Update on 27 Jul: The Signify (formerly Philips Lighting) 2Q2018 results are out today. The Home division which is the Smart LED lighting Q2 sales is about the same low level as Q1 which was due to the high inventory levels in US retail. The good news mentioned in the results is the high inventory levels "have now return to normalized levels."
So we should expect Valuetronics Q1FY19 CE sales to remain poor but should improve from Q2.
Attended the AGM today. Was glad to find out that the drop in ICE revenue in the 4QFY18 was due to the Chinese New Year holidays and not due to a drop in orders. This would mean the next quarter's results should see ICE revenue going back up. The Chairman, Mr Tse confirmed that they have started supplying to the second automaker and they are the only supplier. You can consider the sales to the automakers as an economic moat due to the tedious qualification process.
There was no update on the Smart LED lighting sales except that the CFO revealed that Smart LED makes up 20 to 25% of total 2018 revenue. Would need to lookout for Philips Lighting results later this week.
At the start of the AGM, they showed a video of their production automation. It was quite impressive as there were no operators present at the line. The Chairman has reveled that the production line for two products are fully automated. I believe this would further reduce Valuetronics cost.
Another good news is that the management has gone over the items on the US Tariff List 1, 2 & 3 and concluded that the impact to Valuetronics would be insignificant. I am confident that my earlier price target of $0.95 can be achieved this year baring a full fledged Trade War caused by Trump.