Friday 24 May 2013

VITROX: Q1FY13 - 不达标的业绩? (Unfavourable Result?)



Initially, I don't plan to write every single quarter result analysis as the company target is based on year 2015. Due to Q1 result, the figure is a bit disappointed me. Basically, I estimate it can at least hit eps=1sen or above. With this kind of result, I don't expect the share price to continue its impressive trend in short term. By compare its Q-Q result, it looks better. But still failed my own expectation.

1. 过去三年里(2010-2012),公司总共投资了24mil来增产。
2. 管理层曾经透露增产的活动暂时已经足够了。但是,看了Q1FY13的资料,原来在这季也有动用了1.1mil来增产。扣了这个费用,其实这季的业绩,大概有0.5sen的EPS。

Let's have a look on below details:
1. From the past 3 years (2010-2012), company had invested 24mil for expansion purpose.
2. According to management, the expansion activity is enough. But, when we look into Q1FY13 details, actually there is another 1.1mil used for expansion activity. If neglect this figure, this Q should get about eps=0.5sen.
Cash Flow from Investing Activities
3. 以过去几年的业绩,每一年其中一个季的业绩都有一个低潮。
4. 在2012Q1和2013Q1的低潮中,公司的运作费用都是高过营业量。超高的运作费用,主要都是来自突然高涨的存货。最近这季既然多了7.3mil的存货。看到了这个变化,可以联想到的原因有三个,(一)是为了接下来的供应而囤货(二)是因为顾客推迟订单(三)是因为顾客取消订单。

3. From the past few years record, there will be a bad quarter for each year.
4. Refer to 2012Q1 and 2013Q1, its high operating cost is the main contributor for the bad result. Basically, this high operating cost is generated from the sudden spike in inventory level. This latest quarter, its inventory has increased about 7.3mil. By looking on this change, I was thinking of 3 reasons, (1) to supply for the coming quarter order (2) order push out by customer (3) customer cancelled order.
Correlation Indicators
5. 管理层在Q1FY13的季报里,讲到接下来的业绩会有变更好。所以,存货高涨的最大原因应该是(一)与(二)。都是属于利好。

5. Management expect a better result in coming quarters. So, the increased inventory most probably is due to reason (1) and (2). Both are positive effect to company.
Q1FY13 Quarterly Report's Prospect
Source:$File/ViTrox%20-Q12013.pdf (Page 7)

1. 存货高涨7.3mil是在2010-2013年里的最高水平。其次是Q3FY12,增加5.3mil。接下来的Q4FY12交出来一个漂亮的业绩(也是营业量的历史新高,33.67mil)。
2. 存货相等于产品大部分的成本。如果(大概预测)产品卖出后的盈利是10%,那么7.3mil的成本将能带来**8.1mil的营业量。(**更改)



》短期 - 我的建议是卖掉你手上的票。因为我预测短期股价很难有更高的上升空间。(除了有预想不到的利好公布)
》长期 - 暂时守着你手上的票。如果股价跌到60+sen或更低,可以慢慢加码。



1. Inventory increased by 7.3mil by this quarter and it is the highest level since year 2010-2013. It follow by Q3FY12, which increased about 5.3mil. As a result, the Q4FY12 came with a great result, which is the highest quarter revenue at 33.67mil.
2. Inventory equal to most of the product cost. If (just a simple estimation) the PAT margin is 10%, then the extra 7.3mil inventory will contribute of 8.1mil in revenue.

Is this result a disaster or an opportunity?

If you just bought in VITROX recently, you should think about whether you get in for short term trading or for the company 2015's target.

Below is my suggestion on the investment strategy:
> Short term - sell off your share because I expect the share price hardly to further impressive you unless there is any unexpected good news from company.
> Long term - hold your share and top up slowly if share price drop to 60sen+ or below.

Most of the people may not see good on the current economy. But it still better than the 2008 crisis situation. Thus, I still looking good on the company to achieve the 200mil revenue (personal target).

Saturday 18 May 2013

[0097] VITROX



- 管理层透露,以公司现有的设备,看好能在2015年里,以自然成长的需求下,把营业量提高到3-3.5亿。
- 所以,这个方案要达标就必须通过并购活动来达成。
- 是不是夕阳企业这个问题,就由你去思考了。
- 注:要完全反射这个效应,条件是要有很好的销售成绩。但是,这个利好已经可以克服2010年供不应求的问题!
- 增加销售量,又能打响公司的品牌。
- 做生意(尤其是科技业),原步跑是大忌!新产品能陆续推出,就能够维持和增加市场上占有率的一杯羹。

