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MMSV - More growth to come!
BASIC INFORMATION
Exchange: KLSE
Current Price: RM 0.810
Diluted Shares Outstanding: 163,000,000
Market Capitalization: RM 132.0 million
Public Float: 23%
Industry: Technology Equipments
QUANTITATIVE ANALYSIS
| Previous FY | TTM | MRQ | Criteria (Annualised) | |
|---|---|---|---|---|
| Valuation | ||||
| Historical P(EBITDA)R | 7.61 | 10.26 | <10 | |
| Trailing PTBV | 3.72 | |||
| Dividend Yield | 1.2% | - | ||
| Capital Structure | ||||
| Long Term Debt/Total Asset | 1.9% | 1.2% | <30% | |
| Total Debt/Total Asset | 15.6% | 20.8% | <60% | |
| Management Effectiveness | ||||
| ROE (use EBITDA) | 35.2% | 52.9% | 5.6% | >15% |
| ROA (use EBITDA) | 27.4% | 41.5% | 4.4% | >6% |
| ROIC (use EBITDA) | 28.7% | 43.5% | 4.7% | >4% |
| Liquidity | ||||
| Cash Ratio | 1.85 | 2.03 | ||
| Quick Ratio | 2.72 | 2.91 | >0.8 | |
| Profitability | ||||
| EBITDA Margin | 27.9% | 28.3% | 24.0% | >5% |
| EBITDA (cents) | 6.78 | 7.35 | 1.13 | |
| Cash Flow | ||||
| Operating Cash Flow/Net Profit | 0.87 | 0.92 | 0.87 | >0.5 |
| Free Cash Flow/Net Profit | 0.79 | 0.87 | 0.79 | >0.2 |
| YoY | QoQ | Criteria | ||
|---|---|---|---|---|
| Growth | ||||
| Revenue | 48.8% | 52.9% | >10% | |
| EBITDA | 101.8% | 102.3% | >5% | |
| EBITDA/Equity | 45.1% | 42.9% | >0% |
Comments: Valuation of MMSV exceeds criteria slightly. This is OK as MMSV is a technology stock.
QUALITATIVE ANALYSIS
Advantages: Beneficiary of strengthening USD/MYR forex with 33.4% revenue coming from USA (FY2014). Outlook for MMSV looks bullish as the forex rates for USD/MYR is expected to remain weak and likely to decline even further when BNM stops intervening to stabilize the rates. Also, one of MMSV's subsidiaries has been approved of a pioneer status by MIDA, hence eligible for 100% tax exemption for the next 10 years.
Risks: MMSV depends on the demand from industries such as semi-conductors, opto-electronics and LED and smart devices. These industries rely on the growth of smart devices companies. A slowdown of demand for smart devices will affect MMSV.
RESULTS
Target Price: RM 1.21
Potential Upside: 49% (based on current price)
Margin of Safety: 33% (based on current price)
Maximum Entry Price (Fundamental): RM 0.850
Recommended Entry Price (Technical): RM 0.770
Cut Loss: RM 0.700
Holding Period: Until end of May 2016 (After QR)
Email me at equitywhiz@outlook.com for more analysis like this.
DISCLAIMER
Financial data is mostly obtained from Morningstar.com and i*Trade@CIMB. Should you have any doubts in the accuracy of this data source, kindly refrain from using this analysis for your investment decisions. The analysis has a buy/sell recommendation, however EquityWhiz will not be liable for any losses as a result of this analysis.
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