Valuetronics - Maybank Kim Eng 2021-11-10: Many Near Term Headwinds

VALUETRONICS HOLDINGS LIMITED (SGX:BN2) | SGinvestors.io VALUETRONICS HOLDINGS LIMITED (SGX:BN2)

Valuetronics - Many Near Term Headwinds

1HFY22 missed on cost pressures

  • Valuetronics (SGX:BN2)'s 1HFY22 PATMI of HKD56.6m (-38.1% y-o-y) missed, accounting for only 39%/41% of our and consensus’ FY22E estimates. This was largely due to cost pressures that eroded margins.
  • We slash FY22-24E earnings per share forecast for Valuetronics by 20-27% to factor in an environment with lower-than-historical margins.



Rising component and labour prices weigh on margins

  • Valuetronics's 1HFY22 revenue fell 7.3% to HKD1.015b, and was in line with our estimate. Consumer electronics revenue fell 12.5% as orders were cancelled or deferred due to chip shortages. Industrial and commercial electronics decreased 4.8% as expected loss of automotive allocation was offset by growth from printing and sensing customers that are exposed to e-commerce/logistics.
  • Gross and net margin fell 2.8ppt to 14.2%/5.6% respectively, due to higher components and labour costs as well as stronger CNY.

Vietnam on track

  • Mass production could begin in the new Vietnam campus headwinds.


Wait for a better entry point






Gene Lih Lai CFA Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2021-11-10
SGX Stock Analyst Report SELL DOWNGRADE HOLD 0.50 DOWN 0.600



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