Wednesday, 29 October 2014

GTRONIC: The Future Is Still Bright

GTRONIC FY14Q3 Financial Result

GTRONIC (RM mil) FY14Q3 FY14Q2 FY14Q1 FY13Q4 FY13Q3
Revenue 91.1 90.6 83.4 78.5 79.5
PBT 21.8 20.8 17.0 15.0 18.6
PBT% 23.9 23.0 20.4 19.1 23.4
PAT 17.7 17.3 14.1 13.1 15.2






Total Equity 298.3 291.4 272.4 275.2 285.8
Total Assets 362.9 361.2 325.9 338.8 343.8
Trade Receivables 65.9 70.3 60.6 62.4 60.0
Inventories 15.2 13.4 11.1 14.2 17.2
Cash 167.8 169.5 141.0 147.3 148.8






Total Liabilities 64.6 69.8 53.5 63.6 58.1
Trade Payables 16.3 17.2 9.9 18.4 15.6
Other Payables 31.4 32.1 29.8 34.3 32.6
ST Borrowings 8.1 11.5 9.9 5.2 4.8
LT Borrowings 0.0 0.0 0.0 0.0 0.0






Net Cash Flow 20.7 22.6 -6.3 41.5 42.2
Operation 52.4 34.5 13.2 87.5 62.3
Investment -17.0 -10.9 -7.1 -11.2 -9.4
Financing 14.7 -1.0 -12.3 -34.7 -10.7






EPS 6.31 6.17 5.04 4.73 5.51
NAS 1.06 1.04 0.97 0.99 1.03
D/E Ratio net cash net cash net cash net cash net cash


Gtronic's FY14Q3's revenue & net profit are marginally higher by RM0.5mil & RM0.4mil QoQ respectively.

Nine months revenue of RM265.1mil is 9.1% better than RM242.9mil in the corresponding period last year, while net profit improves 24.3% from RM39.5mil to RM49.1mil in the same period.

This is definitely a good result but I actually expected more, as I remember the management mentioned last year that the second half of FY14 will be much better due to shipment of new products to new customers.

Anyway, previously I expected first half of FY14 to be relatively flat but it turned out to be a decent first half.

Gtronic plans to spend as much as RM50mil in FY14 for capital expenditure. So far its cash flow from investment stands at RM17mil. There is still no news regarding any merger or acquisition.

Currently smartphones dominate the market and I feel that wearable devices and some health-related apps & sensors (eg. heart rate, ECG, blood pressure, O2 saturation, blood sugar level etc) will be the next area of growth.




In the near future when someone has chest pain, he or she will place the sensor on his/her chest and send the ECG tracing via smartphone to doctor. 

It seems like Gtronic is keeping up with the pace in the fast-changing technology world by venturing into healthcare wearable market early. Hopefully it can continue to grow and give good dividends in the future.

I'll keep my own target price for Gtronic at RM4.48 base on estimated FY14 net profit of RM70mil and PE 18x, despite "traditionally" weaker Q4. 


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