Vitrox q3 2013

Page 1 of 46
Stock Code:
Current Price:
NA Symbol
Latest FY:
12/31/2012
2012
VITROX
1.21
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VITROX CORPORATION BHD

(VITROX)
12/6/2013
Financial Year:
Price:
Board:
Industry:
Ownership:
2012 31-Dec-2012
1.21
Main Board
TECHNOLOGY
- Corporate Owned (Local)
Latest Quarter:
Stock Category:
FBMKLCI:
Sub-Sector:
9/30/2013
Fast Grower
NO
INDUSTRIAL AUTOMATION SYSTEMS
AND PRODUCTS
L. C. Chong is NOT an investment advisor nor a financial advisor, and no

information provided here is to be interpreted as a suggestion to buy or sell
securities.
All figures in thousands of Ringgit Malaysia except per share values and ratios
Click here to understand definition of some financial terms
Prepared by:
L. C. Chong
L. C. Chong
Website:
Page 2 of 46
http://lcchong.wordpress.com
TOMATION SYSTEMS
ordpress.com
L. C. Chong
Page 3 of 46
Income Statement
Profit & Loss
Revenue
Cost of Goods Sold
Gross Profit
Other Operating Income
Operating Expenses
Operating Income
Net Finance Costs
Other Non-Operating Income
Income Before Taxes
Income Tax Expense
Profit from Discontinued Operations
Net Income
Non-controlling Interests
Net P/L To Shareholders
L. C. Chong
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L. C. Chong
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Balance Sheet
Total Current Assets
Cash and Equivalents
Investments
Inventory
Accounts Receivable
Others
Total Long-Term Assets
Property, Plant & Equipment
Accounts Receivable
Equity and Other Investments
Intangible Assets
Deferred Tax Assets
Other Non-Current Assets
Total Assets
Total Current Liabilities
Short-Term Debt
Accounts Payable
L. C. Chong
12/31/2005
12/31/2006
12/31/2007
12/31/2008
12/31/2009
12/31/2010
12/31/2011
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23.6%
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Page 6 of 46
Investments
Dividends Payables
Others
Total Long-Term Liabilities
Long-Term Debt
Investments
Accounts Payable
Deferred Tax Liabilities
Others
Total Liabilities
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Shareholders' Equity
Paid Up Capital
Share Premium
Accumulated Earnings
Other Reserves
Non-Controlling Interests
Total Equity
Total Equity and Liabilities
L. C. Chong
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Page 7 of 46
12/31/2012
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L. C. Chong
Page 8 of 46
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L. C. Chong
Page 9 of 46
Cash Flow
Cash Flow
12/31/2005
12/31/2006
12/31/2007
12/31/2008
12/31/2009
12/31/2010
12/31/2011
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Depreciation & Amortization
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Investment/Asset Impairment Charg
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Cash on Disposals of Businesses
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Cash on Disposals of Investments
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Cash on Disposals of PPE
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Provisions
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Investment Incomes
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Net Unrealised Forex Gain/Loss
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Other Non Cash Charges
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Other Adjustments
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Accounts Receivable
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Inventory
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Accounts Payable
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Other Working Capital Changes
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Interest (Paid)/Received
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Tax (Paid)/Refunded
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Dividends/Investment Income Received
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Other Operating Cash
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Investment in PPE
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PPE Reductions
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Acquisitions, net
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Purchases of Investments
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Sales/Maturities of Investments
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Dividend/Interest Received
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Other Investing Activities
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Net Cash From Financing Activities
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Debt Issued
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Debt Repayment
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Common Stock Issued
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Net Cash From Operations

