Better prospect for Sanichi

KUALA LUMPUR: SJ Securities Sdn Bhd said Sanichi Technology Bhd (Sanichi stock code 0133), has better prospect with its revenue expected to jump by a staggering 171.26% to RM116.1 million in 2018.

The broking house rated the technology company as overweight, which means the capital appreciation and dividends of the stock is expected to exceed 15% over 12 months.
In the research report, SJ Securities said:“We have an overweight rating on Sanichi with a target price of RM0.140 with an estimated FY17 EPS of 1.74sen and forward PER of 8x, with a potential upside of 75.0% against market price of RM0.080 at the time writing. We anticipate impressive growth for Sanichi over the next couple of years weighing on sustainable demand for plastic injection mould and additional contribution from the property segment.”
The report also pointed out that at RM0.08 a piece, Sanichi is trading at 187.5% below its NTA value per share of RM0.23.
In the Financial Overview, the research found that Sanichi’s top line (or revenue) soared 91.1% in FY15, from RM22.41 million in FY14 to RM42.84 million. Sanichi’s revenue escalated at 114.6% 3-year CAGR from year 2013, when the Group returned to the black.
The Group’s profit after tax (PAT) excluding extraordinary items increased more than two-folds from RM2.28 million to RM9.23 million.
Core EPS also recorded an impressive 51.2% 3-year CAGR. (note: The above Financial Overview has omits the one-time expenditure on Employee Share Option Scheme (ESOS) of RM6.24 million recognised in FY2015 for better comparability.)
The report predicts a moderate 17.52% increase in revenue for FY16, amounting to RM50.3 million.
However, the revenue is expected to jump by a staggering 171.26% to RM116.1 million in 2018.

Company background
Sanichi is a public-listed company in Malaysia which has two segments. The first segment manufactures precision plastic injection mould and also design and fabricate precision moulds and tooling.
Their products ranged from cosmetic parts for vacuum cleaner, washing machines, refrigerators, printers, air-conditioners, medical equipment and others) to mechanical parts (pulley motors, gears, bearings, feed rollers and clampers among others.
Sanichi has a portfolio of 110 customers, comprised of both local & foreign corporations spanning across various industries.
Some of their big clients include BMW, Audi, Mercedes, Toshiba, Panasonic and Hitachi among others. However, the automotive sub-segment is currently the largest revenue contributor. Sanichi is also multi-national company which has presence in China, Germany, France, Indonesia, Japan, Mexico, Singapore, Spain, Thailand and Vietnam.
Sanichi ventured into the second segment in 2014, namely property investment and development.

More revenue after doubling of manufacturing capacity
The research reported that Sanichi’s manufacturing segment has 130,000 sqft manufacturing facilities with 40,000 sqft built-up area. It has an annual capacity of 240 moulds at a value of RM21.6 million. The maximum plastic injection mould size is able to cater up to 1,600 tonne injection (20 tonne for mould weight).
Currently, STB manufacturing arm is running at 100% capacity, therefore STB has been relying on sub-contractor to help fulfil the Group’s excess orders. To cater to the excess demand, Sanichi is building a new factory which aims to double its operation capability by end of this year.
New constribution from Property Development
The report also highlighted that Sanichi is planning to officially launch its maiden project, Marina Point in 2H2016. This RM197 million GDV project is a freehold mixed development located in Klebang, Malacca, occupying 93,345 sqft, comprises of 352 residential units and 120 commercial units, strategically located near the Malacca Gold Coast. The property is provided with swimming pools, gymnasiums, sky bars, parking podiums, along with 24-hour security and also CCTVs. It is neighbouring upcoming tourist attractions such as the iconic Resort Theme Park, 30 acres of government-led Green Park, and Cheng Ho Free Trade Centre.
Despite the soft property market, the Marina Point project in Malacca is expected to spark the interest of potential buyers after it has delivered about 20% bookings during its soft launch, due to its attractive pricing and lower entry barriers for foreigners to purchase properties in the state.

