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Thursday, January 14, 2010

Notion Vtec (RM3.32): Still cheap, worth accumulating now

Much has been written about Notion Vtec by Salvatore Dali in his posts, so I won't repeat here again.

Notes:
  • Resilient and high net margins in the range of 22%-25% since IPO in 2005
  • Net profit to rise to about RM60mil in 2010 from RM36mil in 2009
  • PER'09 and '10 at 12.9x and 7.8x respectively
  • Nikon to hold 10% of Notion Vtec, further establishing Notion's business with Nikon and elevate Notion's branding among clients.
  • Earnings growth expected to be strong from anticipated gains in market share.
  • Backed by its earnings growth, high net margins, high ROE, higher reputation and Nikon as a shareholder, it has no business trading at PER'10 of 7.8x. Share price could potentially reach PER of 12-14x, breaching RM5.00 mark.
  • Share base of 140.7 mil only, rather easy to nudge up the share price.
  • Market Cap: RM467.2 mil
  • Expected Div Yield: 3-4%, decent.
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