Haha.. Feeling it's interesting to write about this..

Why? Because the company always suffered loss in the past due to hedging the USD and the price was floating around 40 cents. But now the company finally is making a profitable quarter. Shouldn't the price be higher?

I believe some people have super high expectation in this quarter results and trade particularly for this QR, so these traders may got disappointed. After these short term players with super high expectation exit, the price should be going north over time with genuine investors. In fact,I personally think it should head to at least 50 cents with this QR and then awaiting to explode with good QR in future.

For me, the QR is not wow as expected but it's ok actually as there are some one off cost were incurred. For example, some production lines were shut down and there was cost for transferring the production lines to “Haji Manan Factory”. But it's a good move for long term, as it will increase the profit margin in future.

Besides, there are other one off costs like the year end pay out for employee benefits.

And finally, the main culprit is the taxation. The provision of taxation is sort of misleading as the quarter's profit before tax (PBT) is 6.7mil BUT the taxation incurred is 3.6 mil which is half of the PBT. Thus the profit after tax (PAT) is slashed to 3.1mil. According to the current QR, it's current quarter's taxation is just 0.2 mil. But due to reversal of unrealised foreign exchange losses, there is one off deferred tax to be recovered i.e. 3.4mil. IMHO, ones shouldn't just look at the PAT but PBT too. If we exclude the deferred tax, the EPS should be 2.4 cents/shares.

I like the company for it's good fundamental and cheap valuation.

Strong balance sheet. High NTA 1.07/share. Good cash flow. Bulky of cash on hands (cap@110mil, cash@43.7mil). Low gearing@8.7% (total loan@32 mil). Considered as net cash @11.7mil if opt to clear the loan with the cash. Yet still have almost 57mil of receive-able and 41 mil of inventories on hands. Good history of zero impairment in receive-able with branded international brands as customers.

Operation wise, hedging amount and risk is reduced, the crisis should be over, but still we should be cautious. Efforts were put in reducing cost by centralizing production lines, gross margin should be improved. HDD business is well maintained with commercial hard disk. Automation business is increasing. DSLR business is getting its bottom and stabilizing compared to the drastic drop in few years ago, perhaps it may increase with renewed product cycles as some DSLR product models are coming out.

Yet the valuation is cheap. A company like this @41 cents, where to get?

Anyway, I believe the journey is just began. This is actually a good start. Notion should have good prospects in terms of operation and share price performance in future.