Income Before Taxes
Adjustments for:
Working Capital Changes
Net Cash From Investing Activities
L. C. Chong
Page 10 of 46
Common Stock Repurchased
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Dividend Paid
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Interest Paid
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Other Financing Activities
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Net Cash
L. C. Chong
Page 11 of 46
12/31/2012
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L. C. Chong
Page 12 of 46
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L. C. Chong
Page 13 of 46
Quality
Profitability
12/31/2005
12/31/2006
12/31/2007
12/31/2008
12/31/2009
12/31/2010
12/31/2011
12/31/2012
CROIC 15%
17.5%
42.2%
57.0%
44.7%
5.7%
98.8%
10.6%
25.4%
ROIC 15%
12.6%
29.0%
42.6%
29.8%
6.0%
72.1%
27.0%
19.7%
Gross Profit Margin 40%
78.6%
70.2%
72.1%
75.8%
71.1%
61.9%
56.6%
61.1%
Net Profit Margin 10%
100.9%
39.6%
39.9%
31.5%
10.7%
36.3%
28.1%
23.1%
FCF/Sales 5%
53.9%
43.6%
40.2%
36.1%
8.1%
38.2%
8.6%
23.8%
Financial Health
12/31/2005
12/31/2006
12/31/2007
12/31/2008
12/31/2009
12/31/2010
12/31/2011
12/31/2012
Cash Conversion Cycle
188.2
145.9
134.8
174.3
226.2
72.4
169.7
247.7
Debt Coverage (FCF) 100%
187.9%
44014.3%
78.9%
168.2%
Debt/Equity < 80%
9.3%
0.1%
0.0%
0.0%
0.0%
0.0%
8.9%
11.0%
Growth
12/31/2005
12/31/2006
12/31/2007
12/31/2008
12/31/2009
12/31/2010
12/31/2011
12/31/2012
Revenue
9,130
24,000
36,169
26,413
18,134
87,609
79,203
88,871
YoY
#VALUE!
162.9%
50.7%
-27.0%
-31.3%
383.1%
-9.6%
12.2%
3-Y Avg.
#VALUE!
#VALUE!
68.8%
4.8%
-34.5%
60.0%
73.7%
0.7%
5-Y Avg.
#VALUE!
#VALUE!
#VALUE!
14.7%
19.0%
27.7%
39.0%
10-Y Avg.
#VALUE!
#VALUE!
9,216
9,499
14,427
8,324
1,941
31,813
22,226
20,490
YoY
#VALUE!
3.1%
51.9%
-42.3%
-76.7%
1539.4%
-30.1%
-7.8%
3-Y Avg.
#VALUE!
#VALUE!
22.4%
-6.6%
-100.3%
67.0%
121.9%
-22.0%
5-Y Avg.
#VALUE!
#VALUE!
#VALUE!
-32.5%
4.1%
22.1%
42.4%
10-Y Avg.
#VALUE!
#VALUE!
2,712
5,609
14,033
14,414
2,912
20,889
10,492
3,077
YoY
#VALUE!
106.8%
150.2%
2.7%
-79.8%
617.4%
-49.8%
-70.7%
3-Y Avg.
#VALUE!
#VALUE!
82.2%
47.2%
-78.6%
18.6%
64.1%
-95.8%
5-Y Avg.
#VALUE!
#VALUE!
#VALUE!
10.9%
10.6%
-2.1%
-18.1%
10-Y Avg.
#VALUE!
#VALUE!
4,919
10,459
14,522
9,543
1,462
33,462
6,798
21,170
YoY
#VALUE!
112.6%
38.8%
-34.3%
-84.7%
2188.2%
-79.7%
211.4%
3-Y Avg.
#VALUE!
#VALUE!
54.1%
-4.6%
-114.8%
62.7%
76.8%
-22.9%
5-Y Avg.
#VALUE!
#VALUE!
#VALUE!
-25.2%
0.3%
-2.6%
31.3%
10-Y Avg.
#VALUE!
#VALUE!
Net Profit
Net Operating Cash
Owner Earnings
L. C. Chong
Page 14 of 46
3-Y Avg.
5-Y Avg.
29.9%
23.2%
33.7%
23.3%
59.8%
64.9%
28.6%
24.0%
19.8%
18.7%
3-Y Avg.
5-Y Avg.
169.7
174.3
115.2%
115.2%
8.9%
0.0%
Multi-Year Performance
12.2%
32.4%
23.4%
-7.8%
7.9%
13.1%
2.7%
32.9%
4.2%
38.8%
24.8%
-1.2%
L. C. Chong
Page 15 of 46
Latest Rolling 4 Quarter Results

40,000
35,000
5.13
30,000
4
25,000
3.24
20,000
2.8
15,000
10,000
1.77
5,000
0
0.2
Sep-12
Dec-12
Mar-13
Turnover
L. C. Chong
PER SHARE VALUE (CENTS)
Jun-13
Sep-13
Net Profit
Page 16 of 46
0
EPS
Latest Rolling 4 Quarter Results

