DB:DW2

Stock Analysis Report

Deswell Industries

Executive Summary

Deswell Industries, Inc. manufactures and sells injection-molded plastic parts and components, electronic products and subassemblies, and metallic molds and accessory parts for original equipment manufacturers and contract manufacturers.


Snowflake Analysis

Flawless balance sheet and undervalued.

Share Price & News

How has Deswell Industries's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: DW2 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.2%

DW2

-2.4%

DE Electronic

-0.2%

DE Market


1 Year Return

-1.9%

DW2

8.1%

DE Electronic

13.7%

DE Market

Return vs Industry: DW2 underperformed the German Electronic industry which returned 8.1% over the past year.

Return vs Market: DW2 underperformed the German Market which returned 13.7% over the past year.


Shareholder returns

DW2IndustryMarket
7 Day3.2%-2.4%-0.2%
30 Day-0.8%9.1%0.3%
90 Day16.4%6.8%3.7%
1 Year4.0%-1.9%10.5%8.1%17.2%13.7%
3 Year76.1%55.2%48.0%43.1%15.4%5.3%
5 Year109.2%57.7%113.5%98.2%21.3%4.7%

Price Volatility Vs. Market

How volatile is Deswell Industries's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Deswell Industries undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DW2 (€2.56) is trading below our estimate of fair value (€16.53)

Significantly Below Fair Value: DW2 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: DW2 is good value based on its PE Ratio (15.7x) compared to the Electronic industry average (30.7x).

PE vs Market: DW2 is good value based on its PE Ratio (15.7x) compared to the German market (20.9x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate DW2's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: DW2 is good value based on its PB Ratio (0.5x) compared to the DE Electronic industry average (1.9x).


Next Steps

Future Growth

How is Deswell Industries forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

16.5%

Forecasted Tech industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Deswell Industries has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Deswell Industries performed over the past 5 years?

63.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DW2 has high quality earnings.

Growing Profit Margin: DW2's current net profit margins (4%) are lower than last year (8%).


Past Earnings Growth Analysis

Earnings Trend: DW2 has become profitable over the past 5 years, growing earnings by 63.1% per year.

Accelerating Growth: DW2's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: DW2 had negative earnings growth (-47.6%) over the past year, making it difficult to compare to the Electronic industry average (-3.9%).


Return on Equity

High ROE: DW2's Return on Equity (3.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Deswell Industries's financial position?


Financial Position Analysis

Short Term Liabilities: DW2's short term assets ($72.3M) exceed its short term liabilities ($18.3M).

Long Term Liabilities: DW2's short term assets ($72.3M) exceed its long term liabilities ($631.0K).


Debt to Equity History and Analysis

Debt Level: DW2 is debt free.

Reducing Debt: DW2 has not had any debt for past 5 years.


Balance Sheet

Inventory Level: DW2 has a high level of physical assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if DW2's debt is covered by short term assets.


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: DW2 is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: DW2 is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Deswell Industries's current dividend yield, its reliability and sustainability?

5.86%

Current Dividend Yield


Dividend Yield vs Market

company5.9%marketbottom25%1.3%markettop25%3.7%industryaverage1.2%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: DW2's dividend (5.86%) is higher than the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: DW2's dividend (5.86%) is in the top 25% of dividend payers in the German market (3.65%)


Stability and Growth of Payments

Stable Dividend: DW2's dividend payments have been volatile in the past 10 years.

Growing Dividend: DW2's dividend payments have not increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (86.2%), DW2's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

20.2yrs

Average board tenure


CEO

Edward So (46yo)

6.2yrs

Tenure

0

Mr. Kin Chung So, also known as Edward has been the Chief Executive Officer at Deswell Industries, Inc. since December 2, 2013. Mr. So has been in the electronic manufacturing industry internationally and ...


Board Members

NamePositionTenureCompensationOwnership
Chin Li
Executive Director of Manufacturing & Administration for Plastic Operations and Director33.1yrsno data8.96% $3.8m
Hung-Hum Leung
Non-Executive Director20.2yrsno datano data
Yau-Nam Cham
Non-Executive Director16.5yrsno datano data
Pui Lau
Chairman of the Board33.1yrsno data53.77% $22.8m
Wing-Ki Hui
Non-Executive Director15.3yrsno datano data

20.2yrs

Average Tenure

73yo

Average Age

Experienced Board: DW2's board of directors are seasoned and experienced ( 20.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Deswell Industries, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Deswell Industries, Inc.
  • Ticker: DW2
  • Exchange: DB
  • Founded: 1987
  • Industry: Electronic Manufacturing Services
  • Sector: Tech
  • Market Cap: US$45.677m
  • Listing Market Cap: US$42.324m
  • Shares outstanding: 15.92m
  • Website: https://www.deswell.com

Number of Employees


Location

  • Deswell Industries, Inc.
  • 10B Edificio Associacao Industrial De Macau
  • No. 32-36 Rua do Comandante Mata e Oliveira
  • Macau
  • Macau

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DSWLNasdaqGM (Nasdaq Global Market)YesCommon SharesUSUSDJul 1995
DW2DB (Deutsche Boerse AG)YesCommon SharesDEEURJul 1995

Biography

Deswell Industries, Inc. manufactures and sells injection-molded plastic parts and components, electronic products and subassemblies, and metallic molds and accessory parts for original equipment manufacturers and contract manufacturers. It produces a range of plastic parts and components that are used in the manufacture of consumer and industrial products, which include plastic components for electronic entertainment products, power tools, accessories, and outdoor equipment; cases for flashlights, telephones, paging machines, projectors, and alarm clocks; toner cartridges and cases for photocopy and printer machines; and parts for electrical products, such as air-conditioning and ventilators, as well as parts for audio equipment, and cases and key tops for personal organizers and remote controls; double injection caps and baby products; parts for medical products comprising apparatus for blood tests; laser key caps; and automobile components. In addition, it provides electronic products that consist of audio equipment, including digital and analogue mixing consoles, amplifiers, signal processors, audio interfaces, network audio equipment, and speaker enclosures; consumer audio products, such as multi-channel receivers-amplifiers, and wired and wireless audio streaming products; printed circuit board assemblies; and telecommunication products comprising VoIP keysets for business communications. The company sells its products primarily in the People’s Republic of China, the United States, the United Kingdom, Norway, Holland, Hong Kong, and Canada. Deswell Industries, Inc. was founded in 1987 and is based in Macau. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 22:03
End of Day Share Price2020/02/20 00:00
Earnings2019/09/30
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.