2% dividend announced for EG-PA.

No problem, dadada. If you understand Flic, you will know it is a very interesting product.

Some correction. Flic is designed by Shortcut Lab, and manufactured by EG.

The months of October, November and December are traditionally the busiest month for manufacturer like EG.

I will go back to seclusion and wait for the Q2 results next year. Have fun!

VenFx bro, I forgot to ask about the acquisition. I did not take the plant photo.

First factory is 100% utilized. We have only visited the front part of second factory. Judging by my view, maybe around 40% of the floor space is utilized.

Friends, I have already published the blog on EG AGM.

https://klse.i3investor.com/blogs/Fly_universe/139847.jsp

It is written in Chinese as the whole conversation is done in Chinese. If you have any extra question you may ask me here.

If we say having Dyson as customer assures that share price will have PE 20, then what about these EMS companies that do not have Dyson as customer?

Uchitec - PE 24.7
Salutica - PE 26.5
Bslcorp - PE 18.8

Having Dyson is not the whole story.

Highlight of the QR:

- Cash flow improve a lot.
- Overall cash and balances also jump to the height of 72 mil.
- Gearing has dropped to around 0.78.

Overall I am very pleased with the result, and will anticipate more to come.

QR out. Not bad. I study first, then give comment.

Profit margin depends on product mix. If more box-build, margin will be high. The CEO said he target 70/30, but personally I don't believe. I will give around 80/20, which might contribute to a profit margin of around 2.4%.

Brief Highlight:

- Target 1.2 Bil. in FY 2018.
- No labour shortage, but there is raw material shortage.
- Raw material shortage could cause delay in order fulfillment.
- Will make MOU with new customer in due course.
- Purchased a land that will be used for the 3rd factory.

More to come....

OK, thanks wiki123.

VenFx, how do I post as a blog, instead as a message in this page?

I have just came back. The investors had a long chat with the CEO. Will update with some key highlights from the AGM.

Just for book-keeping purpose.

https://www.pressreader.com/malaysia/the-busy-weekly/20170715/281745564432508

https://www.pressreader.com/malaysia/the-busy-weekly/20170715/281788514105468

27 November, 11.30 am.

Thanks Antman and VenFx. I will sort out some of your questions and ask in the AGM. I will also prepare a brief report about the AGM.

Hello, Antman. We cannot draw direct relation between Jubilee result and EG result, since EG has no stake in Jubilee. However, since they are sister companies, the pooling of resources with Jubilee and the support of Jubilee's PPIM services would indirectly enable EG to achieve greater economies of scale.

This news is also a console as Jubilee has always been dubbed as a lousy company buying stake in EG to make EG a lousy company.

Yes. Please post your questions to me.

http://cj.sharesinv.com/20171117/52336/

http://cj.sharesinv.com/20171113/52174/

EG负责制造和分销TRAMIGO TRACKER(东南亚区)。TRAMIGO卖的好，对EG有利。

VEHICLE TRACKER会把驾驶数据整合后传送给INSURER，然后INSURER再会根据驾驶数据去决定风险。

简单来说，在UBI，你如何驾驶将是其中一个决定汽车保费高低的因素。如果整天超速，把汽车泊在高失窃的地区。。。这个驾驶者自然就要付更高的保费了。

UBI将在2019完全实行，现在已经局部开始。

Thanks VenFx, but it is a fact that the share price of this company is the shittest I have ever seen. :)
People have no confidence in them.

不要吵了啦。看会公司的生意吧。生意能不能做?产品能不能卖?未来产品会不会越卖越好?

我来讲讲Vehicle Tracker吧。现在的趋势是Vehicle Tracking的Market Share会越来越大。很多公司已经在摩拳擦掌准备分一杯桨，Tramigo就是其中一份子。

另外一家公司Katsana也已经开始和保险商开启Usage Based Insurance (UBI)的合作。UBI需要用到Vehicle Tracker。

https://paultan.org/2017/09/05/katsana-signs-mou-with-allianz-etiqa-and-axiata-to-develop-usage-based-motor-insurance-drivemark-app/

以前大家发现原来那么多车都装了LED灯然后全部才去追JHM。

难道现在要等到未来发现那么多车装了Vehicle Tracker然后才来追EG?