40,000
35,000
5.13
30,000
4
25,000
3.24
20,000
2.8
15,000
1.77
10,000
5,000
0
PER SHARE VALUE (CENTS)
0.2
Sep-12
Dec-12
Mar-13
Turnover
Jun-13
Sep-13
Net Profit
0
EPS
Sep-13 Performance
Slightly stronger-than-expected 9M13 top line of RM77.6m was translated into a core net profit of RM18.8m,
within expectation as it accounted for 71.7% of HLIB full year estimate._x000D_
_x000D_
In 3Q13, ViTrox registered revenue of RM36.3m (+52.4% yoy, +28.0% qoq), EBITDA of RM11.8m (>+100% y
>+100% qoq), and normalized PATAMI of RM11.9m (>+100% yoy, +83% qoq)._x000D_
_x000D_
3Q13 revenue gained strongly on the back of demand surge for ABI products which expanded 105% yoy and
qoq. The increase was mainly due to significant increase in sales recorded for Advanced X-ray Inspection (AX
System._x000D_
_x000D_
Top line growth has spurred 3Q13 EBITDA margins to improve significantly by 17.1-ppt yoy and 12.5-ppt qoq
32.5%._x000D_
_x000D_
The improved performance has led ViTrox to believe that the demand for their products will be sustainable fo
remaining of the year. ViTrox will continue to focus on market expansion activities, customer relationship buil
product innovation and prudent cost management.
L. C. Chong
Page 17 of 46
Economic Moats
Economic Moats: No
Cost Advantage
Switching Costs
Network Effect
Intangible Assets
Efficient Scale
L. C. Chong
Page 18 of 46
Economic Moats
Economic Moats: No
Cost Advantage
Not available or no moat found
Switching Costs
Network Effect
Intangible Assets
Efficient Scale
L. C. Chong
Page 19 of 46
Valuation
Discounted Cash Flows Valuation
Refer Appendix 2
3-Y
5-Y
Good 12%
Base 8%
Bad 4%
Ugly 0%
Good 12%
Base 8%
Bad 4%
Ugly 0%
Good 12%
Fair Value
1.58
1.44
1.32
1.20
1.67
1.48
1.31
1.16
1.82
Buy Under
1.16
1.06
0.97
0.89
1.23
1.09
0.97
0.85
1.34
Actual M.O.S.
23%
16%
8%
-1%
28%
18%
8%
-5%
33%
Growth rate applied in Reverse DCF to reach the current stock price (1.21):
2%
Refer Appendix 3
EY% Valuation
EY% HI
EY% LO
Err:508
Err:508
Buffer
Buy Level
10%
13.96%
Sell Level
R4Q-EY%
6.66%
9.35%
Buy Under
Sell Above
Actual MOS
R4Q-EPS
FY13-EPS
FY14-EPS
0.113
0.113
0.121
0.81
1.70
28.82%
0.81
1.69
28.58%
0.87
1.82
33.64%
*Check out App 6 - EY% Chart
Katsenelson Absolute PE
Refer Appendix 5
Fair P/E
16.14
L. C. Chong
Fair Value
Buy Under
Actual M.O.S.
1.83
1.35
33.75%
Page 20 of 46
10-Y
Base 8%
Bad 4%
1.52
1.12
21%
L. C. Chong
Ugly 0%
1.28
0.94
6%
1.08
0.80
-12%
Page 21 of 46
Strategy
Portfolio Strategy:
Lump Sum + Top Up
Portfolio Execution:
- Buy and Monitor
Averaging Down
Method:
Buying Basis:
- Dollar Cost/Value Averagi

- Sum of Digits Laddering
EPS QoQ Growth > 15%

Price is below Intrinsic Value (DCF)
Price is below Intrinsic Value (EY%)
Price is below Intrinsic Value (Absolute PE)
Price is below Intrinsic Value (ERM)
Price is below Intrinsic Value (DY%)
Stock price breaks out of consolidation/dip on an uptrend.
Company owner/directors, and major fund institutions heavily buying
Selling Basis:
SELL06;SELL07;SELL08;SELL09;SELL
Quarterly EPS drop for 3 consecutive months.
Price has risen too far from its intrinsic value (DCF)
Price has risen too far from its intrinsic value (EY%)
Price has risen too far from its intrinsic value (Absolute PE)
Price has risen too far from its intrinsic value (ERM)
Price has risen too far from its intrinsic value (DY%)
Long term trend changed from bullish to bearish
Company owner/directors, and major fund institutions heavily selling
Fundamental of business turns unattractive or bad (bear cases)

The current price is 30% away from my average holding price.
Other good reasons stated in MorningStar's article.
L. C. Chong
Page 22 of 46
Dollar Cost/Value Averaging

