Tuesday, March 31, 2015

'Like' - Elsoft ...

It offers investors an exposure to the robust growth in mobile devices and the increasing use of LED in consumer products.

The Penang based technology player designs and develops automated test equipment for companies to inspect LEDs. LEDs are a component in PCB used mainly in the semiconductor, consumer products, optoelectronic and automotive industries.

It had completed its transfer to the Main Market. The MSC status company has also successfully renewed its pioneer status and will enjoy tax exemption for the next 10 years until 2025.

Its underlying business has been doing very well. Revenue grew at a CAGR of over 41.4% between 2010 and 2014 to rm45.14 million. Net profit grew by an outsized 50.4% annually over the same period to rm19.78 million.

Elsoft runs a lean ship, with just 61 staff, translating into a high productivity of rm740000 of revenue per employee.

Moving forward, it plans to expand its customer base and produce LED testing equipment for medical devices which it expects to boost revenue by 20%.

Meanwhile its associate company Lesoshoppe is seeking to list on ACE market, to fund the expansion of its trading equipment business in Thailand, Indonesia and the Philippines.

It has a strong balance sheet with double digit ROE and is in net cash position of rm32.3 million. This is supportive of its minimum 40% dividend payout policy.

It has been rewarding shareholders with more, paying 50 to 73% annual earnings in 2011 to 2013.

It is trading at a trailing 12 month trailing PER of 15.7 times.

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Please note that all data given are merely blogger's opinion. It is strongly recommended that you do your own analysis and research before investing.