Is Asia Technology And IT Market Growth Still ?

Looking into its history, this HDD and digital camera maker has seen stellar growth over the last few years. The company entered thetop-10-fun-and-entertaining-websites HDD industry in 1997 with just sales revenue of around RM41 million then. And just four years back, the company was just a smaller-based Mesdaq listed company on Bursa Malaysia.

However, with its strong revenue and earnings growth, the company graduated to a main board listing at the height of the US financial crisis last year, which was probably not good timing as the company shares were sold down together with the equity market bloodbath worldwide then to as low as RM0.16 in March this year.

However, this was probably not a true indicator of the company’s strong fundamentals then and when sentiment came back; the share price rebounded quickly and is now trading past RM0.50 It continued to post strong earnings even during this time and is now forecast by OSK Research to reach a record-breaking revenue and earnings of RM214.5 million and RM45.5 million respectively in 2010.

table 1

From its humble beginnings, Notion Vtec is now one of the best-earning local players in the Malaysian market for the manufacture of HDDs and digital cameras. It derives the bulk of its revenue (or around 80%) from the hard disk drives (HDD) and digital camera industries (see Table 1). Its key customers are multinational companies (IVINCs) such as Western Digital, Hitachi and Nikon (see Table 2) and the key products that it makes are camera cam barrels, digital camera body lens ring, HDD anti-disk, HDD disk clamps, HDD spacer rings, etc. The company is also involved in supplying other industries such as the automotive, consumer electronics and air-conditioning sectors.

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It is also now one of the biggest high precision engineering specialists in the country with two manufacturing plants in Kiang, Selangor, which it has expanded a few times since its initial public offer (IPO) in 2005. Its main factory is situated on nine acres of land with a 350,000 square foot (sq ft) built-up area with another 80,000 sq ft on three acres. The company now has 1,300 employees with 80% of its factory workers being foreigners. The factories have 960 computer numerically-controlled machines (CNC) at their sites while having achieved many accolades such as ISO 9001: 2000, IS0140001: 2004 and ISO/TS16949 certifications.

Notion VTec was founded in 1995 by William Choo Wing Hong, Lee Tian Yoke and Thoo Chow Fah, who are the current Managing Director, Executive Director and Executive Chairman respectively. Thoo is a relative of the Choo family by marriage. The Choo family collectively owns 36.2% of the e‘mpany while Thoo has a 7.6% stake. The fact that these long­time founders are still managing the company is probably a good indication of sustainability and continuation of the company’s good performance going forward, says an analyst.