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Good comments, but don't be put off by the illiquidity. For long term, fundamental investors, illiquidity is your friend. A number of academic studies now suggest that you get rewarded for illiquidity as the market is even more inefficient in illiquid stocks as hedge funds and large institutions won't touch them even when they can see the quality and the undervaluation.
And the lack of broker coverage is also a positive. Just look at Epicentre. Anyone living in Singapore in the past five years has known that store in Wheelock Place is jam-packed, and must be coining it, yet it took a note from the excellent Terence at DMG to get the stock flying in January. When Techcomp produces some blow out earnings later this month (I predict), it'll finally pick up some broker coverage, and you won't see the price in the 40s any more.
The key to Techcomp is for them to get their manufacturing right, while not messing up on the Yen from their Hitachi distribution business (the explanation for their disastrous 2008). All their acquisitions in Europe over the past couple of years ought to put them in great stead.
Generally speaking: Good fundamental analysis counters are illiquid nature in SGX market. From this phenomenon alone, It is strongly indicated SGX is an unstable speculative South East Asia equity market!
We need improvement in SGX market mechanism!!!
crclk15 ( Date: 31-Jan-2011 20:55) Posted:
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Techcomp looks interesting.
1. Consistent track record of growing revenue and net profit at 20% CAGR since 2002
2. Growth of manufacturing division (higher margins) to outstrip that of distribution in the next few years
3. Acquistions to contribute positively in 2011 onwards
4. Other growth initiatives such as its JV with SPSIC for the manufacture and distribution of analytical balance products in China. Expects to turn profitable in 2011
5. Recent increase in stake from Kabouteur Mgmt LLC. It has increased its stake gradually since Apr 2008.
6. Cheap valuations vs peers
Drawbacks
1. Illiquidity - Ave 30D vol is about 129 lots only
2. Insufficient analyst coverage
Do refer to my writeup on Techcomp (with elaboration) on my remisier blog ernestlim15.blogspot.com This writeup has also been republished on sharesinvestment as well as nextinsight. Do drop me an email if you want to know the value added services which i can provide.