TRT

Trio-Tech is a sub-$45M micro-cap semiconductor back-end test/services house whose FY2025 was a clear step down: revenue fell 13.8% to $36.5M (the SBS segment alone dropped 18% to $24.7M per MD&A), operating income cratered 76.8% to just $254K, and the company swung from a $1.05M FY2024 profit to a $41K net loss. Operating cash flow collapsed 86.3% to $371K while capex jumped 78.4% to $967K — so on a cash basis FY2025 was actually negative after investment. This is a cyclical business (>99.9% of revenue tied to semiconductors) caught in a down-leg, not a structurally broken one: gross margin held at 25.1% (vs 25.4%), G&A and selling expense were both cut, and the revenue slide is off a $44.1M FY2022 peak, so the franchise is intact but clearly de-rating.

What keeps this a hold rather than a sell/avoid is the balance sheet. Equity is $34.0M (up 8.6%) against just $7.08M of total liabilities (down 35.4%) and $684K of long-term debt — a 0.21x liabilities/equity ratio. Cash is $10.9M and current assets of $31.6M cover current liabilities of $6.28M five-fold, with working capital up 11% to $25.3M. Book value is ~$7.89/share and net cash is ~$2.4/share, so at $10.38 you are paying ~1.3x book and ~1.2x sales for a debt-light, cash-generative-in-normal-years business. Management also authorized a $1.0M buyback (fully available) — small, but a signal the board sees the stock as cheap.