Introducing Cheung Woh
Cheung Woh Technologies Ltd manufactures and supplies precision hard disk drive (HDD) components. The company operates through two segments, HDD Components and Precision Metal Stamping Components with HDD Components being the core segment at 84.5% and 73.7% of FY16 group revenue and profit before tax respectively. The company has factories in Zhuhai, China and Johor and Penang, Malaysia. After Armstrong was delisted in 2012, Cheung Woh, to my knowledge, remains as the only listed supplier of HDD components in the Singapore stock market.
It’s Perception as an Undervalued Gem
As of 10th June, Cheung Woh trades at a market capitalisation of SGD62.0mn. Based on its FY16 results, this corresponds to a 0.55x P/B, 6.9x P/E and 3.2x EV/EBITDA. The company also gave out SGD4.5mn of dividends in FY16 which is a 7.3% dividend yield at current share price. ......
