Background and Core Business

MMS Ventures Bhd (MMSV) was incorporated on March 2004 as a private limited company, and subsequently was listed on ACE Market by October on the same year. It is categorised under the Electronic Technology sector that deals with the Electronic Equipment/Instruments industry. MMSV is a holding company for its two wholly owned subsidiaries, which are Micro Modular System Sdn Bhd (MMS) and Evolusys Technologies Sdn Bhd.

MMSV’s operations can be summed up into 2 basic categories, which are design and manufacture of LED and Semiconductor Industrial Automation Systems and Machinery under the subsidiary MMS; while software and tester development for MMS’ automation solutions is under Evolusys.

MMSV’s had its humble beginnings as a manufacturer of jigs, fixtures and die-sets, Trim and Form systems and assembly machines for the electronics industry. The company achieved a milestone in 2001 with their first integrated semiconductor clinching machines which are still sold today, along with their proprietary machine control software platform. From 2011, MMSV shifted their focus to machines for the LED production process and today, they cover the whole backend process of low to high power LED production and testing.

As of today, MMSV commands a market capitalisation of approximately RM111.66 million. They are currently in their 3^rd quarter for FY2016, with the financial year ending on 31 December 2016. Next quarterly results announcement should be on the month of Aug 2016 for Q2 results.

Financial Brief and Ratios (Historical)

MMSV managed to achieve a turnover of RM27 million Trailing Twelve Months (TTM), on the back of FY 2015’s turnover of RM31 million. Based on their performance since 2012, revenue was increasing y-o-y till FY2015 when they experienced a contraction by -21%. Nevertheless, the net profit margin for MMSV has been relatively well maintained at around 22% TTM. This figure was even higher in FY2015 at about 25%. EPS is about 3.81 sen TTM, compared to 4.97 sen in FY2015.

PE ratio is considered average for a company listed in the ACE market. Dividend payment became a regular affair since FY2014, and last year’s dividend yield was about 2.92%. MMSV’s ROE is at a healthy level of 18%.

On the balance sheet, MMSV has little debts, and they are positively geared. Both Cash and Current ratios show resilience. Cash flows from operations mirror their revenue and net profit trend. Investors should be aware that the company is expending more cash for capital expenditure this year. In spite of that, MMSV has managed to maintain positive free cash flow all these years.

iVolume Spread Analysis (iVSA) & comments based on iVSAChart software – MMSV

The 6-month weekly iVSAChart for MMSV shows that prices experienced a breakout from a trading range in July 2016, with Sign of Strength (green arrows) detected from first week of July 2016.

Prior to that, the stock had undergone a classic Accumulation stage with very low volume and sideway movements within the trend channel that is well supported around RM0.46.

Even though some Sign of Weakness (red arrows) did appear after the initial breakout, these were seen as mild profit taking activities as the stock resumed its uptrend as seen by subsequent strong weekly closes and bullish volume. Based on the chart, the impending 2^nd quarter results due this month is anticipated to be positive.

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