Sum of Digits Laddering
BUY01;BUY02;BUY03;BUY04;BUY05;BUY13
LL07;SELL08;SELL09;SELL10;SELL11;SELL12;SELL14
L. C. Chong
Page 23 of 46
Comments
Profitability
Financial Health
Growth Drivers
L. C. Chong
Page 24 of 46
Risks/Challenges
Valuation
Strategy
L. C. Chong
Page 25 of 46
Comments
Profitability
Except 2009 and 2011, all of VITROX's profitability ratios are above my benchmark._x000D_
- In 2009, the decrease of revenue was attributed to adverse economic situation._x000D_
- In 2011, lower owner eanings was attributed to high capex._x000D_
- Revenue growth is acceptable, but net profit dropped in the past 2 years due to higher operating expenses.
Financial Health
- Very low leverage._x000D_

- Higher Cash Conversion Cycle was contributed by higher days in inventory._x000D_
- VITROX has higher level in raw material and Work-in-progress._x000D_
- I think that due its business nature, consumption of inventories may not fast enough. That's why they nee
allocate allowance for slow moving inventories._x000D_
- Operating cash and owner earnings are not consistently growing because of high capex and higher operatin
expenses in the past 2 years._x000D_
- In overall, their cash position is healthy.
Growth Drivers
L. C. Chong
Page 26 of 46
- In 2013, VITROX successfully expanded our presence to new territories include Japan, Europe, South Americ
and East America, India and Indonesia through our sales team and local channel partners._x000D_
- The new products namely V510G2, V810, TH1000S and TR1000S have been well accepted by many new m
customers around the world, where 30% of revenue was contributed from new customers acquired in the pas
years._x000D_
- High commitment in developing and launching new product:_x000D_
- Examples:_x000D_
1. High-speed vision systems supporting turret (rotary)-based test handlers, with throughput up to 60KUPH
comprising integrated vision systems capable of inspecting mark, lead and package related defects
concurrently._x000D_
2. Launch of new high speed Tray inspection handler (TH1000S) and Tray to Tape & Reel inspection handle
(TR1000S). Both new models will come with enhanced inspection features to handle new IC packages, highe
throughput and better ease of use functionalities._x000D_
3. Enhanced inspection functions (for Tray Handler) include OCR (optical character recognition) capability a
also POP (package on package) 3D inspection using advanced optical setup and software algorithms._x000D
4. 3D Phase shift Profilometry AOI system and side marking inspection capability. _x000D_
5. Release of enhanced AXI platform with multiple form factors that tailors to the need of emerging marke
such as automotive, smart phone and tablet._x000D_
- VITROX strong R&D team who are committed to launch at least three innovative products (one for each
business unit) every 6 months continue to strengthen their leading position in semiconductor component
inspection, 3D Tray IC inspection, AOI inspection and 3D X-ray inspection._x000D_
- In 2012, VITROX successfully filed 5 patents and 1 copyright for our AOI and AXI products._x000D_
- Great efforts in continuously enhancing operations:_x000D_
- Established the manufacturing facilities for the newly launched second generation Advanced Optical
Inspection systems (V510G2), Tray based vision inspection handler (TH1000S) and Tray to Tape & Reel vision
inspection handler (TR1000S) flawlessly upon release._x000D_
- Doubled the manufacturing capabilities of AOI and AXI to support business needs._x000D_
- Successfully developed comprehensive order fulfillment system to optimize inventory purchases while
meeting manufacturing built demand._x000D_
- Expanding supplier base through strategic supplier management processes._x000D_
- Established a centralized quality assurance function to achieve best in class quality in our incoming and
outgoing products._x000D_
- ViTrox has growth potential in the ABI segment with the exit of Agilent from this market.
Risks/Challenges
- FOREX, downturn in semiconductor demand and equipment spending, patent infringement, technology
imitation._x000D_
- ViTrox operates in a highly competitive market and prone to rapid advances in technology.
Valuation
- Fair values from different models:_x000D_
- DCF (5-Y) - 1.48 - 1.67_x000D_
- EY% - 1.69 - 1.82_x000D_
- Absolute PE - 1.83_x000D_
- I think it is fair enough to value VITROX from 1.5 to 1.8, which I enjoy 20% to 34% MOS.
Strategy
- Since VITROX is now undervalued, I will wait for correction or consolidation to accumulate VITROX._x000D_
- It has been shooting up since end of Oct 2013._x000D_
- I missed the boat....
L. C. Chong
Page 27 of 46
Appendix 1 - Discount Rate & Margin of Safety

Discount Rate
Avg. Risk Premium
Avg. Risk Free Rate
Margin of Safety
7.60%
+
3.99%
=
Unadjusted Discount Rate

