Tai Sin Electric has announced their 1HFY22 Financial Results on 14th February 2022. Tai Sin Electric makes up 9% of my wife’s stock portfolio. It has been 3 years since I took a look at Tai Sin Electric’s performance and I am curious whether the company is performing well or under performing.
A quick check shows that Tai Sin Electric’s business segments remained unchanged over the years. The five business segments are:
1. Cable & Wire
The Cable & Wire segment designs, develops, manufactures and trades electrical power distribution products. Products include Power, Control, Instrumentation and Fire Resistant & Flame Retardant Cables and Busbar Trunking Systems, which are used in all areas of electrical and instrumentation installation for commercial, residential, industrial and infrastructure projects.
2. Electrical Material Distribution
The Electrical Material Distribution segment includes distribution of electrical products.
3. Test & Inspection
The Test & Inspection segment includes laboratories for tests, experiments and researches and provision of quality consultancy services.
The Switchboard segment includes manufacturing and dealing in electrical switchboards, feeders pillars and components
How has Tai Sin Electric fare after so many years? Let me take a look at its 1HFY22 financial results.
For the six months ended 31 December 2021 (“1H22”), Tai Sin Electric reported revenue of $174.839 million. This was an increase of 29.79% from $134.711 million in the last corresponding period ended 31 December 2020 (“1H21”). The increase in revenue was from all the Group’s segments except for the Switchboard Segment.
The Cable & Wire segment posted a revenue increase of 34.05%, up $26.383 million from $77.482 million to $103.865 million. The higher revenue was attributed to Singapore and Malaysia’s C&W segment which was driven mainly by the increase in copper prices and higher sales volume. The increase during the period was because of low base effects given the slow resumption of business activities after the Circuit Breaker Period (“CBP”) and Movement Control Order (“MCO”) in 1H21.
The Cable & Wire segment in Vietnam was affected by the business disruption amid the strict lockdown imposed as COVID cases soared during the first quarter of the current financial period. Business activities in the country gradually resumed after strict lockdown rules were lifted in the second quarter of the current financial period.
The Electrical Material Distribution segment registered a revenue of $52.987 million. This was a growth of $11.854 million which is 28.82% higher than $41.133 million in 1H21. The higher revenue from the Electronic Cluster and Building & Infrastructure Cluster was sustained by global demand for semiconductors and semiconductor equipment and resumption of construction activities.
The Test & Inspection segment revenue grew by $2.036 million from $13.355 million to $15.391 million in the current period. The increase in the T&I Segment was largely due to higher revenue from the non-destructive testing and heat treatment services in Indonesia as new contracts were executed and higher testing services carried out in Singapore. It was
partially offset by lower revenue contribution from Malaysian operations as fewer sizeable new contracts were secured.
Revenue from the Switchboard Segment decreased by 5.29%, a decline of $145,000 to $2.596 million. This was a consequence of COVID-19 national partial lockdown measures implemented in Brunei during 1H22.
Profit Before Tax
Even though Revenue increased, Tai Sin Electric’s profit before income tax decreased by $10.913 million to $10.288 in 1H22 from $21.201 million in 1H21.
The C&W Segment’s PBT for 1H22 decreased by $11.491 million from $15.644 million to $4.153 million. This was mainly attributable to the provision for onerous contracts, fair value adjustment on derivative financial instruments and lower grants extended by the Singapore government in view of the COVID-19 pandemic.
The EMD Segment’s PBT increased by $1.472 million from $3.736 million to $5.208 million, moving in tandem with higher revenue.
The PBT from T&I Segment and Switchboard Segment however declined by $856,000 and $58,000 respectively.
Lower PBT from T&I Segment was mainly the result of lower grants accounted for from the Singapore government in 1H22.
The cash and cash equivalents at the end of the period decreased to $30.517 million compared with $39.329 million at the end of the previous financial year.
Current Dividend Yield
Based on current share price of S$0.39 and FY21 payout of 2.25 cents, this translate to a current dividend yield of 5.77%.
Summary of Tai Sin Electric 1HFY22 Financial Results
- Revenue increased by 29.79%.
- Stronger cash flow of $30.517 million as compared to 3 years ago.
- S$0.75 cent per ordinary share was announced and will be paid on 8 March 2022.
- Consistent dividend yield of above 5% over the years.
- Supply bottlenecks and disruptions could continue to constrain logistics and industrial production due to further COVID-19 outbreak.
- The activities in the construction Sector is expected to continue to recover on the
back of the progressive easing of border restrictions on the entry of migrant workers.
- Transformation process in progress to be Industry 4.0 ready and launch new products and services when opportunities arise.