INNOTEK

GOOD CALL BY KEVIN SCULLY. STOCK IS NOW UP 2 C AT 45.5. Dividend yield is still more than 10%, i think. www.nextinsight.net/content/view/2135/60/

Quite a good buy. InnoTek has been doing a lot of daily share buyback, which is a very positive signal.

Good one with high dividend yield, still at 10.99%. That is, 5 cents dividend divided by 45.5 ct stock price. No point trading, in my opinion. Just buy and hold.

InnoTek bought back another 200,000 shares today at 44.5 cents. The total to date is 12.495 m. This is a positive for minority shareholders. Of course the company is not dumb. Instead of keeping cash in the bank earning 0.5%, it might as well buy back its own shares and obtain 10.5% yield! The shares are entitled to 5 cent a share dividend soon.....

Buy Innotek? No way.... Fellow forumers, I read the article published as well as the comments by the few members. I just like to play Devil Advocate and give a few reasons why I would not touch this stock. Hope it does not offend anybody. 1) Examine the sales of Innotek for the past 4 quarters and you find a consistent S$90+m. Good news? not really if you compare them to similar technology listed companies like Venture and Armstrong. These other companies have seen a recovery in sales in 3Q and 4Q. What this is telling me; is that the Company has not been winning new programs / orders and in fact could be losing market share to competitors. 2) Turnround in profitability is reason to celebrate but the turnaround has been largely credit to reduction in operating costs. Gross Profit is lower but Operating Profit has improved vastly due to reduction in SG&A costs. How much more can you squeeze from the cost structure? Hence I disagreed with Mr Kevin Scully\'s upgrade of earnings. The Company has not shown improvement in the quality of earnings. 3) Interest income of 600k seems low especially when you have a cash hoard of S$100 million. Seems to me that the capital management portion is not efficient at all. 4) Distributing high dividends is good BUT when your EPS is substantially lower than your DPS, distributing high dividends only serve to deplete your NTA. Moreover, if the Company really has good expansion plans, management should be keeping cash for capex requirements. We want to see a growing company, not a company sitting on its cash reserve and doing nothing. 5)Mr Yong is a capable person in the field of finance. He was after all the ex-CFO of the Company. But can he bring in new orders for the Company? Can he provide the strategic direction for the Company? In the cut-throat world of metal stamping and precision assembly, you need the necessary industry network and know-how to stay ahead. As such, I am reserving my comments on him as a CEO. I have a hunch that the share price may correct after . Currently, the Company is doing share buyback on a daily basis. This is great news for shareholders in the short term. In the long term, I would be looking out for announcements on new customers, new contract wins and especially development in their China plant. Good luck to all Innotek shareholders.

One last point, somebody should ask the management about the labour issue in China now. I spoke to several analysts and understand that China factories, esp in Shenzhen in River Delta area are facing labour shortage. You will be surprised but these farmers from the poorer provinces are not returning to the cities as they can find jobs which pay lower but nearer to their homes. So they prefer to stay at home and take up these jobs. Many manufacturing companies are badly affected by this. Even as orders come in, they cannot take it as they have no additional manpower. This issue was not discussed in the report.