Tuesday, September 21, 2010

CIMB Report on Elec & Eltek - September 2010

I continue to like E&E. The Company has been reporting record high quarterly net profit since the recovery from the global economic crisis. As a shareholder, I am happy with the generous dividend that the company consistently pays out and the fact that major shareholder has been buying the Company share in the open market whenever the price dip.

Here's an except from the latest report from CIMB Securities:
Top of regional peers on various measures. E&E has consistently delivered above industry average returns and attractive dividends (in good times and bad). Based on 2Q10 results, E&E continues to rank among the top PCB firms by margins, ROEs, and dividend yields. GP margin was 23.2% in 2Q10, 5.1% pts above the industry average of 18.1%. Annualised ROE was about 20.6% vs. the industry average of 12.4%. It was also one of the few PCB firms to dish out interim dividends, of 15 US cts per share, annualised into yields of more than 11%.


Directors buying shares in open market again. In the wake of its 2Q10 results, two directors have been scooping up E&E shares again in the open market, in an apparent vote of confidence in the company.

There used to be more sell-side analyst reports on E&E but now, I think Jonathan Ng from CIMB Securities is the only one left. Through all these years, he has maintained outperform rating for this Company.

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