5 Companies with Net Cash Position for the Past 3 Years

Companies that are in a Net Cash position has a significant portion of cash in their balance sheet, with minimal amount of total liabilities.

The way to derive each individual company’s net cash figure is being calculated by subtracting a company's total liabilities from its total cash on hand. The net cash figure is commonly used to evaluate a company's cash flows and the overall financial health of the company.

To be in a net cash position means that the company will have ready fund to tap onto any acquisitions or opportunities to grow their business.

In this article, we will be looking at 5 companies that are in Net Cash Position for the past 3 years:

• Cordlife Group Limited (SGX: P8A)

• Avi-Tech Electronics Limited (SGX: BKY)

• Sarine Technologies Limited (SGX: U77)

• Valuetronics Holdings Limited (SGX: BN2)

• Challenger Technologies Limited (SGX: 573)

1) Cordlife Group Limited (SGX: P8A)

Incorporated in 2001, Cordlife Group Limited (“Cordlife”) is a consumer healthcare group and one of the key providers of cord blood as well as cord lining banking services in Asia.

Cordlife owns the largest network of cord blood banks in Asia with full stem cell banking facilities in six key markets namely Singapore, Hong Kong, Indonesia, India, Malaysia and the Philippines. In Singapore, the Philippines and Indonesia, Cordlife operates the largest private cord blood banks; and is amongst the top three market leaders in India and Malaysia.

For December FY2018, Cordlife’s net cash position stands at S$38.6 million and has risen to S$41.7 million in FY2019. The rise in net cash position was due to the increase in Cordlife’s cash and short-term investment, which was partially offset by higher debt level.

Cordlife’s share price is last traded at S$0.385, with a market capitalisation of S$98.01 million.

2) Avi-Tech Electronics Limited (SGX: BKY)

Avi-Tech Electronics Limited (“Avi-Tech”) is a total solutions provider for burn-in and engineering services for the semiconductor, electronics and life sciences industries. Its core business segments include Burn-in Services, Manufacturing and PCBA Services, and Engineering Services.

Avi-Tech's clients are global leaders in semiconductor automotive, networking, and industrial products. Headquartered in Singapore, Avi-Tech’s production facility has equipped with advanced burn-in systems, many of which are designed and fabricated in-house.

Since FY2018, Avi-Tech's net cash position has been on a consistent growth, from S$32.5 million to S$36.7 million in FY2020. Despite the increase in total debt to about S$1.5 million in FY2020, Avi-Tech's strong cash flow generation was more than enough to cover the increase in debt level, as the company managed to increase its cash hoard by S$3.8 million.

Avi-Tech’s share price is last traded at S$0.465, with a market capitalisation of S$79.53 million.

3) Sarine Technologies Limited (SGX: U77)

Established in 1988, Sarine Technologies Limited (“Sarine Tech”) is a worldwide leader in the development and manufacturing of advanced modeling, analysis, evaluation, planning, processing, finishing, grading and trading systems for diamonds.

The company’s product includes the Galaxy® family of inclusion and tension mapping systems, rough diamond planning and optimisation technologies, laser cutting and shaping tools, laser-marking, inscription and finger-printing equipment, automated (AI-derived) Clarity, Color, Cut and light performance grading systems and traceability, visualisation and retailing services.

In FY2017 and FY2018, Sarine Tech does not have any long term or short term debt in their balance sheet. Coupled with the cash generation from operation, this resulted in the slight rise in net cash figure in FY2018.

However, with Sarine Tech taking on debts for its expansion, its net cash figure has declined to S$30.4 million in FY2019.

Sarine Tech’s share price is last traded at S$0.615, with a market capitalisation of S$215.14 million.

4) Valuetronics Holdings Limited (SGX: BN2)

Listed on the SGX Mainboard since 2007, Valuetronics Holdings Limited (“Valuetronics”) is an Electronic Manufacturing Service (“EMS”) provider which focuses on the design and development of products for its customers.

Valuetronics’ customers are involved in consumer electronics and industrial and commercial electronics products, with core competencies ranging from tool fabrication, injection moulding, metal stamping, machining, Surface Mount Technology (“SMT”) and finished product assembly on full turnkey basis.

In FY2018 and FY2019, Valuetronics has a debt-free balance sheet. With the sharp rise in cash flow from operations, this resulted in the increase in its net cash figure to S$160.6 million in FY2019. The trend continues into FY2020 where the figure grew by 24.5% year-on-year to S$200 million even as the company took on some borrowing for its operations.

Valuetronic’s share price is last traded at S$0.665, with a market capitalisation of S$289.27 million.

5) Challenger Technologies Limited (SGX: 573)

Incorporated in 1984 and listed on January 2004, Challenger Technologies Limited (“Challenger”) operates a chain of IT retail stores, also known as Challenger, which sells information technology products and provides services related to its products.

Currently, Challenger serves over 500,000 ValueClub members and across 40 stores island-wide here in Singapore.

For FY2017 and FY2018, with a debt free balance sheet, Challenger’s net cash figure was kept stable of around S$63.2 million. However, with the increase in right-of-use assets and lease liabilities, Challenger’s net cash position has decreased to S$54.9 million in FY2019.

Challenger’s share price is last traded at S$0.48, with a market capitalisation of S$165.69 million.

Conclusion

The metric, net cash position, is a measure of each individual company's liquidity—or its ability to quickly meet its financial obligations. With a higher net cash figure, companies will be able to meet its obligations and have the resources to expand their operations.

When net cash is used in relation to stock investing, it refers to an abbreviated version of the term "net cash per share”. This indicates how much cash per share is being valued in the current share of each company. Investors can use these metrics to help determine whether a company's stock is an attractive investment.

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