PE – 11

ROE – 23.78%

ROA – 10.7%

Net Profit Margin – 8.45%

FPI, an OEM (Original Equipment Manufacturing) company that specializes in speaker products & musical instrument products, has just posted a decent quarterly report. Revenue at RM 233mil & PAT at RM23mil, annualize revenue is expected to surpass historical level of RM800mil & annualize profit is expected to surpass RM60mil for FY 31Dec2021.

Looking into FPI’s book, after spending some CAPEX on upgrading and expanding their factories in 2017-2018, nothing much had been spent on the production facilities. Started 2019, they had seen satisfactory increase in revenue and profit, which were recorded at RM 766mil & RM42mil respectively. Moving into 2020, the revenue was recorded at RM765mil & profit at RM 52mil. That was a reasonable 20% annual growth since 2018 which to me was considered a decent growth.

One thing to emphasize in their balance sheet is the cash holding level which stands at approx. RM240mil. This, to me, is definitely a trait that shows a good management with sense of uncertainty that the company has. This is especially important in the current situation where pandemic is still ongoing. If spent wisely, this cash reserve can bring shareholders a decent return.

On top of the cash pile, FPI has been declaring good dividend to reward its shareholders. The latest declaration of dividend was back on 25Feb2021. On 14sen dividend, dividend yield stands at 3.85%, which was not really lucrative but something. Do not forget capital gain on holding of FPI’s shares.

Another thing to emphasize is FPI’s major shareholder (28% holding), Wistron Corp, a Taiwan listed company that produces top-tier ICT products including speakers. So we know why FPI always has stable orders from customers.



Moving on, FPI management had stated in the Prospect of the quarter report, it read “the Board of Directors expects the Group to achieve profitable results for the financial year ending 31 December 2021 on the back of prevailing sales orders.” Even though this not a very confident shout out, I believe the management is just being “low profile”.

Lastly, will the management expand their production further or even move into other PCB segments or products to bring FPI into a greater height? This is something that I think shareholders and investors at large is waiting to see. With the current cash pile, I believe option is more than problem.


All in all, valuation at PE 11, is not an expensive valuation. When valuation isn’t expensive, the odds of winning will of course become high.

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