Business Risk
Financial Risk
Concentrated Product Risk

Concentrated Customer Risk
Litigation Risk
Environmental Risk
Currency Risk
=
Adjusted Discount Rate
Dividend Yield
11.59%
Foreign Political Risk
Initial RRR
Est. Earnings Growth

Unadjusted MOS
Business Risk
Financial Risk
Litigation Risk
Environmental Risk
11.59%
Currency Risk
Self Defined Discount Rate

Adjusted MOS
Discount Rate to be Used
11.59%
Self Defined MOS
MOS to be Used
40%
40%
Err:508
2.77%
7.90%
7.90%
)
26.24%
=
26.24%
26.24%
Appendix 2 - Discounted Cash Flows Valuation

11.59%
26%
Financial Figures
Growth Estimation
OE GR.
Decay Rate Extra Decay

Terminal % (Y4-Y7)
(Y8-Y10)
25%
3%
15%
20%
8%
1822.7995
1402.27275
Intangibles
Intangibles % Add to
Shares Out. 2012 OE
Excess Cash Assets
DCF
231.26
Err:501
43.92
0%
0.00
12.00%
4.00%
0.00%
Projection of Present Value and Fair Value

FV - Future Value; DPV - Discounted Perpetuity Value; PV - Present Value
Yearly GR.
FV
DPV
2013
8%
22.86
245.68
2014
8%
24.69
237.78
2015
8%
26.67
230.13
2016
7%
27.54
212.99
2017
7%
29.42
203.85
2018
7%
31.42
195.10
2019
7%
33.55
186.72
2020
5%
32.34
161.29
2021
5%
34.10
152.40
2022
5%
35.96
144.00
PV
310.09
322.01
333.56
334.18
342.04
349.56
356.76
344.78
348.60
352.21
12%
3-Y:
12%
1.44
12%
5-Y:
10%
1.48
10%
10%
10%
8%
10-Y:
8%
1.52
8%
FV
DPV
23.71
254.78
26.56
255.72
29.74
256.66
31.22
241.44
34.41
238.43
37.92
235.46
41.78
232.52
39.65
197.75
42.89
191.67
46.39
185.78
PV
319.94
342.21
364.55
369.46
386.34
403.01
419.47
401.18
411.09
420.69
Fair Value
Yearly GR.
FV
DPV
4%
22.02
236.58
3-Y:
4%
22.90
220.49
1.58
4%
23.81
205.49
5-Y:
3%
24.20
187.14
1.67
3%
25.02
173.40
3%
25.87
160.67
3%
26.75
148.88
3%
26.24
130.86
10-Y:
3%
26.95
120.46
1.82
3%
27.69
110.88
PV
300.23
302.53
304.67
301.91
302.64
303.31
303.94
296.83
296.48
296.15
Fair Value
Yearly GR.
FV
DPV
0%
21.17
227.48
3-Y:
0%
21.17
203.86
1.32
0%
21.17
182.68
5-Y:
0%
21.17
163.71
1.31
0%
21.17
146.71
0%
21.17
131.47
0%
21.17
117.81
0%
21.17
105.58
10-Y:
0%
21.17
94.61
1.28
0%
21.17
84.79
PV
290.37
283.74
277.81
272.49
267.72
263.44
259.62
256.18
253.11
250.35
3-Y:
1.20
5-Y:
1.16
10-Y:
1.08
B
as
e
8%
Senario
U
g
ly
0%
B
ad
G
oo
12
Fair Value
Yearly GR.
Fair Value
L. C. Chong
Page 30 of 46
Price vs. Intrinsic Value

2.5
1.5
0.5
0
CLS Price
IV (Base)
IV (Good)
IV (Bad)
IV (Ugly)
Appendix 3 - Reverse Discounted Cash Flows

11.59%
26%
Financial Figures
Growth Estimation
OE GR.
Terminal %
25%
2%
3%
Decay Rate Extra Decay

(Y4-Y7)
(Y8-Y10)
15%
Shares Out. 2012 OE

Excess Cash
21.17
231.26
43.92
20%
Projection of Present Value (GR. 2%)