More development and value ahead
Other than Marina Point, Sanichi also has project worth RM864 million GDV in the pipeline. The S Residences, is a residential and commercial project located on 8.87 acres freehold land at Segambut. It will most likely commence construction in year 2017. The project is expected to contribute positively to Sanichi’s earnings, but currently the project’s contribution hasn’t been included in this research report forecast yet until more details are made available.

Very strong net cash position
Finally, the research house prompted that Sanichi has a net cash position in FY15, mainly attributable to the substantial repayment of its borrowings. As at FY15, STB has only RM2.17 million of unsecured restructured term loans, after settling RM8.70 million restructured term loans. The net cash reserve of Sanichi stood at RM17.3 million as of 3Q FY16, and it is set to increase again after its recent renounceable rights issue which has successfully completed on 29 July 2016 and raised RM62.95 million.

PCA Ruling: Why it is not good for Asean to let China win


China is adamant that it’s historical rights must be respected, saying in many of its literature that the Islands it occupies within the invisible nine-dash line in the South China Sea (SCS) are historically Chinese.

While many across the world would sympathise with China over its claims for ‘historical’ rights, most of the world today are do not really want to apply such rights especially in cases bygone by time and lost or forgotten by centuries of inaction.

The question to ask China is whether they want to claim the coastal lines of countries where they ‘once in history’ landed with their sailing vessels?

And would that include places where there is the recorded history of their arrival and their establishment as a ‘visiting’ commercial and military force in the dark ages of humanity?

If historical rights were to be respected and enforced, would that not give some countries and the remnants of some monarchies long gone with time, the right to come back and claim their historical rights on territories that have since then thrived into modern cities? Kazi Mahmood

Singapore comes to mind.

It was once a relaxed, almost lazy place where Muslims were ruling and were the only ones living on this Island. Some say it was called Temasek and it had a Raja or King, and that the British came and destroyed that peaceful entity to create what is now Singapore.

If China would want its right based on some point of time where its sailors landed on the Spratlys and other Islands in the SCS as the basis for its current bullying of the Asean nations, it will have to accept that Singapore should be returned to its rightful owners.

It will also mean that the world would have to remove all the Palestinians from their current enclaves and place them somewhere in the Middle East in order to satisfy Israel’s historical claims.

Then we will have the situation in the United States of America. The world will have to remove all the Whites, Blacks, Hispanics and whoever else intruded into the lives of the so-called Red-Indians. This will do justice to a race massacred by humans not so long ago!

And does that not mean Australia would have to be returned to the aborigines, and the world would have to be cut in such a way that whites should be in Europe, Blacks in Africa, Yellows in China, brownies in their original states, and Arabs only in the Middle East?

As rogue as North Korea?

Henceforth, China has to be made to understand that it cannot defy the current international justice order. True, China has reasons to doubt the international court of justice. For sure it is not going to recognise such a court that could also ‘trample’ on its leadership in order to give justice to the people of the country!

But if all countries with nuclear powers were to defy the international order, would they not be seen as rogue as North Korea?

Personally speaking, if China wins with its argument that its historical rights are sacred and must be respected and it would force the world into such respect, then I should also be able to go back in time and claim the land where I come from.

The Mongols would kick me out. The Iraqis would surely IED my claims, and India would also say what is by-gone, is by-gone.

I would never win my case. Then why should China win?

But China will win, in the end, because of the lack of acumen among some of the Asean states who are giving in to China on the salient historical rights, not thinking of their own historical rights but think of the big bucks the Chinese communist party is showering them with.

I am not anti-China, As a matter of fact, I believe all countries have rights in the South China Sea. But I also do not believe China can just come over and take what is not it’s own disrupting the livelihood of the people in the coastal regions it is infringing.

And I believe only a united Asean – one where Cambodia for example – would not go against its peers in the grouping and would sign a document with them to get China to understand that a United Asean movement is not going to let unproven historical rights take precedence.

Letting China win will allow Beijing to control the seas where trillions in trade are ferried to their destinations. It may trigger the end of the Asean’s seafarers routes, and it may also trigger the beginning of the end of the golden financial era in Southeast Asia.

No, we should not go back in time!

