Valuetronics Holdings (SGX:BN2) - Share price, News & Analysis

Q: What is the Fair Price of BN2 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

BN2 (SGD0.53) is trading below our estimate of [[fair value]] (SGD0.64)

BN2 fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	1/6
Past Performance	0/6
Financial Health	6/6
Dividends	2/6

BN2 Stock Overview

Rewards

Trading at 17.4% below our estimate of its fair value

Earnings are forecast to grow 7.18% per year

Risk Analysis

High level of non-cash earnings

Dividend of 4.65% is not well covered by earnings

Profit margins (5.6%) are lower than last year (8.2%)

Valuetronics Holdings Competitors

Aztech Global

SGX:8AZ

S$725.6m

Chuan Hup Holdings

SGX:C33

S$208.2m

Venture

SGX:V03

S$5.3b

Excelpoint Technology

SGX:BDF

S$231.2m

Price History & Performance

Summary of all time highs, changes and price drops for Valuetronics Holdings
Historical stock prices
Current Share Price	S$0.53
52 Week High	S$0.61
52 Week Low	S$0.51
Beta	0.78
1 Month Change	-0.94%
3 Month Change	0%
1 Year Change	-6.19%
3 Year Change	-15.87%
5 Year Change	-43.92%
Change since IPO	108.21%

Shareholder Returns

	BN2	SG Electronic	SG Market
7D	-0.9%	-0.5%	-0.4%
1Y	-6.2%	-4.7%	0.9%

Return vs Industry: BN2 underperformed the SG Electronic industry which returned -4.7% over the past year.

Return vs Market: BN2 underperformed the SG Market which returned 0.9% over the past year.

Price Volatility

Is BN2's price volatile compared to industry and market?
BN2 volatility
BN2 Average Weekly Movement	2.3%
Electronic Industry Average Movement	5.8%
Market Average Movement	4.6%
10% most volatile stocks in SG Market	12.3%
10% least volatile stocks in SG Market	2.2%

Stable Share Price: BN2 is less volatile than 75% of SG stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: BN2's weekly volatility (2%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1992	n/a	Chong Hing Tse	https://www.valuetronics.com.hk

Valuetronics Holdings Limited, an investment holding company, provides integrated electronics manufacturing services (EMS) in Hong Kong, the United States, the People's Republic of China, Poland, Indonesia, Vietnam, France, Germany, South Korea, the Netherlands, and internationally. It operates in two segments, Consumer Electronics (CE), and Industrial and Commercial Electronics (ICE). The company provides EMS services to CE and ICE products covering smart lighting products, printers, temperature sensing devices, communication products, and automotive products.

Valuetronics Holdings Fundamentals Summary

How do Valuetronics Holdings's earnings and revenue compare to its market cap?
BN2 fundamental statistics
Market Cap	S$228.06m
Earnings (TTM)	S$19.97m
Revenue (TTM)	S$356.59m

11.3x

P/E Ratio

0.6x

P/S Ratio

Is BN2 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
BN2 income statement (TTM)
Revenue	HK$2.03b
Cost of Revenue	HK$1.75b
Gross Profit	HK$274.82m
Other Expenses	HK$161.27m
Earnings	HK$113.55m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.27
Gross Margin	13.55%
Net Profit Margin	5.60%
Debt/Equity Ratio	0.0%

How did BN2 perform over the long term?

See historical performance and comparison

Dividends

4.6%

Current Dividend Yield

54%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is BN2 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for BN2?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for BN2. This is calculated by dividing BN2's market cap by their current preferred multiple.
What is BN2's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	HK$1.30b

BN2 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.2x
Enterprise Value/EBITDA	2.1x
PEG Ratio	1.6x

Price to Earnings Ratio vs Peers

How does BN2's PE Ratio compare to its peers?

