Uchitec - Research (2019)

on

Counter : UCHITEC - 7100

Market : KLSE

Background :

Uchi Technologies Bhd is primarily an original design manufacturer (ODM) specializing in the design, research and development, and manufacture of electronic control systems such as software development, hardware design, and system construction. Manufacturing segment engages in making touchscreen advance display, high precision light measurement equipment, mixed-signal control system for centrifuge equipment, mixed-signal microprocessor-based application, system integration products and electronic modules.

2 Major Product for Revenue:

  • Real-time centralized energy measurement and control system, high precision hot fluid temperature control system and ultra-low temperature and mass sensing control system for bio-chem equipment 
  • Touch screen advance display, high precision light measurement (optoelectronic) equipment and mix signal control system for centrifuge laboratory equipment
Product/Service's Revenue 2018(RM,000) 2019(RM,000) 2020-till Q2(RM,000)
hot fluid control system 109,697 138,492 58,381
optoelectronic 28,946 15,956 2,519
others 1,323 2,224 374

Strength :

  1. Low Debt
    2. - So far no debt observed on Uchitec as of 2020 Aug.
  2. High ROE (Return on Equity) and High (Net Profit Margin)
    3. 2015 (%) 2016 (%) 2017 (%) 2018 (%) 2019 (%)
    ROE 21.4 % 22.1 % 29.8 % 45.8 % 46.8 %
    NPM 43.8 % 45.9 % 51.6 % 49.3 % 48.5 %

    *Higher NPM are due to one of its subsidiary companies, Uchi Optoelectonic (M) Sdn. Bhd. was granted pioneer status by the Ministry of International Trade and Industry (MITI) for the design, development and manufacture of real-time centralised energy measurement and control system, high precision hot fluid temperature control system and ultra-low temperature and mass sensing control system for bio-chem equipments. Revenue generated under this pioneer status are tax-free. However this status started five years commencing from January 1, 2018 and need to be renewed.

  3. Strong cashflow
    4. Year Free Cash Flow (RM,000)
    2015 50,707.0
    2016 58,522.9
    2017 74,009.6
    2018 58,810.0
    2019 86,216.2
  4. Consistent and stable growth financial data

Risk :

  1. Sales mostly in Europe region and impacted by Covid-19 pandemic
    2. - This will be a huge concern as biggest revenue come from Europe. Anyway with strong Free Cash Flow, i believe Uchitec can survive thru the pandemic. Revenue growth this year might be bad, but it will come back in future.
  2. US-China Trade war
    3. - Unpredictable what will happen if escalated. Anyway most revenue is from Europe. Impact should be less.

Annual financial data:

Income Statement:
Product/Service's Revenue 2015 2016 2017 2018 2019
Revenue(RM,000) 112,611 120,896 136,585 139,967 156,673
Revenue yoy growth(%) 18 % 7.4 % 13 % 2.5 % 11.9 %
PBT(RM,000) 50,382 57,086 72,147 72,542 79,044
NP(RM,000) 49,297 55,507 70,501 69,009 75,948

Revenue Segmentation by Region:
Region 2015 2016 2017 2018 2019
Europe(RM,000) 107,340 114,152 131,617 132,496 148,098
Asia Pacific(RM,000) 4,282 5,878 4,213 6,692 6,674
US(RM,000) 988 865 754 779 1,899

Disclaimer : This post is for record and research Purpose. Not Buy and Sell Advice. Please do own study before making any purchase decision.

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