Posted by kcchongnz > Jun 4, 2013 06:32 AM

Posted by jalenheng > Jun 1, 2013 07:24 PM | Report Abuse 
Can share ur view on tecnic? 

Is Tecnic a good company? Is it a good investment? 

While many stocks surged in price in last year, Tecnics’s share price retreated from a high of RM4.10 to RM3.17 now. Is Tecnics necessarily a bad company? I don’t think so. 

Tecnics operates in two segments: plastic wares and moulds. It is engaged in the manufacture and supply of plastic wares, which it offers the products in the areas of household, consumers, industrial and electronics. In addition, the Company is also engaged in the manufacture, fabrication and sale of moulds, which are used in the areas of electronics, automobile and plastic injection moulding. 
Revenue for 2012 dropped marginally by 8% to 194m last year due to the decrease in order from its clients on the electronic and electrical moulds. Net profit for 2012 was down by 14% to 17.4m. However its ROE remains high at 17% and ROIC at 22%, way above the cost of capital. Cash flow is ok on average over the years and it has a healthy balance sheet. If things improve in the future, Tecnics should be doing very well again. Most of all, its valuation is undemanding as shown in the assessment below: 

Tecnic a Good company? 3.170
Good governance ?
Durable business Yes
Growth No
ROE Yes 17% >12% 
ROTC Yes 22% >WACC 
Balance sheet Yes D/E 0.06 
Cash flow Yes good quality 

Screens for investing
ROTC Yes 22% >WACC 
P/B Yes 1.3 <2.0 
PE ratio Yes 7.4 <20