with his stake of 77.43%.
The company was recently the subject of a non-rated report by analyst Lim Shu Rong of SAC Capital, who notes that the company is fielding a growing number of customers’ queries. “Higher crude prices, shipbuilding orderbook and easing of travel restrictions are tailwinds for the sector,” writes Lim on July 8.
Lim believes Jason Marine’s order intake could return to pre-pandemic levels.
In FY2022 ended March 31, Jason Marine reported revenue of $30.9 million, up 3% y-o-y. Earnings were down 23.1% y-o-y to $240,000, due to a decrease in government grants and the one-off termination payment in the FY2021.
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At current price levels, Jason Marine is trading just 0.7 times book value.
Lim also notes that the company has a “sound and healthy” balance sheet with its net cash balance of $14.7 million as at the end of March. Its net cash represents some 89% of its market cap.