Asean: Unity and Peace After The PCA Ruling


ASEAN, as a grouping, was given a boost with the Permanent Court of Arbitration (PCA) ruling which ruled that China had no legal basis in its claims over the South China Sea (SCS) bordering the countries of the Asean.

The ruling was rendered by a five-person PCA bench, and this has since then become an occasion for Asean to break away from the usual statements of condemning Beijing for its distortions of facts in the SCS.

The decision now allows the Asean to go a step further, by bringing Asean countries together to decide on the future of the region as a whole.

Asean leaders and ministers of the foreign affairs from the Asean countries has so far shown some degree of unity in delivering statements on the SCS, but in the end, the organisation has yet to show its capacity in handling security issues in the region.

The celebration of the ruling by the Hague court echoed across the Asean region, particularly in places like Hanoi, in Vietnam, where the conflict raised negative sentiments against Beijing.

The Philippines and four other Asian governments (including Vietnam) also claim much of the same South China Sea areas that China claims. The South China Sea spans 3.5 million square kilometres from Taiwan to Singapore. It is a vital trade route, and it is salient that all parties involved in the SCS sit together and decide its future with a peaceful resolution of the issues at stake.

Asean: Unity and Peace

Worldfuture Organisation, a non-governmental organisation striving for regional peace and a conflict-free Asia, is organising a forum that will focus on Asean, unity and peace. The main aim of the event is to inform the general public on the progress in resolving the SCS dispute after the PCA ruling, and on why Asean should remain united and strong in order to have enduring peace and prosperity in the region.

This event, to be held at the Sime Darby Convention Centre in Bukit Kiara, will deliver a message to Asean member states. It will be a message of peace and unity, which we, at Worldfuture, believe is salient for the resolution of the issues affecting the SCS.

The PCA Ruling

The forum will discuss the role of Asean in finding the path toward a peaceful resolution of the SCS conflict, after the PCA verdict.

The verdict was clearly against China’s historical rights claims in the waters bordering the South China Sea and the Chinese southern coasts. It altogether eliminated the ideas behind the Nine-Dash Line drawn by China. But the reality of the situation, in the seas, does not mean the conflict is over after the PCA ruling.

In fact, it calls for Asean to take a stance and to stand up as a united grouping in order to try resolve this issue without any delay.

The Event

  1. How to achieve unity in Asean over regional issues, such as the SCS
  2. The respect of international law, and the respect as well as the welcoming and acceptance of the PCA ruling by all parties
  3. The militarisation of the SCS by China and foreign powers: How Asean can handle this situation?

The event will feature speeches on the media’s views on the SCS, the PCA ruling and the Asean media in welcoming the ruling.

The aim is to inform the Malaysian public of the real issues in the SCS and the role the Asean need to play as a united group to ensure peace in the region.

Asean: Unity and Peace will take place on Tuesday, from 5pm to 10pm.

The Speakers

The keynote address will be delivered by former Minister of Foreign Affairs Tan Sri Syed Hamid Albar, whose experience in dealing with conflicts is appreciated throughout the Asean.

Among the speakers will be Bunn Nagara from the Institute of Strategic and International Studies Malaysia will also be among the speakers, Prof Abu Bakar Osman from the University of Malaya and the former president of the Malaysian Bar Council, Raghunath Kesavan.

Other speakers from Vietnam and Malaysia will also speak at the event, which is an important one in the wake of the recent events in the SCS.

Tran Huu Duo Min from the Diplomatic Academy of Vietnam, will speak on Vietnam’s role in the peaceful resolution of the SCS conflict.

Online portal chief editor Kumaran Pillay will speak on how the region’s media interpreted the PCA ruling.


Worldfuture is a non-government organisation dedicated to anti-war and peace activities in the region. Its past events include forums on Nato and its policies in Asia, and on World War II, which were previously held at the KLCC Convention Centre.

Worldfuture was founded by Kazi Mahmood, a journalist with more than 35 years of experience, who is currently the Business Editor of Malay Mail. The organisation was founded in 2004.

For more details, and to attend the event, call: 0169223786