Friday, October 4, 2013

XMH : Turbocharged engines of growth (NRA)

XMH Holdings.
Current Price S$0.41
Fair Value S$0.49
Turbocharged engines of growth

 Earnings below expectations. 1Q14 net profit of S$2.7m was 9% below our expectations, mainly due to lower-than-expected revenues from its distribution business segment.

 Maintain forecasts and fair value. Despite earnings just slightly below our forecasts, we believe the group should be able to make up for it in the next few quarters with its strong order book of S$70m as at 1Q14. Newly acquired Mech-Power Generator Group (MPG) will begin contributing meaningfully from 3Q14. We maintain our fair value at 49 cts, pegged to 12x FY14 PER. Potential catalyst could include another acquisition to widen its production range. We continue to like the group's stable cash generating business and consistent dividend pay-out. We maintain our Overweight recommendation.


 Year of open doors to growth. 2013 was an eventful year forXMH. . To recap, first it acquired its new location in Tuas to house its warehouse and workshop facilities for its expanding in-house brand of power generators. Then, it had its first major institutional investor, Credence Capital take a 19.9% stake in the group. XMH then acquired MPG to expand and develop its non-marine sector. Without any debt and a cash stash of S$45.5m, the group is in a favourable position to acquire another company to supplement its product range.

 Turbochargers of growth. As we see it, growth will come organically and through further acquisitions. It is building up its in-house brands of power generators and propulsion systems (ACEGEN and IPS) as well as providing strong after-sales services, resulting in high repeat sales which averaged more than 70% over the past three FYs. XMH order book is S$70m while MPG is S$40m, mostly to be recognized in FY14. Acquisitions will contribute to the second leg of growth. Already MPG will be contributing at least around 20% of net profits in FY15 and assist in strengthening its nonmarine business segment. Even without any further acquisitions, our estimates of earnings growth averages an impressive 26% per year over the next three years, implying a FY14-16 PER of 10.5x, 8.5x and 7.7x, respectively.

 Revenues decreased 2.5% yoy to S$21.4m mainly due to the decrease in its distribution business segment. Gross profit margins decreased 4.5% pts due to sales of lower margin products from the distribution business.

 Strong balance sheet. The group generated positive free cash flow of S$2.4m for 1Q14. As a result, its net cash increased from S$43.3m as at end April-13 to S$45.5m as at end July- 13.



Source/Extract/Excerpts/来源/转贴/摘录: NRA-Research,
Publish date: 02/10/13

No comments:

Post a Comment

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock