Karin Analysis

What it does

1. Distribute electronic components and cables.
2. Provide integrated circuit application design solutions to electronic manufacturers.
3. Provide computer data storage management solutions and services.
4. Distribute consumer electronic products in China. (Apple Inc products, something like epicenter)

Financials

Please note that all figures are reported in HKD. Divide by 6.25 to convert to SGD.

Why buy?
1. Karin's Revenue been increasing. Please note that Karin has recently gone into distribution of Apple products, a high revenue, low margin business (not necessarily bad! lots of business to be made!)

(Total revenue of Karin for 5 years starting from 2008 on the right)

 2. Karin's Operating Income has also been increasing significantly over the years.

(Net income of Karin for 5 years starting from 2008 on the right)

3. Dividends has been stable and relatively high. 2012 dividends works out to be about 5% p.a. (price at $0.32)

(Dividends per share of Karin for 5 years starting from 2008 on the right)

4. Cash has been consistently increasing over the years. Cash per share is about $0.06. (About 20% of share price at $0.32)

(Cash + equivalents of Karin for 5 years starting from 2008 on the right)

5. Almost zero long term debt.

(LT Debts of Karin for 5 years starting from 2008 on the right)

6. Equity increasing steadily at a good rate.

(Equity of Karin for 5 years starting from 2008 on the right)

Why not?
1. Although at quite a slow rate, number of shares has been increasing, diluting shareholder's value.

(Total common shares outstanding of Karin for 5 years starting from 2008 on the right)

Value

1. Book Value per share: $0.37
2. P/E: 7.0

Final Verdict

Although number of outstanding common shares are increasing faster than we would like, Karin has strong income statements, balanced sheets, growth rate and value. Growth in equity overwhelms growth in number of shares. Definitely worth considering.