New longer term investing position (PCI Ltd)

First thing first... That Chippac flew to 45c and I missed everything from 36.5c to 45c :(.
The power of a bounce from the perspective of a monthly chart, is indeed strong.

Anyway, I bought some small investing position yesterday.
My counter of choice: PCI Ltd.
From SGX:

Background

PCI Ltd, formerly known as PCI (1989) Pte Ltd, was incorporated on 8 December 1988 as the holding company of the business for the PCI group of companies. Its first Batam plant was set up in 1990 to take advantage of the cheaper labour costs as well as in response to the increasing demand for its services. The second and third plants were set up in 2000. In the same year, it also acquired Polymicro Corpn (S) Pte Ltd which has manufacturing facilities in Singapore, Malaysia and Thailand. The Group first commenced its operations Printed Circuits Intl Pte Ltd, an independent manufacturer of printed circuit boards. It quickly expanded into the manufacture of LCDs (liquid crystal displays), LCD Modules and PCB assemblies. Today, its operations and business include OEM and contract manufacturing with an emphasis on higher value-added PCB based or LCD based semi-finished and finished products for the telecommunications, office automation and automotive industries. Some of the products manufactured for OEMs and semi-finished products include cordless telephones, point of sales terminals, portable barcode readers and modem cards. Major customers of the Group include Motorola, Xerox, Tecom, Roche, Qualcomm, Lucent Technologies, Philips and Robert Bosch.

This counter caught my eye sometime ago, but it's illiquid and not easy to buy or sell large positions. The thing that attracted me to this was:
A) a proposed 3c dividends that are to be announced
B) 76.78% holding by Chuan Hup (another listed co)
C) Strong balance sheet and cash position

Based on 30th June 2012 full year results, it has about US$40m in cash (about US$0.20 per share).
Total assets is at US$ 137m with US$40m in Accounts Receivables and the US$40m cash.
Liabilities at US$52m (almost all are current account payable liabilities).
Shares available is close to 200m shares. (used for simplicity)

As seen above, balance sheet is healthy with all liabilities easily met. It has zero borrowings. NAV is at US$0.42 (about SGD 0.50). The current price is close to NAV.

I bought in 10lots at an average of 47c after commission. The 3c proposed dividends will give me a yield of 6.38%, which is decent.

I went on to look at Chuan Hup's balance sheet and once again, this is a cash rich profitable company with little debt. It has US$81m in cash as part of total assets of US$368m. The liabilities weigh in at US$64m (almost all are current). From where, we can see that they can easily pay out the liabilities with cash alone.
Why am I looking at Chuan Hup? Well since Chuan Hup already holds 76.78% of PCI and had been accumulating PCI shares slowly since they failed to takeover the company in 2011 with an offer of S$0.50. The shares in which Chuan Hup doesn't hold in PCI is about 50m.

Assuming that Chuan Hup comes in to offer again but at S$0.60 per share, it would only cost the S$30m (about US$25m from their US$81m). Not to PCI would be paying out S$0.03 dividends of which Chuan Hup will get about S$4.5m. Taking over PCI will give them access to the US$40m cash that PCI currently holds (before dividends and liabilities). This gives a good case for a takeover. It's been a year after the previous offer lapse (21 June 2011) and thus Chuan Hup is able to mount another offer if they so chooses.

Lets wait and see if they will attempt to do so again.