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Avi-Tech Holdings

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Stagnating

The company was incorporated in 1981 and listed in SGX in 2007. Avi-Tech principally engaged in the semiconductor industry. Its three main businesses are:

  1. Burn-in services 

  2. Manufacturing and PCB assembly

  3. Engineering services. 

Key markets are in Singapore, Malaysia, Philippines, China and USA. 

Financial Performance (FY June)

Avi-Tech best performing years were in FY07 and FY08 with the introduction of high powered burn-in systems for the semiconductor industry. Onset of Global Financial Crisis cut short their advantage and the  loss of a major customer. 

Burn-in and Engineering were major earning drivers up to FY09.

Revenue had been range bound since FY09. Earning did stage a mild recovery with contribution from burn-in and design & manufacturing.

Covid-19 retard the firms earning recovery in FY21 and presently Avi-Tech is attempting to find her bearing to grow earnings. 

Balance sheet is very healthy with cash of $33M and total liabilities of $8M. 

Opinion

Strategically, the company is staying focused on her core competence particularly in the automotive sector. Without visibility of new profit drivers, future earning will remained tied to the semiconductor industry cycle, presently finding its trough. Some analysts are expecting recovery in 2024. 

With cost of money likely to remain elevated in the medium term and China economic recovery challenging; any semiconductor upturn will likely be gradual and choppy. 

Without bold strategic initiatives, earning is likely to remain range bound ... stagnating.

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