Those are their subscription for the preference share. From the two directors, Alex subscribed an excess of around 500K RCPS.

VenFx bro, mind to share where did the management say 1QFY2018 will have sales 250 Mil?

冷眼離開了EG，不過EPF進來了，EG已经开始被大户留意了。

年报的其中一个亮点就是Ageing Receivables很明显进步了。

公司也言出必行，收购了约8.8mil的Intellectual Property，这个IP是 licensed technology in connection with the manufacture, application and sale of licensed products.

VenFx bro, you should look at the 'cumulative quarter ended 30/6/2017' in page 13 of the Q4 FY2017 report, net forex loss is RM 5.221 mil.

To be clearer, I tabulate the whole year data for you:

Q1 FY2017: forex loss RM 0.476 mil.
Q2 FY2017: forex loss RM 0.146 mil.
Q3 FY2017: forex loss RM 1.717 mil.
Q4 FY2017: forex loss RM 2.882 mil.

Full FY2017: Net forex loss RM 5.221 mil.

VenFx, total forex loss for FY2017 is 5.221 mil.

The grand EMS landscape, just like what you did. The more smaller details, I will explain later.

Haha, I am monitoring from big direction.

VenFx, don't be like that. He is an employee there and his talk is definitely not baseless, but in fact answered some of my questions.

JohnnyKosong, can you do us a favor?

EG mentioned in their prospectus for the latesr RI, that they have secured new box-build contract worth RM 300 Mil. for 2 years. Can you do us a favor to answer these 2 question?

1. Who is the client?
2. What is the product?

Thank you in advance.

Thanks to Johnny anyway. His information is useful on the end of life aspect of WD product. I will ask this question in the AGM.

Interesting. Seems like you have an unhappy life working there. No offence, but life goes on. Don't take personal matter too much.

As a shareholder, I have been always monitoring and it is always possible to exit the investment anytime.

First of all. No one is saying vertical integration is a new thing, as it is a business strategy that dates back even to more than 50 years ago in other sectors. What EG is doing now is at least aligning well in the current EMS landscape, as there are losing parties such as Comcorp which fails to cope with this landscape in EMS.

Of course challenges will be there and will be enormous. But the facts are: EG has been able to grow their top-line and bottom line.

For sure their customer profile are not WD or Dyson? EG has been manufacturing PCBA for WD since 1994 and started manufacturing box-build for WD starting 2015. EG start to manufacture PCBA for Dyson in 2007, and from the latest development, it seems they are given the privilege to manufacture a box-build product for Dyson.

The plus in VI+ means distribution, on top of VI. For sure it is not delusional or imaginary item, though the effect of this is yet to seen fully.

For SMT City, I agree, I also laugh when I saw this. However soon I realized I might be making a mistake. Yes, they are far from achieving that and more work needs to be done, put in more automation, but they are doing works. It is just too easy for me to sit comfortably in an air-con room and become a 'keyboard warrior' criticizing and laughing at other's dream.

No problem. You can post it here.

Should be around early December.

Agree. They won't be doing nothing. But to convince the Thailand authority really takes longer than expected time. I will ask the management in the coming AGM.

VenFx. The SMT Thai IPO proposal has been put on hold until further deliberation.

Comcorp has disposed their EMS subsidiary (BCM Electronics). I took some time to read in detail
the proposal, one of the reason is this:

(iv) Dependence on key customers

BCM Electronics is dependent on its top five (5) key customers who contributed
approximately 90% of its revenue for the past five (5) FYEs. Customers are
demanding their EMS partner to have total integrated services capability, including
manufacturing of plastic and mechanical component parts, in order to maintain cost
competitiveness. Lack of R&D capability and no economies of scale for vertical
integration will pose further threats for BCM Electronics’ ability to meet its customers’
requirements and to continue receiving contracts from them.


This again prove that vertical integration is the key to survive and succeed in a highly competitive EMS
sector, and what the EG management currently doing is on right track (in fact their strategy is VI +).

