Dutech Holdings Limited (CZ4.SI) is a leading global manufacturer of high-security products. The company sells safes for Automated Teller Machines (ATM) in the banking industry, safes for commercial and residential purposes, cash handling systems and intelligent terminals.[mepr-active membership=”1734″ ifallowed=”show” unauth=”message” unauth_message=”Please login or purchase a membership to view full text.”]
Dutech has operations in China, North and South America, Europe, Asia-Pacific and Africa. With its UL- and CEN certified products Dutech serves customers such as Hitachi, Wincor Nixdorf, Liberty Safe & Security Products Inc., Tractor Supply Co., Costco Co., Glory Ltd., SGI, Bauhaus, Schaefer Shop, Trumpf, and Amada. The company has manufacturing and service facilities strategically located in China, Germany, USA, and the Philippines.
Dutech was founded in 2000 and is based in Shanghai, but incorporated in Singapore and listed on the mainboard of SGX since 2007. Shares can furthermore be traded in Germany.
With the acquisition of a partly struggling, companies in Germany in the last years Dutech bought know how at reasonable prices in order to broaden its market base and to penetrate the growing market for intelligent terminal with products such as gaming, ticketing, and self-service machines. The latest acquisitions have been Deutsche Mechatronics GmbH in 2014, a German manufacturer of intelligent terminals and visual quality control machines, and Krauth Technology GmbH in 2015, a German manufacturer of auto-ticketing and money changer devices. Another acquisition of the insolvent METRIC, a German solution provider of ticketing systems, mobile data collection systems and parking machines, was just announced last month. Self-service machines (ATMs, kiosks, vending machines) are expected to become an 84bn USD market globally by 2021 with growth rates of 9% annually.
With a staff of 655 employees, Dutech generated revenues of 590m RMB (87m USD) and a profit before tax 68m RMB (10m USD) for the first six months of 2016. An increase of 14% and 21% respectively compared to the same period a year ago. In 2015, the company improved revenues by 14% while profits fall by 8% compared to the year before. Dutech shows a healthy balance sheet with an equity ratio of 69% and a debt to equity ratio of only 45%. Cash and equivalents have been 286m RMB (42m USD) at the end of June.
Dutech’s shares are in an uptrend since January and gained almost 75% this year. The company is currently priced at seven times earnings, which is well below industry average. We expect to see 30-50% higher price levels with a successful restructuring and consolidation of its latest acquisitions in the next twelve months.
AIS Rating: ★★★★☆
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 H1 only |
|
|---|---|---|---|---|---|---|
| EPS (RMBcents) | 10.2 | 11.3 | 28.2 | 40.6 | 33.1 | 15 |
| Change | -44% | 11% | 149% | 44% | -19% | 20% |
| P/E | P/E SECTOR |
P/B | P/CF | Equity Ratio* |
ROE | Debt/ Equity** |
Div YLD |
|---|---|---|---|---|---|---|---|
| 7 | 18 | 1.1 | 5.3 | 69% | 19% | 45% | 2.1% |
* Equity / Total Assets, ** Total Liabilities / Equity
[/mepr-active]
