Like many of the other new listings, HISAKA Holdings (HISAKA) has been an unfortunate victim of the gloomy sentiment currently surrounding the local bourse. Ever since stamping its name last month on the Singapore Exchange, HISAKA has been gyrating in a narrow range between $0.205 and $0.245. On 17 June, the Mainboard-listed company closed at $0.215, a tad below its $0.23 offer price.

Established in 1992, HISAKA has throughout these years morphed into an automation solutions provider specialising in mechanical motion products. Its operations can be broadly classified into three key divisions, namely mechanical motion, metallic precision and mechatronics integration.

For mechanical motion, HISAKA helps customers to stock and source globally for customised or standard components. For metallic precision, the company customises and fabricates components, which are not available as standard parts in the market, tailored to customers’ specifications. For mechatronics integration, HISAKA integrates and combines mechanical engineering, electrical and electronic engineering as well as software engineering techniques to provide advanced hybrid systems for its customers.

“Anything that requires motion, our products and services could apply,” Jackie Cheng, CEO of HISAKA told Shares Investment (Singapore) during a recent interview.

As a strong testament to its commitment towards providing quality service standards, HISAKA is also a proud recipient of the Enterprise 50 and SME 500 awards.

Over the years, HISAKA has built a huge customer base of more than 1,600 companies, which are predominantly in the semiconductor, electronic manufacturing services, data storage and automation industries. They include prominent names such as ASM, Kinergy, Flextronics and Kulicke & Soffa. In fact, these four companies accounted for a substantial 60.6% of HISAKA’s turnover for FY07.

Realising the need to reduce its reliance on these existing industries, HISAKA is contemplating moving into other promising sectors to further enhance its growth. Specifically, the company has its eyes fixed on the marine and energy industries.

In addition, the company intends to expand its production facilities and acquire more machinery to cater to rising demand for its products and services, particularly in the PRC. As such, HISAKA has already earmarked $3m from its IPO proceeds to fund this initiative.

Meanwhile, HISAKA delivered a commendable set of results for the 6 months ended 31 March 2008. During the period, the company chalked up a 34.5% gain (year-on-year) in net profit to $2.6m on the back of a 34.2% jump in revenue to $29.9m.

The bottom-line increase was also boosted by improved gross margin, from 22.7% to 23.2%, mainly attributable to higher turnover from the manufacturing segment (metallic precision and mechatronics integration), which generally commands a higher gross margin. Notably, this particular business segment registered a 120.9% surge in revenue to $9.5m, making it HISAKA’s star performer in 1H08.

Trading at a historical P/E and P/B of 7.18x and 1.16x respectively, HISAKA certainly appears less expensive compared to its industry peer, ISDN Holdings, which is trading at a historical P/E and P/B of 19.9x and 3.16x respectively. Furthermore, HISAKA intends to recommend a dividend payout of 50% of its net earnings for FY08. This translates to a mouth-watering yield of 7%, assuming that the company rakes in the same amount of profit compared to the previous corresponding period.