High Jump ...

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Spindex started business in 1981 manufacturing components for home appliances. The firm, a subsidiary of UOB Kay Hian was listed in SGX-Sesdaq in 1998 and SGX on Apr-2001.

Businesses are segmented into:

• Imaging & Printing

• Machinery & Automotive

• Others: domestic appliances, consumer electronics, data storage, telecommunication etc.

Manufacturing locations are in Malaysia, Shanghai, Suzhou, Nantong and Hanoi.

Geographical markets span China, Singapore, ASEAN, Europe & U.S.

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Business (FY-June)

Since FY11, revenue had been growing steadily until Covid-19 impacted sales in FY20. Revenue staged a sharp uptick of 37% to $204M in FY21 during the pandemic.

Imaging & Printing increased 48% driven by work-from-home (WFH) demand for office equipments.

Machinery & Automotive jumped 36% on machinery demand and likely forward stocking of components in the automotive sector.

Others increased 31% driven by WFH demand for home appliances and entertainment.

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Revenue in China grew 56% to $84M & 41% mix.

ASEAN grew 39% to $45M with mix stable at 22%.

US/Europe/Others grew 24% to $74M. Mix declined from 40% to 36%.

Singapore continue to see long-term downtrend.

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Gross margin continue to recover from 18.9% low in FY18 to 23.4%.

Net profit for FY21 was $21M or 10.4% net margin.

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1HDec22 revenue grew 10%. Imaging & Printing fell 14%, Machinery & Automotive increased 13% and Others jumped 24%.

Gross margin weakened to 19.4%. Net profit of $8.8M is 8% lower HoH on 8.2% net margin.

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Opinion

WFH driven demand for Imaging & Printing may have run its course and EOL for some products.

Others growth was driven by domestic appliances demand is a surprise. Demand is likely to come from US/Europe which grew 20% HoH while China recorded flat revenue growth.

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Machinery & Automotive growing 13% in 1H22 appear to indicate rate of growth is slowing in this sector.

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The next few quarters could be challenging for the business given China property market slowdown and lockdown with growing Covid-19 spread. War between Russia & Ukraine is causing energy price rise, supply-chain disruption and substantial inflationary pressure, hence impacting demand.