The following is my take on Aztech.

                                                          FY 07               FY 06        Change %

Revenue                                           268,310          238,997           +12.3

Net Profit                                           18,177            20,038           -9.3

Gain on Property Sale/                        3,499               1,030           

Revaluation

Net Profit from operations                14,678              19,008         -22.8

The above figures show that the company is facing a margin squeeze. If we strip out the gains made from property transactions (gains from sale of property in FY06 and gains from property revaluation in FY07), the margin squeeze is more severe than meets the eye.

Share buy back is placed in treasury??..9,793k as of 31 Dec 07. Outstanding share option is 11,819,600. So, I don?t expect that the share buy back will help to improve the eps in future.

There are 103.8 million outstanding warrants (conversion at 51 ct)?..but at current share price, this will not be a dilutive factor.

From FA parameters (based on 26 ct share price):

EPS (FY07)                          -  4.45 ct????P/E 5.8X

EPS (less prop transactions) ? 3.59 ct ????P/E 7.2X

NAV                                     - 21.86 ct ???.P/B 1.19X

Yield (FY07)  1.75 ct           -  6.73%

Conclusion:

The FA parameters look attractive but margin squeeze remains a problem.

Caveat emptor

I have a vested interest in this stock. I have followed the stock since 1997 and seen it recovered in the early days. 1 cent to be paid out on 2^nd May. A 3.6% returns for 3 months is not bad. I am going to accumulate 1000 lots at around 0.25 to 0.28 for the next 1 month. The company is accumulating the shares at 0.26 to 0.265 up to a total of 10.5 million shares as of 15^th Feb.

Full Year Financial Highlights
FY07(S$'m)
Turnover 268.31
Gross Profit 46.33
Gross Profit Margin 17.3%
Net Profit After Tax $18.18m
Net Margin (%) 6.8%
EBITDA 31.29
Basic EPS (cents) 4.45
Dividend (cents per share) 1.75cts
Interim 0.75cts
Final 1cts (to be paid out on 2nd May ~ 3.6% returns for 3 months based on the share price of $0.26)

Good value for money and decent return for 3 months of investment.

12th Feb SGX announcement
Aztech Systems Ltd ("Aztech") wishes to announce that its wholly owned subsidiary, AZ United Pte. Ltd. has secured a contract for the supply of construction material.
The Contract, which is projected to be executed in three stages is worth a total of approximately S$250 million for the overall procurement and supply of the material over a period of three (3) years. The first stage is valued at S$23 million, to be executed over a
period of six (6) months. The first delivery is expected to commence by the end of March 2008. The subsequent two stages of the Contract valued at S$92 million and S$138 million respectively are to be executed upon confirmation from the buyer should the
preceding stages progress satisfactorily. The Group expects the abovementioned project to have a positive impact on its revenue
and earnings per share for the financial year ending 31 December 2008 and 2009.

Year to Date orders (as of 4th Feb) $109.09 million + $23 million

Summary
Healthy Business Model

• Well spread product offering

• Wide spread customer base

• 
  
  Diversification into new business sectors

• Healthy net cash position

• Good track record of dividend payment

• 
  
  Enhance shareholder value with share buy-back practices,amounting to a total of 9.79 million shares worth S$3.65 million in 2007 alone. Total Accumulated shares buy back on 15th Feb 2008 is 10.218 million shares.

• 4 continuous years of increase in turnover

• 20 consecutive quarters of profitability

• 
  
  Broadband and home networking industry is vibrant and continues to grow

• Venturing into the supply of construction materials with order book of $23 million

• 
  
  New products range in the remote control model planes