》 2012年的EPS=8.8。以今天的收市价,82sen。PE=9.3,感觉上属于一般。
》 用保守的方式去预测,只要公司能达到2亿的营业量,就代表公司的业绩会达到一倍多的增长。
》 接下来,公司的除税后溢利(PAT)将会继续降低。所以,营业量 vs EPS就不能以一对一去算。

c)除税后盈利 =(200mil x 15%)= 30mil
d)总共股数 = 232,500,000
e)EPS = 30mil / 232.5mil = RM0.129
f)PE = 82sen / 12.9sen = 6.36
g)比如股息有3.5sen,DY= 3.5sen/82sen = 4.27%

》如果,到时市场给公司的PE=10,股价= 10 x 0.129 = RM1.29。



A)营业量 = 3亿 》 EPS = (300mil x 15%)/ 232.5mil = RM0.1935 》 PE = 10,股价 = RM1.94
B)营业量 = 4亿 》 EPS = (400mil x 15%)/ 232.5mil = RM0.2581 》 PE = 10,股价 = RM2.58
C)营业量 = 5亿 》 EPS = (500mil x 15%)/ 232.5mil = RM0.3226 》 PE = 10,股价 = RM3.23

D)营业量 = 2亿 》 EPS = (200mil x 18%)/ 232.5mil = RM0.1548 》 PE = 10,股价 = RM1.55
E)营业量 = 3亿 》 EPS = (300mil x 18%)/ 232.5mil = RM0.2322 》 PE = 10,股价 = RM2.32
F)营业量 = 4亿 》 EPS = (400mil x 18%)/ 232.5mil = RM0.3097 》 PE = 10,股价 = RM3.10




The previous post has explained the company business quite well. Thus, I will straight to the key points explained why it is a good investment.

Business Key Points:
1)Company planned to hit the revenue from current ~90mil to 500mil in year 2015.
- According to the company, the organic growth can help them to hit up to 300-350mil in year 2015.
- Thus, the additional revenue need to be top up thru M&A activity.
2)Under high nation income plan by government, employee salary will goes up slowly. Minimum salary also is the must implement program in coming near future. The blooming technology has lead to more complicated product design and product size also getting smaller. Companies would like to have high capacity production  to generate more income and also expect for good quality & more reliable product to avoid unnecessary cost penalty. Thus, market will slowly divert the trend from human dependant job to automation technology.
- So, is this a sunset business? Let you to think about it.
3)The plant expansion has been completed since last year. The size is 4 times larger than previous and this will able to push the production capacity by 100% increment. By translate to productivity, it is up from 30 units production to 60 units product per month.
- ATTN: In order to reflect this effect, company must come with great order from customers. Anyhow, this expansion has eliminated the concern of unable to support greater demand from customer which happened during year 2010.
4)Aggressively to explore more market through sales and marketing.
- This will open opportunity for more revenue as well as promoting the company brand.
5)15% CAPEX is located for new product invention
- To stay on to technology world, company must always make new products. This is the correct path to capture the market share greater and more effective.

FA Key Points:
》 2012's EPS = 8.8. Today closing price = RM0.82. Thus, PE = 9.3. It seem nothing special.
》 To be conservative. Let's assume company only can hit 200mil revenue. Basically, this translate to more than 100% grow on revenue.
》 In future, company PAT will get lower actually. So, revenue vs eps will not go up parallel as per current situation.

》Calculation (be conservative)
a)If 2014/15 only generate 200mil revenue.
b)If PAT margin drop from 2012's 23% to 15%。
c)PAT =(200mil x 15%)= 30mil
d)NOS = 232,500,000
e)EPS = 30mil / 232.5mil = RM0.129
f) PE = 82sen / 12.9sen = 6.36
g)If dividend is 3.5sen, DY = 3.5sen/82sen = 4.27%

》If market appreciate the company by giving PE=10. Stock Price = 10 x 0.129 = RM1.29。
( This calculation is purely based on 200mil revenue and PAT = 15%. Also, rated a world class company with PE=10 is quite reasonable.)

》According to this conservation estimation, it seem like an attractive investment opportunity. So, do you think it is worth to invest?

Add On:

A) Revenue =300mill 》 EPS =(300mil x 15%) / 232.5mil =RM0.1935 》 PE =10, Stock Price =RM1.94
B) Revenue =400mill 》 EPS =(400mil x 15%) / 232.5mil =RM0.2581 》 PE =10, Stock Price =RM2.58
C) Revenue =500mill 》 EPS =(500mil x 15%) / 232.5mil =RM0.3226 》 PE =10, Stock Price =RM3.23

D) Revenue =200mill 》 EPS =(200mil x 18%) / 232.5mil =RM0.1548 》 PE =10, Stock Price =RM1.55
E) Revenue =300mill 》 EPS =(300mil x 18%) / 232.5mil =RM0.2322 》 PE =10, Stock Price =RM2.32
F) Revenue =400mill 》 EPS =(400mil x 18%) / 232.5mil =RM0.3097 》 PE =10, Stock Price =RM3.10

Other Key Points:
1) Recently, few directors disposed share through open market (66-68sen) and also off market (60-61sen).
2) Based on this activity, roughly know that the room for share price to be further downside is already limited. Thus, the risk to catch falling knife is very low.
...why directors would like to dispose the share at discounted price through off market? I will let you to think about it!

