OVERVIEW:
The counter is a global leading manufacturer in the high security equipment industry. As a leading Original Design Manufacturer (ODM) and largest producer in Asia, it supplies wide range of high security products such as ATM safes, bank safes, commercial safes, and cash handling systems for both commercial and consumer uses. Its headquarter is located in Shanghai, which serves as center of research & development. The reputable global customers base consists of Wincor Nixdorf (World No 2 ATM maker), Hitachi, Liberty Safe & Security Products, etc.
HIGHLIGHTS:
[1] The past five years saw its earning growing steadily. Its market base is well diversified into Europe, US and China.
[2] Latest quarter result saw both revenue and profit leap ~ 20%, due to recent acquisition of Krauth (developer of Auto-Ticketing Machine and Money Changers) from Germany. It enhanced contribution to business solution segment.
[3] It is in net cash position of RMB200m which is mainly held in USD, thus reducing the exposure to weakening RMB.
INVESTMENT THEMES:
[1] Its 1H2016 earning per shares is RMB0.15, so last trading price (0.485) translates to P/E ~ 8, dividend yield ~ 2%.
[2] Over past four years, the group managed to deliver high ROE and ROA ~ 10% consistently, which showed strong management and execution on delivering results.
[3] Until 2020, Asia Pacific and global vending machine market is forecast to grow >10% annually. The group is working towards vertical integration and move up the value chain so as to provide one-stop solutions for worldwide clients in future.
PRICE TREND:
The counter has been delivering strong earning results over past two quarters. Strong buying interest was seen on days following the result as well. It's highlighted in June and Aug period below. Uptrend is residing above 0.465. Investor could take position now so as to enjoy potential push from big player next round.
*** Note: Same counter has been mentioned in Chart[22] 2016 ***
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