Cheung Woh Technologies' Q1 profit surges five times to $199,000

Hard disk drive manufacturer Cheung Woh Technologies reported a first-quarter profit of $199,000 for the three-months ending May 31.

This came about despite a fall in quarterly revenue of 21.6 per cent to $14.1 million.

Cheung Woh had however, disposed off Suzhou Tysan Steel Co in the third quarter of its last financial year.

Excluding Tysan Steel, revenue fell less sharply by 14.2 per cent from the same period a year earlier.

This was due to the soft demand from customers for hard disk drives which resulted in a 24.8 per cent reduction in sales for the component.

In contrast, the sales in precision metal stamping components segment rose 24.8 per cent due to higher demand.

Cheung Woh's loss before taxation stood at $3,000 which was affected by a "one-time retrenchment benefits payment in Singapore of approximately $700,000 due to the relocation of its manufacturing activities".

In April, the company announced its decision to relocate part of its manufacturing business to its subsidiary in Penang to streamline production costs for the hard disk drive components segment.

Nonetheless, its bottomline rose due to the 25.1 per cent increase in shares of results of associate companies. This pertained to Cheung Woh's interest of Tysan Precision Engineering (Suzhou) Co. group of companies.

Its earnings per share rose seven times to 7 cents per share.

Net asset value for the share rose to 30.02 cents, up from 29.18 cents as at Feb 28.

Cheung Woh shares closed flat at 14.1 cents.

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