Sunday, 16 July 2017

Stock Review – UCHITEC (7100)


image source from Big Chart Marketplace

image source from Big Chart Marketplace
Bursa Malaysia - 7100
Bloomberg - UCHI:MK
Yahoo - 7100 .kl
Webpage - http://www.uchi.net/


Company Profile

UCHITEC is principally involved in Original Design Manufacturing (ODM). UCHTEC specialized in design of electronic control circuit. The main subsidiary Uchi Optoelectronic (M) Sdn Bhd which located in Malaysia mainly involved in design and R&D. While Uchi Electronic Sdn Bhd (Malaysia) and Uchi Technologies (Dongguan) Co. Ltd (China) involved in assembly and manufacturing.

1) Customer Information :

UCHITEC customers can be divided into the following geographical information base on 2016 Annual Report:
i)                  Europe -  99.22 %
ii)               Others – 0.78 %
As from the annual report 2016 99 % of the UCHITEC custormers is from the Europe Region.

UCHITEC consists of two (2) major customers as follows:
i)                  Customer A – 73.17 %
ii)               Customer B – 9.00  %

From 2016 annual report 82.17 % of the sales are from 2 major customers and the largest customer has 73.17 % of the sales

PROS:
è 99 % of the sales are from Europe region and the operation will be in China and Malaysia.

CONS:
è  73.17 % of the sales are from one major customer.

2) Products:

Base on 2016 annual report, UCHITECH main product will be touch screen advance display, high precision light measurement (optoelectronic) equipment and mix signal control system for centrifuge laboratory equipment which make up of 99.22 % of the sales.
Base on Affin Hwang, UCHITEC is the main supplier for fully automated coffee machine module which included Krups, Jura and Nespresso.


Financial Statement


From 2016 Annual Report the short term deposit and cash had increase from RM 174,472,670 to RM 200,760,279. These also increase the cash ratio of UCHITEC from 3.65 (2015) to 3.98 (2016).

PROS:
è UCHITEC does not have any borrowing from bank.

CONS:
è Increase of provision for rework and warranty from RM 450,000  to RM 2,013,823


Although the account receivable for 2015 and 2016 is almost the same, in 2016 there is increase of trade receivable that past due which is RM 2,408,695 for 2016 compare to RM 465,289 for 2015. 22 % of the trade receivables recorded in 2016 had past due.

UCHITEC is a debt free company. In 2016 there is an increase of provision for rework and warranty from RM 450,000 to RM 2,013,823.

PROS:
è Cash Ratio of UCHITEC had increase from 3.65 to 3.98

CONS:
è 22% of the trade receivable had past due in 2016
Dividend and Bonus Issued for the past five year

UCHITEC had issues a bonus issue of 1 bonus share to every 10 existing shares on 10 Jun 2016.

UCHITEC had constant dividend for the past five year from 2012 – 2016 with the dividend yield of 6.4% after adjustment of the bonus issued

PROS:
è UCHITEC pay dividend constantly
è UCHITEC had 5 year dividend yield of 6.5% after adjustment of the bonus issue

Summary of Stock Reviews