FV - Future Value; DPV - Discounted Perpetuity Value; PV - Present Value
Yearly GR.
FV
DPV
2013
2%
21.59
232.03
2014
2%
22.03
212.09
2015
2%
22.47
193.87
2016
2%
22.42
173.38
2017
2%
22.74
157.62
2018
2%
23.07
143.29
2019
2%
23.41
130.26
2020
1%
22.79
113.65
2021
1%
23.00
102.78
2022
1%
23.21
92.96
PV
295.30
293.05
290.99
284.96
282.34
279.96
277.80
270.66
268.37
266.30
3-Y:
1.26
5-Y:
1.22
10-Y:
1.15
Fair Value
L. C. Chong
Page 32 of 46
Intangibles
Intangibles % Add to
Assets
DCF
0.00
L. C. Chong
0%
Page 33 of 46
Appendix 4 - Excess Return Valuation (Banks Only)

11.59%
26%
Financial Figures
ROE
2012 Book Dividend

Shares Out. Value
Payout %
26%
231
114.45 Err:508
Terminal %
3%
ROE Growth/Decay Rate

Good Scenario
Start ROE
End ROE
Growth
0%
10%
11%
15%
16%
20%
21%
25%
26%
30%
31%
100%
Rate
34%
21%
13%
8%
5%
3%
Bad Scenario
Ugly Scenario
Start ROE
End ROE
Decay Rate
0%
10%
-3%
11%
15%
-5%
16%
20%
-8%
21%
25%
-13%
26%
30%
-21%
31%
100%
-34%
Start ROE
End ROE
0%
10%
11%
15%
16%
20%
21%
25%
26%
30%
31%
100%
Projection of Present Value and Fair Value

Senario
B
as
e
ROE
Book Value
Retained
Earnings
Excess
Return
PV
G
oo
Fair Value
ROE
Book Value
Retained
Earnings
Excess
Return
PV
B
ad
Fair Value
ROE
Book Value
Retained
Earnings
Excess
Return
PV
2013
26%
137.78
2014
26%
165.86
2015
26%
199.66
2016
26%
240.35
2017
26%
289.33
23.33
28.08
33.80
40.69
48.98
58.97
16.19
19.49
23.46
28.24
33.99
476.35
16.19
17.46
18.84
20.32
21.92
275.29
1.55
Err:508
137.78
Err:508
167.26
484.47321
Err:508
204.84
5-Y:
Err:508
253.17
2.09
Err:508
315.89
42%
26%
114.45
23.33
Err:508
Err:508
Err:508
Err:508
Err:508
16.19
21.26
28.07
37.28
49.84
758.50
16.19
19.05
22.54
26.83
32.14
438.36
2.14
Err:508
137.78
Err:508
159.96
669.556552
Err:508
183.65
5-Y:
Err:508
208.68
2.90
Err:508
234.84
58%
26%
114.45
23.33
Err:508
Err:508
Err:508
Err:508
Err:508
16.19
12.04
11.38
10.31
8.85
81.28
16.19
10.79
9.14
7.42
5.71
46.98
0.67
Err:508
137.78
Err:508
158.56
210.669707
Err:508
179.36
5-Y:
Err:508
199.83
0.91
Err:508
220.36
-33%
26%
114.45
23.33
Err:508
Err:508
Err:508
Err:508
Err:508
16.19
10.27
7.89
5.06
2.76
2.16
16.19
9.20
6.34
3.64
1.78
1.25
0.49
0.66
-83%
U
g
ly
Fair Value
ROE
Book Value
Retained
Earnings
Excess
Return
2012
26%
114.45
PV
Fair Value
L. C. Chong
152.85137
Page 34 of 46
5-Y:
Decay Rate
-8%
-10%
-13%
-18%
-26%
-39%
L. C. Chong
Page 35 of 46
Appendix 5 - Katsenelson Absolute PE Valuation

11.59%
26%
P/E for No Growth

Default
Initial P/E
Self Defined
7
Absolute PE
PE Points Lookup Tables

Given
Earnings Growth
Dividend Yield
P/E Adj.
8%
2.77%
13.14
+
3.00
=
Baisc P/E
Business Risk
Financial Risk
Earnings Predictability
Litigation Risk
Environmental Risk
Currency Risk
Fair Value P/E

R-4Q EPS
0.113
Fair Value
MOS
Buy Under
L. C. Chong
Earnings Growth P/E

0%
1%
2%
3%
8
8.65
9.30
9.95
16.14
4%
10.60
5%
11.25
6%
7%
8%
9%
10%
11%
12%
13%
14%
15%
16%
11.90
12.55
13.20
13.85
14.50
15.15
15.80
16.45
17.10
17.75
18.40
17%
18%
19%
20%
21%
22%
23%
18.90
19.40
19.90
20.40
20.90
21.40
21.90
16.14
24%
22.40
25%
22.90
16.14 x 0.113
1.83
26%
1.83 x (1 - 0.26)
1.35
Page 36 of 46
DY%
Add's P/E
0.0%
0
0.1%
0.5
0.5%
0.5
1.0%
1
L. C. Chong
1.5%
1.5
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
10.0%
2.5
3
3.5
4
4.5
5
5.5
6
6.5
10
Page 37 of 46
EY% Chart
2.5
45
40
2
35
30
1.5
25
20
1
15
10
0.5
0
CLS Price
EY%
EY% HI
EY% LO
Appendix 7 - Insider Trading