Monday 13 May 2013

VITROX: 5-5-5的来源(The original source of 5-5-5)


Recently, I against the electronic sector downturn risk to buy in Vitrox, 0097. Actually, it is the first company that gave me a 100% profit from the invested capital. This is the reason why it is always appear in my investment radar. Basically, it is a world-class local technology company established by Malaysians. Let's have a look on below news and make your own judgement from it. I will share my thinking in later post.

Creating the right environment at Vitrox

Karamjit SinghApr 26, 2013

CEO wants to create a world-class technology company, takes lesson from Grove but not Welch
Opts instead to create a happy working environment where staff are happy to give their 100%

CHU Jenn Weng (pix), founder and chief executive officer of Vitrox Corporation Bhd, is one of that rare breed who have successfully made the transition from engineer to entrepreneur.

He grew his machine 'vision inspection' start-up to a listed company with 170 engineers (five of whom are in the United States) which last year earned RM89 million in revenue with profits at RM21.5 million.
[RM1 = US$0.32}

He has also shown himself to be a risk-taker and to be somewhat paranoid – the Andy Grove-type paranoia that the former Intel Corp chairman made famous as a management maxim in his book Only the Paranoid Survive.

Chu exhibited this trait in 2007, a year of then record sales and profits which saw Vitrox embarking on a transformation program thereafter. He says this was because he realized then that his company was very dependant on the cyclical semiconductor sector, and worse, on one or two customers within that space, for its revenues.VITROX

“We entered other market segments downstream to play in other parts of the value chain,” he says, explaining that Vitrox moved from providing inspection at the semiconductor component level to providing inspection solutions at the PCB (printed circuit board) and PCB assembly levels.

“As digital devices become more complex, these PCBs have become more complex too, going from 20 layers in 2003 to around 60 layers today. But we have the inspection solutions for these products,” he says.

Moving downstream has certainly paid off for Vitrox, but another move he made, a risky one, was to prove even more fruitful.

While 2007 was a great year, the recession hit in 2008 with 2009 an even worse year. The multinationals in Penang responded swiftly by cutting headcount to keep their operations as lean as possible. “But I felt this was the best time to hire good people,” says Chu.
As fate would have it, one multinational was shutting down its R&D unit involved in inspection. Chu wasted no time in meeting them and hiring the entire team. The headcount in Vitrox's R&D team at the time went up by 20% while he sunk in 30% of revenue into research, compared to the usual 10%.

He made that call because he felt the recession was going to be temporary, while Vitrox planned to be around forever. Despite the increased investments in R&D, Virtox still made a small profit in 2009.

The markets not only started recovering in 2010, a year that also saw a bull market for the semiconductor players. Those servicing them, such as Vitrox, benefited too. But Vitrox had the added advantage of having a larger inspection team and there was a void in the market in Penang after the job-cutting the year before. “We filled the void,” says Chu.

This was especially true for 'Advanced Optical Inspection' and 'Advanced X-Ray Inspection,' two new areas Vitrox got into in 2010 which helped power the company to record profits in 2011. Chu has even gone on to publicly state that Vitrox is aiming to be the best in the world when it comes to Advanced X-Ray Inspection.

The 555 strategy

His desire to create a Malaysian multinational was inspired by a visit to the famed garage in Silicon Valley where the founders of Hewlett-Packard launched their company. Chu recalls thinking to himself, “Why can’t Malaysians build a world-class technology company?”

Today, he is on his way to building that company, especially with his '555 strategy' which calls for RM500 million in revenue in 2015 with 500 staff, mainly engineers. Beyond these numbers is the multiplier effect where he will be creating an ecosystem of small and medium enterprises to serve his needs, and estimates that he could create, directly or indirectly, 10,000 jobs.

He has already become one of the key homegrown players in the Electronic and Electrical (E&E) ecosystem up north.

“It is a tough target to achieve but I know it will be a very fulfilling journey,” says Chu of the revenue target. The company did a growth trajectory and estimated it could hit RM300 million by 2015 on organic growth. He feels the RM500 million can be achieved if he partners with a larger player or embarks on mergers and acquisitions.

He also initially tried General Electric legend Jack Welch’s famous theory of easing out the bottom 10% of the company annually, but around 2008 he gave that up and decided it was more important to create a happy work environment instead of one that was filled with stress.

“I feel you can only create a sustainable culture if the environment is such that everyone wants to come to work,” he says in an acknowledgment of how the needs of Gen Y need to be factored into the corporate culture that entrepreneurs like him are trying to create, later showing this writer around the common areas at his company, emphasizing the spaciousness, newly-renovated game room and yoga class going on.

