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Thursday, March 26, 2015

MMSV My Stock for 2015

I highlighted MMSV on Dec 08, 2014 as a good buy at 53.5 sen. 
At 11.50 am today, the share price has gone up to 62.5 sen. This is an increase of 9 sen. Together with the interim dividend of 1 sen, the gain is 10 sen or 18.69% over a period of 3 months and 18 days. While this is not something to shout about, nevertheless, the gain can be considered as commendable. 

What is the status quo of MMSV now? Let us take at look as its latest balance sheet. As at 31 Dec 2014, the key statistics are as follows:
Share Issued: 163 ml shares
Par Value: 10 sen
Revenue for the year: RM39.691 ml
Net Profit: 10.645 ml
Net Profit Margin: 26.343%
EPS: 6.41 sen
Total dividend for the year: 2 interim dividend of 1 sen each
Total non-current assets: RM9.922 ml
Total current assets: RM30.468 ml of which RM15.715 is in cash and cash equivalent
Total equity: RM31.402 ml
Total non-current liabilities: RM503,000 
Current liabilities: RM8.486 ml
Current ratio: 3.59
Quick ratio or acid-test ratio: 2.72
Return on equity: 33.90
Debt to equity ratio: Not applicable, as the company has zero borrowings

Some of the things I like about this stock are as follows:

Current ratio of 3.59 means that the company is solvent and solid.
Its cash position is high. Thus, the company does not have any cash problem.
The Return-on-equity ratio of 33.9 shows that the management is competent.
As for growth, the company's profit has surged 109% in 2014 when compared to the profit of the preceding year.

Inter alia its filings with Bursa are the following statements:

Financial period-to-date against preceding year corresponding financial period 
The Group's total revenue of RM39.691 million for the year ended 31 December 2014 marked a hefty increase of 49% (RM13.017 million) as compared to RM26.675 million reported in the previous financial year. The higher revenue was contributed by the higher volume of machines delivered to meet the surge in the market demand of smart phones/devices together with the LED related products. This higher revenue was attributed to the Group's ability to penetrate into the niche market of smart phones/devices. 
Profit before tax surged by a significant 109% (RM5.479 million) to RM10.510 million from RM5.031 million in the preceding year, mainly attributable to the increase in revenue coupled with the favourable forex gain during the financial period under review. 
  • Prospects 
    The Board of Directors foresees that the current positive market momentum will enable the Group to continue delivering another good set of results for the quarters to come. The Board is confident of reaping benefits arising from the continued growth of both the LED and smart devices industry. Besides, our huge cash resources will come in handy for use of the Group in any future prospective business opportunities that may arise.
    The Board is also pleased to announce that the Group has obtained approval in principle from Malaysian Investment Development Authority (MIDA), a 10-year 100% tax exemption under Pioneer Status for one of its subsidiaries. This is a very promising development which bodes well for the Group's future.
  • Conclusion
  • My view is that this stock will have a good run in 2015 and beyond. The present price is a good entry point. 
  • As usual, you buy at your own risk. 

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