Posted on September 3, 2009 - by kevinscully

Company visit to AVI Tech…..encouraging performance and better outlook but visibility remains poor

I accompanied our analyst on a company visit to AVI Tech last week after the release of their Q4 2009 results. Calendar Q1-2009 was the worse and the business has improved in calendar Q2-2009 was double calendar Q1-2009. Full year 2009 earnings came in within expectations. Read the report by our analyst Chee Keong – he has raised his fair value price to S$0.28 per share.

Like most companies, business was badly affected but has since improved. Q1 and Q2 2010 are its better quarters and the business has picked up but the visibility remains poor. The S$50mn or so cash is still there and this is one of the main attractions of AVI Tech to me. The cash enables it to ride the storm if there is another downturn and also to look for new investments or acquisitions. I still like the stock but its very poor liquidity means investors have higher exit risks. Other than this, i believe accumulating at current levels offers investors a decent upside on a six month view. Read more…

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