Sunday, 31 August 2014

MMSV: Q2FY2014




如果预测是对的,全年EPS=5sen应该有机会做到。现在股价43sen,Forward PE=8.6。给予一间基本面非凡的小公司,又有股息给,个人觉得一点都不贵。


This year's Q2 result performed much better than my conservative prediction. Unfortunately, the result is announced in wrong timing and the share price can't perform as per its result. From my observation, it seem like some investors are disposing share during good result announcement. Bad market sentimental may become another reason for this.

For this quarter result review, I would like to make a simple analysis. For this type of business company, the expenses will be high during its initial stage of R&D for a new product. Thus, it will cause the cost of sales to be higher. Once the development of a new product is completed, the profit margin will be higher. If company is going to deliver a big deal for its customer, the following profit will be explosive.

In brief, most of the cost will be adsorb during past Q1 and Q2. This can be proved as Q2 is showing a much better profit margin compared to Q1. In Q3, estimate the revenue will not less than RM10mil. Thus, I predict the coming Q3 profit will be better than Q2.

If my prediction is correct, whole year EPS should able to hit 5sen. Current share price at 43sen, which mean Forward PE is 8.6. For a small cap company with such great fundamental and couple with dividend payment, I think it is not expensive at all.

Anyhow, the market sentimental is quite bad now. For those is not a shareholder, should you buy? For those is existing shareholder, should you sell? There may be some investors thinking to sell right now and buy back when market become stable. Normally, the cheap offer will only happen in bad market sentimental. Will the cheap offer become cheaper? I have no answer as everyone is unique and decision may be vary. This is the reason why the stock market is so exciting place to stay in!


Anonymous said...

Thanks TS for your update on MMSV. Looking at the improved current quarter result and that of it's competitor Elsoft it's a good opportunity during these poor sentiment period to slowly accumulate MMSV if looking at long term. It's competitor Elsoft has been buying back it's share though not much likewise the same with MMSV directors which bought back more and Elsoft has also recently proposed to give 40% of it's profits as dividends and just a matter of time before MMSV increase it's dividend to attract more investors as a sweetener besides it's low PER if the profits keep improving. Comparing the both companies MMSV looks to be way more undervalued to Elsoft.

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