S$0.17-CWOT.SI
Management said that a major solar customer Solyndra LLC has filed for bankruptcy in the US.
As at 31 Aug ’11, the company still owes them S$832,000, undelivered inventories stands at S$403,000 and production equipment bought specifically for them has a net book value of S$459,000.
Cheung Woh will be recording contingent losses of S$1.7mln in the company’s upcoming 2Q ended Aug ’11.
Despite the above, management expects to remain profitable for the quarter. This implies that operating profit would be more than S$1.7mln. Year ago profit was $2.4mln, while quarter ago profit was $2.9mln.
Being a major and fast growing customer of Cheung Woh in the solar segment, management would have to find a replacement fast to pluck the hole.
Cheung Woh had recently announced that they are divesting their controlling interest in their automotive business in China to refocus on their hard disk drive and solar businesses.
At 17 cents, market cap is $53.22mln and the stock has halved from its 52 week high and is not far off from its 52 week low of 15.5 cents hit on 19 Aug ’11. Trailing PE is 3x.
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