Last 3 months or last 30 insider transactions
Transaction Date
L. C. Chong
Securities Holder
Type of transaction
11/29/2013 Siaw Kok Tong
Disposed
Disposed
11/22/2013 Chu Jenn Weng
Disposed
Disposed
11/1/2013 Chu Jenn Weng
Disposed
Disposed
11/1/2013 Yeoh Shih Hoong
Disposed
Page 39 of 46
No of securities
Price Transacted
18,800
1.14
496,700
1.00
478,100
0.95
150,800
1.06
314,700
0.90
74,800
0.99
114,000
0.99
L. C. Chong
Page 40 of 46
Ratios/Calculated Values
12/31/2005
12/31/2006
12/31/2007
12/31/2008
12/31/2009
12/31/2010
12/31/2011
Funds From Operations
Net CAPEX
Cash Conversion Cycle
188.2
145.9
134.8
174.3
226.2
72.4
169.7
Days In Inventory
488
175
166
256
298
101
197
Days In Receivables
273
128
114
122
110
50
92
Days Payable Outstanding
573
157
144
204
182
79
119
488.0
174.5
165.5
256.4
298.4
101.4
196.9
Cost of Goods Sold
-1,952
-7,155
-10,079
-6,394
-5,244
-33,386
-34,343
Inventory
2,609
4,232
4,910
4,074
4,500
14,053
22,991
Days In Receivables
273.3
128.2
113.6
122.3
110.2
49.8
91.7
Revenue
9,130
24,000
36,169
26,413
18,134
87,609
79,203
Accounts Receivable
6,836
10,030
12,492
5,206
5,739
18,155
21,663
573.0
156.9
144.4
204.4
182.3
78.8
118.9
Cost of Goods Sold
-1,952
-7,155
-10,079
-6,394
-5,244
-33,386
-34,343
Accounts Payable
3,064
3,085
4,890
2,271
2,968
11,444
10,926
Owner Earnings
Invested Capital
28,038
24,809
25,475
21,335
25,822
33,854
64,096
Debt Coverage (FCF)
Owner Earnings
Total Debt
2,618
24
8,619
9.3%
0.1%
0.0%
0.0%
0.0%
0.0%
8.9%
Total Debt
2,618
24
8,619
Total Assets
35,785
36,518
50,533
52,389
56,473
93,967
121,755
Total Liabilities
7,496
3,253
5,945
2,569
3,554
17,633
24,739
2,668
8,600
19,393
28,783
27,683
43,403
42,739
Cash and Equivalents
2,668
8,600
19,393
28,783
27,683
43,403
42,739
2,417
144
280
298
586
923
9,819
Total Current Assets
22,292
23,025
37,078
38,516
38,429
75,923
89,493
Owner Earnings
Revenue
9,130
24,000
36,169
26,413
18,134
87,609
79,203
Adjusted FFO
Days In Inventory
Days Payable Outstanding
CROIC
Debt/Equity
Excess Cash
FCF/Sales
FFO/AFFO
L. C. Chong
Page 41 of 46
Adjusted FFO
9,216
9,499
14,427
8,324
1,941
31,813
22,226
300
960
1,077
1,219
1,534
1,832
1,593
Disposal of Investment Properties
7.3%
0.1%
0.0%
0.0%
0.0%
0.0%
7.1%
Total Debt
2,618
24
8,619
Total Assets
35,785
36,518
50,533
52,389
56,473
93,967
121,755
78.6%
70.2%
72.1%
75.8%
71.1%
61.9%
56.6%
Gross Profit
7,178
16,846
26,090
20,019
12,889
54,223
44,859
Revenue
9,130
24,000
36,169
26,413
18,134
87,609
79,203
Invested Capital
28,038
24,809
25,475
21,335
25,822
33,854
64,096
Total Asset
35,785
36,518
50,533
52,389
56,473
93,967
121,755
5,079
3,109
5,665
2,271
2,968
16,709
14,920
Intangible Assets
Excess Cash
2,668
8,600
19,393
28,783
27,683
43,403
42,739
Capital Expenditure
-4,596
-1,238
-2,012
-183
-17,030
PPE Reductions
351
11
Err:508
Err:508
Err:508
Err:508
Err:508
Err:508
Err:508
Err:508
Err:508
Err:508
100.9%
39.6%
39.9%
31.5%
10.7%
36.3%
28.1%
9,216
9,499
14,427
8,324
1,941
31,813
22,226
Revenue
9,130
24,000
36,169
26,413
18,134
87,609
79,203
4,904
10,008
14,870
8,599
2,070
32,547
23,063
Err:508
Err:508
Err:508
Err:508
Err:508
Err:508
Err:508
Err:508
Err:508
Err:508
9,216
9,499
14,427
8,324
1,941
31,813
22,226
300
960
1,077
1,219
1,534
1,832
1,593
Other Non Cash Charges
Net Capex.
Deferred Tax Liabilities
280
298
316
400
800
37.8%
28.6%
32.4%
16.7%
3.9%
41.7%
22.9%
9,216
9,499
14,427
8,324
1,941
31,813
22,226
Shareholders' Equity
24,384
33,266
44,588
49,820
49,211
76,334
97,016
Gearing Ratio
Gross Profit Margin
Net Capex.
Tax Rate
Net Profit Margin
NOPAT
Operating Income
Tax Rate
Owner Earnings
ROE
ROIC
L. C. Chong
Page 42 of 46
NOPAT
Invested Capital
28,038
24,809
25,475
21,335
25,822
33,854
64,096
2,618
24
8,619
Short-Term Debt
465
24
424
Long-Term Debt
2,153
8,196
Total Debt
L. C. Chong
Page 43 of 46
12/31/2012
247.7
269
125
146
268.9
-34,585
27,972
125.1
88,871
39,278
146.4
-34,585
16,819
83,293
12,589
11.0%
12,589
145,612
31,159
43,915
43,915
12,755
112,258
88,871
L. C. Chong
Page 44 of 46
20,490
2,504
8.6%
12,589
145,612
61.1%
54,285
88,871
83,293
145,612
18,404
0
43,915
-3,925
2,803
Err:508
23.1%
20,490
88,871
21,830
Err:508
20,490
2,504
0
635
17.9%
20,490
114,453
L. C. Chong
Page 45 of 46