BN2 PE Ratio vs Peers

The above table shows the PE ratio for BN2 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	17.4x
8AZ Aztech Global	8.1x	14.3%	S$725.6m
C33 Chuan Hup Holdings	38.9x	n/a	S$208.2m
V03 Venture	15.5x	6.8%	S$5.3b
BDF Excelpoint Technology	7.3x	n/a	S$231.2m
BN2 Valuetronics Holdings	11.3x	7.2%	S$228.1m

Price-To-Earnings vs Peers: BN2 is good value based on its Price-To-Earnings Ratio (11.3x) compared to the peer average (17.4x).

Price to Earnings Ratio vs Industry

How does BN2's PE Ratio compare vs other companies in the Asian Electronic Industry?

Price-To-Earnings vs Industry: BN2 is good value based on its Price-To-Earnings Ratio (11.3x) compared to the SG Electronic industry average (11.4x)

Price to Earnings Ratio vs Fair Ratio

What is BN2's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

BN2 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	11.3x
Fair PE Ratio	9.1x

Price-To-Earnings vs Fair Ratio: BN2 is expensive based on its Price-To-Earnings Ratio (11.3x) compared to the estimated Fair Price-To-Earnings Ratio (9.1x).

Share Price vs Fair Value

What is the Fair Price of BN2 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: BN2 (SGD0.53) is trading below our estimate of fair value (SGD0.64)

Significantly Below Fair Value: BN2 is trading below fair value, but not by a significant amount.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is lower than the current share price.

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Future Growth

How is Valuetronics Holdings forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

7.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: BN2's forecast earnings growth (7.2% per year) is above the savings rate (1.8%).

Earnings vs Market: BN2's earnings (7.2% per year) are forecast to grow slower than the SG market (12.3% per year).

High Growth Earnings: BN2's earnings are forecast to grow, but not significantly.

Revenue vs Market: BN2's revenue (6% per year) is forecast to grow slower than the SG market (7.6% per year).

High Growth Revenue: BN2's revenue (6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: BN2's Return on Equity is forecast to be low in 3 years time (9.1%).

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Past Performance

How has Valuetronics Holdings performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-5.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: BN2 has a high level of non-cash earnings.

Growing Profit Margin: BN2's current net profit margins (5.6%) are lower than last year (8.2%).

Past Earnings Growth Analysis

Earnings Trend: BN2's earnings have declined by 5.1% per year over the past 5 years.

Accelerating Growth: BN2's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: BN2 had negative earnings growth (-39.3%) over the past year, making it difficult to compare to the Electronic industry average (4.4%).

Return on Equity

High ROE: BN2's Return on Equity (8.3%) is considered low.

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Financial Health

How is Valuetronics Holdings's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: BN2's short term assets (HK$1.7B) exceed its short term liabilities (HK$724.1M).

Long Term Liabilities: BN2's short term assets (HK$1.7B) exceed its long term liabilities (HK$3.0M).

Debt to Equity History and Analysis

Debt Level: BN2 is debt free.

Reducing Debt: BN2 has not had any debt for past 5 years.

Debt Coverage: BN2 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: BN2 has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Valuetronics Holdings's current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

4.65%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: BN2's dividend (4.65%) is higher than the bottom 25% of dividend payers in the SG market (2.27%).

High Dividend: BN2's dividend (4.65%) is low compared to the top 25% of dividend payers in the SG market (6.02%).

Stability and Growth of Payments

Stable Dividend: BN2's dividend payments have been volatile in the past 10 years.

Growing Dividend: BN2's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (53.7%), BN2's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: BN2 is paying a dividend but the company has no free cash flows.

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Management

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

7.1yrs

Average management tenure

CEO

Chong Hing Tse (60 yo)

16yrs

Tenure

Mr. Tse Chong Hing has been the Chairman and Managing Director of Valuetronics Holdings Limited since August 26, 2006. Mr. Tse joined HTL in November 1996 as the Assistant to the then Managing Director. He...

Leadership Team

Experienced Management: BN2's management team is seasoned and experienced (7.1 years average tenure).

Board Members

Experienced Board: BN2's board of directors are considered experienced (8.1 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.

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/08/17 00:00
End of Day Share Price	2022/08/17 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31