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Thank you for your posting of earlier today regarding Techcomp JJW,
1. Answering your question: I have remained fully vested - and I have picked up a few more lots since the prolonged and ugly decline in Techcomp's share price started 4-5 months ago. Techcomp is my worst performer (amongst 10 Singapore equity holdings) ............. and the worst by some margin. I note that today a new 52-week low of S$ 0.275 was reached (there does appear to be demand at the S$ 0.28 level, viz. today's traded volume). This share price malperformance is against a background of a generally rallying market. Not good. During some trading sessions, the highest bid price on the SGX has actually been materially higher than on the HKEX - the SGX price no longer lags the HKEX price.
We should NOT be comforted by the absence of a profitability warning disclosure or similar - this could come at any time before FY results are reported out. I am disappointed that Techcomp's management has not issued/disclosed a trading update of any kind - I would have thought this was warranted. I have also seen nothing from long-term substantial shareholder Kabouter (not that we can have any right to expect such) - I can only presume they are asking questions.
2. I share your views regarding the impact of the Sino-Japanese spat on Techcomp's share price - one thing I had underestimated is just how important "pass-thru-agency-type" sales of Japanese equipment to Chinese customers are to Techcomp. Strong rumours are that it is currently challenging to sell anything Japanese in China. A related anecdote that I picked up: Japanese airlines have said Q4 results were adversely impacted by much-reduced load factors on Japan-China routes and they have started to cut back on flight frequency.
3. I also fear that two issues I highlighted before - reference my postings of 10th March 2012 and 7th April 2012 - are regrettably coming home to roost, i.e. a) rising receivables levels and b) persistent questionmarks regarding the success of Techcomp's acquisitions. Techcomp have done nothing (so far) to indicate these concerns are unfounded. I agree 100% with all your comments on Techcomp's 9 months results - IMHO you have not gotten anything wrong.
I don't think this response helps very much. Sorry. I'll be very interested in Techcomp's Q4 and FY results.
And I'll remain vested for the time being.
1. Answering your question: I have remained fully vested - and I have picked up a few more lots since the prolonged and ugly decline in Techcomp's share price started 4-5 months ago. Techcomp is my worst performer (amongst 10 Singapore equity holdings) ............. and the worst by some margin. I note that today a new 52-week low of S$ 0.275 was reached (there does appear to be demand at the S$ 0.28 level, viz. today's traded volume). This share price malperformance is against a background of a generally rallying market. Not good. During some trading sessions, the highest bid price on the SGX has actually been materially higher than on the HKEX - the SGX price no longer lags the HKEX price.
We should NOT be comforted by the absence of a profitability warning disclosure or similar - this could come at any time before FY results are reported out. I am disappointed that Techcomp's management has not issued/disclosed a trading update of any kind - I would have thought this was warranted. I have also seen nothing from long-term substantial shareholder Kabouter (not that we can have any right to expect such) - I can only presume they are asking questions.
2. I share your views regarding the impact of the Sino-Japanese spat on Techcomp's share price - one thing I had underestimated is just how important "pass-thru-agency-type" sales of Japanese equipment to Chinese customers are to Techcomp. Strong rumours are that it is currently challenging to sell anything Japanese in China. A related anecdote that I picked up: Japanese airlines have said Q4 results were adversely impacted by much-reduced load factors on Japan-China routes and they have started to cut back on flight frequency.
3. I also fear that two issues I highlighted before - reference my postings of 10th March 2012 and 7th April 2012 - are regrettably coming home to roost, i.e. a) rising receivables levels and b) persistent questionmarks regarding the success of Techcomp's acquisitions. Techcomp have done nothing (so far) to indicate these concerns are unfounded. I agree 100% with all your comments on Techcomp's 9 months results - IMHO you have not gotten anything wrong.
I don't think this response helps very much. Sorry. I'll be very interested in Techcomp's Q4 and FY results.
And I'll remain vested for the time being.
(08-02-2013, 12:24 PM)JJW Wrote: Hi RBM,
Not sure if you are still vested in Techcomp. I must say it is quite an experience to see the share price dipping lower by the day! As I write, SG price is hovering at 28 cents now and disparity between SG listed shares and HK listed shares has all but disappeared - HK bid price @ $1.75
Going by last year results schedule, full year results should be out by end of this month and I am bracing for very bad Q4 numbers due to the Sino-Japan relations factor - as guided for by management in Q3 announcement. I am hoping that stickiness (in the sense of customers not wanting to retrain staff in new instruments) will help a bit in retaining some orders but am mindful of underestimating nationalist sentiments, plus the intense competition in China's laboratory analytical instrument market - and therefore availability of substitutes. The depreciating yen may be a saving grace but I do not see much difference this will make to the bottomline, especially if orders/sales are decreasing...
With regards to the 9 months results released back in Nov - if we add back the one-off listing expenses for FY2011, 9M FY2012 net profit is already lower than 9M FY2011 despite higher revenue. Management does not seem to be on top of the escalating expenses, which I believe is partly due to the overseas acquisitions. Together with the rising receivables (which do not appear to be dropping back to 'normal' levels per management indication at beginning 2012) and increasing debt to fund working capital/acquisitions, I am beginning to think whether business fundamentals have changed to warrant selling...
Shall be grateful if you can share your views or point out anything I have missed or gotten wrong? Many thanks.
(Vested)
RBM, Retired Botanic MatSalleh