83,293
12,589
1,249
11,339
L. C. Chong
Page 46 of 46

Vitrox q3 2013

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Page 1 of 46

VITROX CORPORATION BHD

L. C. Chong is NOT an investment advisor nor a financial advisor, and no

Cost of Goods Sold

Other Operating Income

Net Finance Costs

Other Non-Operating Income

Income Before Taxes

Income Tax Expense

Profit from Discontinued Operations

Net P/L To Shareholders

Cash and Equivalents

Total Long-Term Assets

Property, Plant & Equipment

Equity and Other Investments

Deferred Tax Assets

Other Non-Current Assets

Total Current Liabilities

Total Long-Term Liabilities

Deferred Tax Liabilities

Total Equity and Liabilities

Depreciation & Amortization

Investment/Asset Impairment Charg

Cash on Disposals of Businesses

Cash on Disposals of Investments

Cash on Disposals of PPE

Net Unrealised Forex Gain/Loss

Other Non Cash Charges

Other Working Capital Changes

Dividends/Investment Income Received

Other Operating Cash

Other Investing Activities

Net Cash From Financing Activities

Common Stock Issued

Net Cash From Operations

Working Capital Changes

Net Cash From Investing Activities

Common Stock Repurchased

Other Financing Activities

Gross Profit Margin 40%

Net Profit Margin 10%

Cash Conversion Cycle

Debt Coverage (FCF) 100%

Debt/Equity < 80%

Net Operating Cash

Latest Rolling 4 Quarter Results

PER SHARE VALUE (CENTS)

Latest Rolling 4 Quarter Results

PER SHARE VALUE (CENTS)

*Check out App 6 - EY% Chart

Lump Sum + Top Up

- Buy and Monitor

- Dollar Cost/Value Averagi

EPS QoQ Growth > 15%

Fundamental of business turns unattractive or bad (bear cases)

Dollar Cost/Value Averaging

- Very low leverage._x000D_

Appendix 1 - Discount Rate & Margin of Safety

Unadjusted Discount Rate

Concentrated Product Risk

Foreign Political Risk

Est. Earnings Growth

Self Defined Discount Rate