Spindex Industries

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High Jump ... 

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. 

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.

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. 

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. 

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.

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

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

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.