I saw it now. It is in the mobile version.

imnewbie, I can't see it. Still the same old seven box build product.

"其下100%子公司 SMT (Thailand), 一路都有做相关 汽车工业的 PCBA .
相信管理层 要塔上 无人驾驶摄像机的镜头 可以说 方便之門 早已打开。"

VenFx兄，不是方便之門早已打開，而是他們已經走進房間裡。就看他們怎樣佈置房間了。

See Page 20:

http://www.eg.com.my/assets/images/NSL5.pdf

SMTI in Thailand has already started box-build for camera module.

VenFx, after deep study of the QR. I would say I am satisfied with the fairly good result, and this is achieved on the deficit of 2.882 mil of forex loss.

For the PCBA profit margin, my calculation is 1.57%. This is surprisingly good for me, as it has more than tripled the PCBA profit margin of around 0.2% in the old days.

It seems that the management has managed to increase their operating efficiency even for the conventional PCBA business. If they can sustain this kind of efficiency, the increased PCBA revenue next year:

846.8 mil + 20% = 1016.16 mil.

1016.16 x 1.6% = 15.95 mil.

PCBA business alone will generate net profit of 15.95 mil, unbelievable. (of course with better forex management)

Just a friendly reminder. Don't look at malaysiastock.biz (reported a yoy net profit drop of 21%). Read the attached QR with restated result of Q4 2016, there is actually a yoy net profit increase of 19%.

VenFx, if not because of the forex loss of 2.9 Mil. Profit is very close to my estimation of 5.8 Mil.

Anyhow, because a large portion of the existing box-build order are not yet fulfilled, the remaining 50 mil box-build will go into next quarter (1Q FY 2018).

So the 50 Mil order book add up with new box-build order that will flow in, we will see how does next quarter perform.

I am holding.

Alex Foo, from the following link,

https://www.arx.cfa/up/post/640/Rights-Issue-Effect-to-Treasury-Shares.pdf

Rights issue has no effect on treasury shares (at least for stocks in Japan.) If it is true in here, then the following scenario might be true:

Some people needs shares and are ready to subscribe for the rights. Since company has treasury shares, which is not entitled to rights issue, so it is only natural that the company sell them, and in return bank in some cash.

In chinese, it is called: 一舉兩得，何樂而不為。

三家公司都同樣擁有接近相同的成長軌跡，無獨有偶他們都有大客戶DYSON。別看到一家公司Receivables增加就說什麼壞賬，Bad Debt什麼的，另一家Receivables同樣增加，就視而不見。希望大家可以理性的討論。

Finally, look at VS:

Financial Year Revenue (Mil) EBITDA (Mil) EBITDA % Receivables (Mil)
FY 2011 1026.818 95.712 9.32122343 203.25
FY 2012 1201.992 95.275 7.926425467 317.572
FY 2013 1163.911 92.027 7.906704207 410.526
FY 2014 1715.082 119.548 6.970395585 447.55
FY 2015 1936.885 239.218 12.35065582 500.681
FY 2016 2175.626 226.384 10.40546491 583.436
FY 2017(3Q) 2297.964 192.642 8.38316005 816.44

My view: Almost similar as SKPRES and EG. Receivables also increase from 500M in FY 2015 to 816.44 M in the latest QR.

Now let's look at SKPRES's fact

From SKPRES Annual Report
Financial Year Revenue (Mil) EBITDA (Mil) EBITDA % Receivables (Mil)
FY 2011 256.996 41.661 16.21075814 54.35
FY 2012 414.834 58.764 14.16566627 100.866
FY 2013 423.292 62.545 14.77585213 72.777
FY 2014 412.769 48.153 11.665847 96.539
FY 2015 619.267 65.406 10.56184166 218.589
FY 2016 1015.353 123.308 12.14434783 191.138
FY 2017 1943.564 162.274 8.349300563 567.208

My view: Also experiencing steady growth in revenue and EBITDA. However, EBITDA margin is experiencing drop. For receivables, do notice the sharp increase from FY2016 to FY2017 (a whopping 200% increase in receivables).