DATE : 05 February 2021
UCHI TECHNOLOGIES BERHAD (UCHITEC)
Current Price : RM2.93
Target Price : TP1 = RM3.20
TP2 = RM3.50
Call Warrant : UCHITEC-CI (0.11 sen)
WHAT KIM SAY?
“UCHITEC is debt free and has not had any debt for past 5 years. Therefore it does not need to be covered by operating cash flow.”
“Do you believe it? – Kim
WHY I PICKED THEM AS MY NEW GEMS?
I like is because of:-
1. Return On Capital Employed (ROCE) Trending
– UCHITEC has not disappointed in regards to ROCE growth. Found that the returns on capital employed over the last five years have risen by 68%. That’s not bad because this tells for every dollar invested (capital employed), the company is increasing the amount earned from that dollar. In regards to capital employed, UCHITEC appears to been achieving more with less, since the business is using 24% less capital to run its operation. If this trend continues, the business might be getting more efficient.
2. Uchi Technologies Berhad’s Earnings Growth And 40% ROE
– UCHITEC has a significantly high ROE. It also has some positive aspects to its business. Especially the growth in earnings which was backed by an impressive ROE. Still, the high ROE could have been even more beneficial to investors had the company been reinvesting more of its profits.
3. Zero Debt & Cash Rich
– UCHITEC is debt free and has not had any debt for past 5 years. Therefore it does not need to be covered by operating cash flow.
WHO ARE THEY?Board of Directors
Chairman – Charlie Ong Chye Lee
Managing Director – Chin Yau Meng
Executive Director ( Both Taiwanese)- Kao, De-Tsan also known as Ted Kao- Huang, Yen-Chang also known as Stanley Huang
Senior Independent Non-Executive Director- Charlie Ong Chye Lee
Independent Non-Executive Directors- Tan Boon Hoe- Lim Tian How
WHAT THEY DO?
Uchi Technologies Berhad an investment holding company, engages in the design, research and development, manufacture, and sale of electronic control systems in Europe, the Asia Pacific, and the United States. It offers 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 displays, high precision light measurement equipment, mixed signal control systems for centrifuge/laboratory equipment, mixed signal microprocessor based application, and system integration products, as well as electronic modules.
The company also engages in the assembly of electrical components onto printed circuit boards (PCB); and trading of electric modules and saturated papers for PCB lamination. In addition, it develops software programming, hardware design, and system construction of original design manufacturing products. The company serves multinational companies in the consumer and industrial electrical and electronic appliances industries. Uchi Technologies Berhad was founded in 1989 and is based in Prai, Malaysia.
1. Product DesignBy transforming product ideas through innovative solutions from our experienced, inspiring and productive design team into worldwide recognizable commercial products, Uchi is your technical partner to walk you to the top.
2. Construction and Tooling DesignBy maximizing production yield and cost-efficiency as goals in our design, we have been able to provide our customers the optimized construction and tooling designs that meet the specifications and requirements.
3. Software + Micro Controller + ASIC SolutionsSpecialised in Sensing Circuits, Control Circuits, Touch Sensing Solutions, Optical Sensing Solution, Inverter Control Solution, Power Factor Correction Solution, Software + uC, ASIC Solutions
Integrating software, micro controller and custom-made ASIC based hardware has been recognized to be a cost effective way of providing better user interfaces, excellent processing capabilities and design flexibilities in commercial and industrial products. Uchi has gained its reputation over the years by empowering our customers’ products, either a fully automatic coffee machine or a precision weighing scale, with our seamlessly integrated Software + Micro Controller + ASIC solutions.
4. Display Modules SolutionsSpecialised in LED Dot Matrix Displays and TFT Display Modules Solutions
By providing a broad range of display solutions, whether a single LED or a complete controller-based display module,Uchi has been successfully helping our customers to bring better views and images of their applications to the world.
5. Manufacturing ServicesWith customers and partners ranging from household appliance makers to industrial product manufacturers, Uchi has been delivering OEM and ODM services with satisfactory results for products like fully/semi automatic coffee machines, electronic modules, bio-tech instruments, precision/industrial weighing scales, LED displays and has been able to maintain long term relationship/partnership with our valuable customers/partners. All our products are manufactured to lead-free production requirements and standards.
1. Art-of-living – High-end household and professional appliances.UCHI designs and develops electronic control systems to serve clients producing fully automated coffee machines. Their clients include Jura (Swiss), Nestle (Swiss), Krups (German), and Bosch (German). About 75% of control modules that UCHI produces are exported to Jura. UCHI is the sole supplier of control modules to Jura.
2. Biotech – Biotechnology product applications.UCHI develops and manufactures products for laboratory and industrial instrument applications such as precision weighing scales, deep freezers, centrifuges, and pipettes. Their clients include Sartorius Group, based in Germany (FY2019 Revenue was €1,827m), and Eppendorf, a leading life science German company.
3. ODM and Original Equipment Manufacturing (“OEM”)UCHI involves in-house design and development of electronic control systems, manufacturing, and delivery of systems. This segment makes minimal contribution to the Group.
UCHITECH – Confirmed breakout with volume. Support level between RM2.80 – RM2.89.
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