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Stockwatch- Innovalues Precision (Singapore) Investors Seminar Presentation

Today I attended an investor seminar that featured Innovalues Precision. Innovalues Precision's CFO, Soh Wai Kong, did the presentation. The highlights of the presentation are as follows:

Business Outlook

Automotive
- sales from 2003 till date mainly from Sensata, 2 projects Occupant Weight Sensor (OWS) and Brake Sensor only
- OWS and Brake Sensor expects volume in 2007 to grow
- Hilite product in qualification stage, mass run in 2007
- Siemens, Bosch, Luk and APT products already qualified, mass run in 2007

Office Automation
- have a new high volume customer, started manufacturing for them in September 2006 only
- Wide Format Plotter already qualified, mass run in Q2 2007
- X-ray printer for new customer
- Increase in volume for certain customers

Overall
* Presence in China provides business opportunities
- many customers and their contract manufacturers have presence in China to take advantage of lower manufacturing costs and to be near the potential market
- have plating license which the issue of license in Shanghai is currently being restricted
- China government is encouraging sourcing of car components from local market and may impose custom duties for components imported into China starting mid 2007

* Diversification
- 3 major business segments
- Automotive business is stable and not seasonal
- within each segment there a few major existing or potential customers
- some of our machinery can be switched for different business segments

Challenges
* There are indeed competition and price pressure, but:
- its size and volume give advantage to bring in major players and projects
- well positioned for Automotive segment which have high quality requirement, long qualification period and high cost of qualification
- Automotive market is big and many function critical and safety related components in a car
- good business relationship with customers

* Material prices are volatile and manufacturing costs are rising but strive to improve our margins:
- its size and volume allow us to get materials at cheaper price
- will continue to source for cheaper material
- work on internalising certain processes & supplies
- constant process improvement to increase productivity and yield
- lock in material price over long period of time
- Automotive segment is of higher margin & pricing is cost plus
- have cost reduction initiatives and drives

Summary
- high growth company in automotive and technology sector
- experience management
- ultra high precision technology & know-how
- provide one stop solution
- proven profitability and sales growth track record
- strong financial backing and shareholders
- its size provides advantage

posted by gsg @ 1:01 AM