Icon8888 Gossips About Stocks

(Icon) Uchi Tech Is Also A beneficiary of Weak Ringgit

Icon8888
Publish date: Fri, 02 Jan 2015, 03:34 PM
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I follow the smell of money.
Following Message

 

 

I have always admired Uchi Tech. However, all these years, I have never bought a single share. The dividend yield is fantastic. However, I think the PE multiple is a bit too high for my liking.

 

However, the recent strengthening of the US Dollars against Ringgit has finally given me a reason to buy into this excellent company. Almost the entire 100% of Uchi's revenue is denominated in US Dollars. 

 

 

 

Uchi has market cap of RM543 mil (based on 375 mil shares and RM1.45). 

 

Based on 12 months cumulative net profit of RM46.2 mil, the stock is trading at PER of 11.8 times.

 

The group has zero loans and cash of RM115 million, representing cash of RM0.30 per share.

 

During the past 12 months, the Company paid out dividend of 11 sen. This translates into dividend yield of 7.6%.

 

In this time of uncertainties and market turbulence, parking my money with Uchi seemed like an excellent idea.

 

Have a nice day.

 

 

UCHITEC (7100)
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2024-04-22

UCHITEC

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Annual Report on 31-Dec-2023.

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Discussions
4 people like this. Showing 13 of 13 comments

screwdriver

I'm sharing the same view as you.

2015-01-02 15:39

RicheHo

Hi, based on its annual report, its revenue is mostly from Europe. So, the affected currency should be Euro dollar instead of USD, isn't it? Correct me if I am wrong. Thanks.

2015-01-02 16:57

Icon8888

Page 20 of the annual report (2013) states that "Furthermore, as our revenue is billed in US Dollars, we are highly exposed to USD currency fluctuation risk"

2015-01-02 17:06

RicheHo

Yeah, I agree with you Ringgit had depreciated against Euro from 4.15 (October) to around 4.25. Refer to note 33, page 95,the segmental information of its revenue. I am quite confused with its statement.

2015-01-02 17:22

paperplane

Well, it depends whether there is hedge against r8nggit fall.

2015-01-02 19:23

Hotrod

This stock got no growth story. Hard to sell to fund managers. The revenue aint growing at all.

2015-01-02 19:25

Icon8888

Hotrod, there is another way of looking at it.

First of all, from dividend alone, i can get 7.6% return.

If I am targeting 20% return in 2015 for Uchi, I need it to go up by 12.4% only (agree with you it is not exactly a growth stock).

Based on RM1.45, that is 18 sen.

As long as Uchi can go up to RM1.63 (hopefully the strong US Dollars can give it a push) and it declares dividend of RM0.11, I am within reach of 20% return.

If I look at Uchi from this angle, it suddenly become very investible (for me)

2015-01-02 20:24

bakaruo

Bought uchitec today. Monday market will be very good. volume from funds coming

2015-01-02 21:31

CCCL

Icon8888, noted with thanks.

2015-01-02 23:36

JeevS

Hi, since its revenue are mostly from Europe. Beware of the Euro crisis. Wait and see after Jan 25th, after Greece's election, might mark the second round of the Euro crisis.

2015-01-04 12:10

Icon8888

It is a valid point. Those who think this is an important factor should wait

2015-01-04 14:18

tony89

thanks guys for all the information.

2015-01-06 07:56

hwaism

...and it's now 1.6X already.

2015-07-24 14:32

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