D&O (7204) - D&O Target Price 80sen.
去年10月，帝與鴻以1100萬令吉，收購了其馬六甲廠房毗鄰的一片地皮和工廠，作產能擴充用途。
鄭慶漳披露，所收購的工廠狀況並不很理想，但該公司無意拆除重建，而是把現有廠房的辦公室搬遷到這工廠，騰出現有廠房的空間，可擴大生產線。
值得一提的是，帝與鴻旗下的統明亮光電科技私人有限公司（ Dominant Opto
Technologies），在2015年吸引到晶元光電入股。統明亮以6485萬令吉的價格，發出1100萬新股予晶元光電，佔統明亮擴大後股權的10%比重，而帝與鴻的持股則從68.71%，降低至61.84%。
晶元光電是全球最大的LED廠商之一。鄭慶漳表示，引進晶元光電，有助于帝與鴻進一步擴充汽車LED業務。
「晶元光電提供給我們很多幫助，包括設計、零件供應等，甚至在爭取車商的供應合約方面，有了晶元光電這個靠山，也事半功倍。」
除了雙方的互補效應，晶元光電的入股也對帝與鴻的估值產生影響。大眾投行分析員曾發布報告，指晶元光電的參股價格意味統明亮的價值為6億5000萬令吉，而以帝與鴻的61.84%持股計算，相等于每股39仙，佔了該股目前股價（約40仙）的97.5%。
D&O [7204] - A wise move into automotive LED
Recently we witnessed the bull run of JHM and IQGROUP. JHM went up from
RM1.40 to RM2.00 (+42%) in just 3 months; IQGROUP, one of our T&G
stocks, up from RM2.22 to RM3.00 (+35%) in just 3 months as well. If you
ask me, I would think that LED industry could be the next big thing
since many of the traditional lighting are slowly being replaced by LED.
According to LEDinside report, the LED industry is expected to expand
on a CAGR of 15% from US$2.93bil to US5.2bil in 2020. Hence, for those
who are looking for long-term investment, LED industry is definitely one
of the safest bet amid the uncertainties the world is experiencing.
D&O Green Technologies (or simply D&O) operates primarily in semiconductor industry providing services of OEM, ODM and OBM in automotive, general lighting, backlight unit and sensor applications. Majority of its customers are located in the Asian markets, making up more than 65% of its total revenue, where 20% of its revenue is coming from the European customers, and on top of that, we could observe that the U.S. customers are doubling from mere 5% to almost 10% of its revenue in its latest quarterly report.
In terms of sales, 70% come from the automotive segment, 29% from general lighting and 1% from backlight units for televisions. In the recent years, D&O's key earning contributor, Dominant Opto Technologies, has emerged as a renowned automotive lighting supplier in major European and American countries. D&O manufactures LEDs for automotive dashboard backlight, electric windows, signal lights on car gear sticks, exterior automotive signal lights, stop lights and may venture into developing headlights in the future. According to PublicInvest Research, D&O has about 10% market share in the automotive interior lighting segment and its LED can be found in major car brands such as Volkswagen, Mercedes-Benz, Hyundai, Kia and Chinese car makers.
In the current LED market, it is dominated by international players
such as Osram and Lumileds and majority of the headlight manufacturers
are using these large brands, but D&O on the other hand, is actively
pursuing the market shares in the taillight sector that is less
competitive. As revealed in D&O's latest company direction, the
management has pointed out that they are shifting their focus away from
the highly competitive and volatile non-automotive segment and drilling
their attention into the higher margin automotive segment.
As we could see here, the profit margin for D&O is fairly low even coming back from three consecutive years of losses. The profit margin has gotten slightly better (which is still pretty low IMO) only in 2015 when they begin to concentrate in the automotive segment.
D&O Green Technologies (or simply D&O) operates primarily in semiconductor industry providing services of OEM, ODM and OBM in automotive, general lighting, backlight unit and sensor applications. Majority of its customers are located in the Asian markets, making up more than 65% of its total revenue, where 20% of its revenue is coming from the European customers, and on top of that, we could observe that the U.S. customers are doubling from mere 5% to almost 10% of its revenue in its latest quarterly report.
In terms of sales, 70% come from the automotive segment, 29% from general lighting and 1% from backlight units for televisions. In the recent years, D&O's key earning contributor, Dominant Opto Technologies, has emerged as a renowned automotive lighting supplier in major European and American countries. D&O manufactures LEDs for automotive dashboard backlight, electric windows, signal lights on car gear sticks, exterior automotive signal lights, stop lights and may venture into developing headlights in the future. According to PublicInvest Research, D&O has about 10% market share in the automotive interior lighting segment and its LED can be found in major car brands such as Volkswagen, Mercedes-Benz, Hyundai, Kia and Chinese car makers.
As we could see here, the profit margin for D&O is fairly low even coming back from three consecutive years of losses. The profit margin has gotten slightly better (which is still pretty low IMO) only in 2015 when they begin to concentrate in the automotive segment.
Although profit margin remains low, what we could see here is that the
PBT has increased year-on-year since 2013 and the most recent annual
report has shown that the PBT in 2015 was more than double the previous
year.
Even in its latest quarterly report, it was reported that although the
revenue was lower due to their deliberate shift in business direction,
the gross margin rose to 23% in 3Q16 (3Q15: 20%), bolstered by a
favourable change in sales mix and a strengthening US Dollar against the
Malaysia Ringgit. Speaking of the exchange rate, I am pretty sure that
many of you here are aware of the depreciation of our local currency
recently. As a net beneficiary of the strong US Dollar, it is believed
that D&O may achieve an even better revenue in the near future since
Malaysia Ringgit is forecasted to remain volatile and weak this year.
In terms of its financial position, D&O has turned from a net debt
position into a cash-rich company after the disposal of 10% stake in
Dominant Opto Technologies to Epistar, one of the world’s largest LED
makers. Epistar is Taiwan's leading LED manufacturer and this
partnership has so far brought in more sales and orders to D&O due
to Epistar's prestigious status in the LED industry.
D&O broke above the resistance of RM0.41 with high volume to close
up 3.5 cts @ RM0.435 on 3/3/2017. DMI & Stochastic are bullish.
MACD is touching the Golden Gross.
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D&O (7204) - D&O Target Price 80sen.
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