Fischer Tech

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Finally some signs of life from Fischer Tech. Small float, in current market condition, deeply undervalued, good chance it will translate to big upward movement by a single medium investor putting some money into it. Fuyu has gone up too much to be attractive, there is probably some meat left but not much.

Fischer Tech, Sunningdale, Fuyu. In order of attractiveness. All of which I worked with before many many years ago Smile
Not companies I would own long term but right now they are back from the dead, and looking to be in excellent shape.
You guys may wish to have a 2nd look at them.

Full-year result for FY16 (ended 31Mar16) is due by 31May16. I am hoping for at least a total payout of $0.05/share in final & special dividends - similar to the last FY15's total payout of $0.01/share, before the 5-into-1 share consolidation completed on 1Sep15.

Perhaps it is also timely to revisit the 1H (ended 30Sep15) result.....

Apart from its proven positive FCF track record and rock-solid B/S, and the twice-yearly dividends, Fischer's steadily expanding Automotive plastic parts business - which is expected to hit $150.0m in revenue in this FY16 - is the most noteworthy.
5cts is not too much for ask for. In all probability, they will likely give out 5ctns.
Being a smaller/more niche player, they are able to pick and choose the better customers they wish to serve.
This is in contrast to the bigger players who dont have a lot of choices for orders to keep their machines busy.

I like Fischer tech(for now). Cautiously optimistic in the near term. Circumstances could change.
I also like how they conduct their business, i.e. a tiny sales office in AMK.
Automotive/Medical/Industrial products, which forms a significant part of Fischer Tech's customer base, tend to have better margins and longer product life cycle.

Very very pleased Smile
Probably one of lowest valued company.
Rock solid balance sheet.
Great free cash flow generating ability.
Excellent dividends.
fantastic result indeed

surest bet for me
Fischer Tech is planning to increase the group's strategically important production space/capacity in PRC now mainly based in Suzhou.....

Quite obviously, this would be for mainly the group's strategically important and fast-growing Automotive plastic parts business. This point is evident from the breakdown of revenue and geographical information provided in the latest FY16 (ended 31Mar16) full-year results.....
Refer to toe's post 15/07/15

Automotive is not an easy area to get in. Requirement/qualification of parts is difficult. There are also different tiers of suppliers. It is unlikely that Fischer tech supplies to Tier One companies as they are just supplying parts and not complete assemblies/modules for now. There is a still a lot of room to grow. Now I suspect they are trying to widen the moat and get into the higher value add parts/assemblies or maybe supply more than just one commodity(plastics) alone. It's a long journey but the good news is that the relationship is often very sticky(if they dont screw up), it is almost impossible to change a supplier while the project is running without incurring huge cost.

Lots of challenges ahead. lets see how they are able to execute their plan. To put things into perspective, a top automotive parts supplier in Europe can hit revenues of Eur 40B. Fischer is Sgd 180M now.Of course it may take decades or they might fail trying but at least we have some perspective on the industry.
Fischer hit all-time high at $1.475 this afternoon backed by steady buying. Very nice indeed!
Probably some European money flowing into Singapore market?
The toughest thing to do is have to wait for the opportunity patiently.
This old announcement (dated 18Jul16) is interesting.....

It is quite amazing that Fischer-Tech is able to buy a large - GFA of approx. 42k sq.m. built on a land plot of approx. 33.3k sq.m. - ready-for-use industrial property located in Suzhou New District, Suzhou City, Jiangsu Province, PRC, with an assessed market value (in Jun16) of RMB98.98m (approx. $20.09m), for only RMB56.0m (approx. $11.37m), or at a 44% discount!

I wonder whether in this instance Fischer-Tech is able to account for the differential value of approx. $8.72m on this capex transaction in the group's P&L, or perhaps just directly into the group's equity as a reserve item. Would fellow forumers familiar with the appropriate accounting treatment for such transactions like to share your views here?

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