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Hard disk parts maker Broadway appears cheap, but faces risks from legal dispute

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Yong Jun Yuan

Yong Jun Yuan

Published Tue, May 17, 2022 · 05:50 AM
    • Two companies that the Broadway had planned to sell its manufacturing business to have initiated arbitration after the deal fell through in July last year.
    • Two companies that the Broadway had planned to sell its manufacturing business to have initiated arbitration after the deal fell through in July last year. PHOTO CREDIT: Pixabay

    DeeperDive is a beta AI feature. Refer to full articles for the facts.

    SHARES of mainboard-listed Broadway Industrial Group have gained in recent months in spite of a scuppered deal, possibly thanks to decent growth. But investors should be aware that the company's cash pile is at risk of being diminished by a legal dispute.

    Broadway, which makes actuator arms for the hard disk drive (HDD) industry, posted a 17.7 per cent growth in revenue to S$471.4 million for the year ended Dec 31, 2021, from S$400.7 million a year earlier. Net profit in the same period grew 8.2 per cent to S$15.3 million, from S$14.1 million.

    Net cash flows from operating activities declined to S$13 million in FY2021, from S$42.3 million a year ago, as trade and other receivables nearly trebled from S$8.6 million to S$24.3 million.

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