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Falling Knife of the Week: Oniontech Limited

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The Falling Knife for the week happens to be Oniontech  (SGX: 5HG). Since last Friday, it has fallen by 20% to S$0.056 as of Thursday’s close.

Founded in 2000, Oniontech is an investment holding company that provides software solutions and content related services for value added services in the mobile telecommunications industry. It offers a range of solutions like 3G voice messaging system and ring back tone (RBT) solutions, allowing subscribers to customize ring back tones using music, comical voice messages, customized recorded messages and various sound effects. The firm is headquartered in Korea and has a presence in China, Australia, and Japan.

For the financial year ended 31 December 2013 (FY 2013), revenue for the firm went south by 6% year-on-year to US$2.9 million due to the slow economy and competition. Net loss was at US$2.7 million as compared to less than a million in the previous year. It didn’t generate any cash flow from operations for both FY 2013 and FY 2012.

Looking ahead, Oniontech said that business conditions in the industry continues to be challenging and competitive. The firm also added that it has the appropriate level of staff and has secured continuing projects such as the Seoul tour app and internet site, and the tax refund system which allows for foreign travellers to get refunds conveniently.

It is trading at 0.92 times its historical book value.

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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.