It must be working because he proudly shows the Prime Minister’s Excellence Award Vitrox won late last year in the manufacturing category, beating the likes of Intel.

ViTrox looks to M&A to grow revenue
KUALA LUMPUR (May 2, 2013): ViTrox Corp Bhd, the country's largest solution provider of automated vision inspection systems and equipment, wants to acquire companies whose businesses complement its existing portfolio as it aims to be a RM500 million company by 2015.

"We have an internal target called 5-5-5, under which by 2015 we plan to reach a revenue of RM500 million and employ 500 people," its president and CEO Chu Jenn Weng said, noting that organic growth won't be enough to turn such an ambitious plan into reality and thus, it'll have to look to an merger and acquisition (M&A).

"Based on our three existing business units, we may not be able to achieve the targets because the maximum (potential) revenue that we can generate would be RM350 million," Chu told SunBizin an interview held on the sidelines of the Aquilas-MIRA Investor Relations Day themed "Tracking the Northern Lights" recently.

The Penang-based group reported a revenue of RM88.85 million in the last financial year ended Dec 31, 2012 (FY12) and currently has 246 staff.

"We are still in talks (with possible M&A targets), both overseas and local. We want to find companies that can help us improve our existing product offerings to our customers after the M&A.

"While it's not easy to identify suitable acquisitions, there are companies (out there) which we believe can add value to our business," he added.

Chu also said the group currently sits in a net cash position of RM30 million and sees no immediate plans to turn to the capital markets to raise cash.

ViTrox's business is divided into three segments: machine vision system (MVS), automated board inspection (ABI) and electronics communication system (ECS). The group's products are used by companies in the semiconductor, automotive, telecommunication and electronic packaging industries to detect defects that occur during the manufacturing process.

ViTrox senior vice-president Steven Siaw Kok Tong said the group expects to better its revenue growth in FY13, driven by an aggressive expansion into new markets, new products and an anticipated rising demand for its MVS-Tray and ABI products. Its revenue was 12% higher at RM88.85 million last year from RM79.2 million in FY11.

In terms of net profit, it aims to achieve a low double-digit growth in FY13. Last year, its net profit declined by 8% to RM20.47 million from RM22.23 million a year ago amid a soft global semiconductor industry.

"Our capital expenditure for this year will be minimal as we had spent a large part of it (totalling RM20 million) in FY11 and FY12 doubling our manufacturing floor in Penang to 60,000 sq ft from 30,000 sq ft previously. So we have spent enough in terms of infrastructure," said Siaw.

Chu said this year, the group will launch 10 new products across its three business segments.

"Three new products will come from the ABI segment, five from the MVS segment and and two from the ECS segment that will help us continue our growth," he added.

The ABI segment currently accounts for about 60% of ViTrox's total revenue, while MVS takes about 37% and ECS 5%.

Siaw said contribution from the EMS segment is small because the global EMS market remains soft.

"Right now, almost everyone (EMS players) is taking a wait-and-see approach. But once they see a positive outlook and start to expand, then we (ViTrox) will see a significant growth in sales. We are just waiting for that trigger," said Siaw, adding that already eight of the top 10 EMS providers in the world are ViTrox's customers.

Chu also said this year, the group will go aggressive with its marketing and sales to acquire more customers through its direct sales force as well as its worldwide channel partners.

"Over the years, we have spending much time on research and development and now is the time to focus on marketing and sales. We will be increasing our sales personnel from 19 currently as well as our channel partners to 20 from 14 now.

"We see the areas of growth coming from China, Southeast Asia, South America, the US and South Korea," he added.

ViTrox is co-founded in 2000 by Chu, Siaw and its executive director and senior vice-president Yeoh Shih Hoong, who have a combined 65% stake in the group.

ViTrox shares were unchanged at 66 sen on Tuesday.

投資致富  2013-04-29 13:46



從視像檢視系統(Vision System)起家的偉特機構(VITROX,0097,主板科技組),是我國視像檢視系統技術的佼佼者,已在半導體領域奠定領先地位,除了生產視像檢視系統機器,6年前更開始積極研發自動光學檢測系統(AOI),生產更精準快速的光學檢測機器、X-射線檢測系統及相關產品。























P/S: Recent market is very hot. Make sure you have a good position before make any purchase. Trade at your own risk!

Friday 10 May 2013




1. 五位数的主动月薪。
2. 五百千的投资资本。
3. 五百万的基金业绩。


Make a record:

I would like to set a target called 5-5-5, which by 2015 I plan to reach:
1. Five figure of month active income
2. Five hundred thousand of investment capital
3. Five million sales in mutual fund

For 2nd 5, it seem to be very challenging to hit the target by 2015. Maybe I can hit it with M&A method. (Explain in future)