Singapore “Flyer” of the Week: Broadway Industrial

Broadway Industrial Group Limited (SGX: B69), manufacturer of precision-machined components and provider of engineered foam solutions, is this week’s Singapore “Flyer”. The stock has soared 20% so far, last changing hands at $0.27 as of Thursday’s close.

The firm was founded in 1969 and it comprises of over 14 manufacturing and research facilities across China, Thailand and the USA. Broadway Industrial is one of the top three manufacturers of actuator arms and related assembled parts for the global hard disk drive (HDD) industry. Broadway boasts well-recognised players in the HDD industry such as Western Digital and Seagate as its clients.

On 7th January, the firm made public that it had entered into a conditional option agreement with a buyer to sell its property located at The Central, 8 Eu Tong Sen Street, Singapore for S$4.2 million.

The reasons for selling the property are twofold:

  1. The property is not being used by the company for any business operations.
  2. After the sale, the cash received can be used to reduce the company’s borrowings (thereby lowering its interest expenses) and the proceeds can also be used as working capital.

On the previous day before the option agreement was announced, the company revealed that Shanghai Broadway Packaging & Insulation Materials Co., Ltd (SHBW), a 96.47% owned subsidiary of Broadway, had increased its registered capital from US$5.3 million to US$17.3 million. After the capital increase, SHBW remains a 96.47% owned subsidiary of the company.

The company also announced that Compart Hi-Precision (Suzhou) Co., Ltd (CHSUZ), an indirect wholly-owned subsidiary of the company, had increased its registered capital from US$8 million to US$10 million.

Broadway is now trading at a historical PE ratio of close to 24.

Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool’s free investing newsletter. Written by David Kuo, Take Stock Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.  

Like us on Facebook  to keep up-to-date with our latest news and articles. The Motley Fool’s purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.