Valuetronics - UOB Kay Hian 2023-11-16: 1HFY24 Above Expectations; Poised To Benefit From New Customers

• Valuetronics’s 1HFY24 net profit of HK$82.1m (+42% y-o-y/+26% h-o-h) was above our expectations, making up 61% of our estimate. 1HFY24 revenue (-15% y-o-y) declined due to lower customer demand. However, margins have improved from better supply chain visibility and reduced labour costs.
• - Read this at SGinvestors.io -

1HFY24 results above expectations; other income doubled from rate hikes.

• Valuetronics (SGX:BN2)’s 1HFY24 (Apr to Sep 2023) net profit of HK$82.1m (+42% y-o-y, +26.1% h-o-h) was above our expectations, making up 61% of our full-year estimate. Revenue fell 15.2% y-o-y due to lower demand from some of its industrial and commercial electronics (ICE) customers.
• - Read this at SGinvestors.io -
• lower labour costs in China, stemming from stabilisation in the labour supply as well as depreciation of the Renminbi.
• The surge in other income to HK$28.8m (+123% y-o-y), mainly from rising interest income as a result of the US Fed rate hikes, also led to net margin expansion to 9.2% (+3.7ppt y-o-y).

ICE segment’s revenue fell but margins expanded.

• Read more at SGinvestors.io.

John Cheong UOB Kay Hian Research | https://research.uobkayhian.com/ 2023-11-16 SGinvestors.io

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