One of the Post Covid-19 theme that I had in my mind is China-Plus. The redirecting of supply chains to diversify away from China. Valuetronics come to mind, after Rolf mentioned it in his blog. I decided to look deeper and these are more thoughts. (I no longer do excel or charts, you can read those by downloading the AR)
1) Impressive balance sheet and is in net cash position
2) Vietnam diversification is progressing fine, if you read their reports, it went from one customer request, to expansion by leasing a nearby site to meet demands, to having mutiple customers transferring their operations from China to Vietnam.
However, when I compared this with Frencken, which has more "global" supply chains, it is obvious that Frencken has more "foresight" or "dumb luck". Frencken earnings are hardly affected as the semiconductor and medical segments are able to expand to offset other weaknesses.
Valuetronics has better margins than Frencken, but what is worrying is Valuetronics has already lost some US customers (i.e. automobile sector) who has bring their supply chain back to US, and a smart lighting customer. Hence it is difficult to project earning recovery post Covid.
The Vietnam venture seem more like saving existing customers' contracts than a value-adding proposition that might open up new markets. Valuetronics also has its bulk of its exports going to US as compared to Frencken's.
With Covid-19, there are plenty of talk about resilence of supply chains as compared to just effeciency of supply chains, especially essential goods. My understanding is medical products/ equipements as well as agriculural food supplies. If I read correctly, Venture and Frencken has customers in the lifescience and medical sector but Valuetronics has none.
If you look at the shares price of the 2 companies, market has given thumbs up to frencken but lukewarm reactions to Valuetronics. For someone who invest in turnaround stories or cyclical plays, and I more interested in Valuetronics and would like to see how market might has misread it's prospects. However I could not find anything yet.