Mercury Securities Group Berhad (MERSEC, 0285), whose stock price has consistently reached new highs, recently disclosed remarkable financial performance. Despite ongoing growth in operating revenue, the company faced losses. However, this did not hinder MERSEC's stock price from continuing to rise, reaching new highs at one point. What's the story behind this? Let's delve into the latest quarterly report from MERSEC to explore the highlights.

Revenue Comparison (YoY = N/A, QoQ +19.97%)

As MERSEC has been listed for less than a year, there is no year-on-year data for comparison.

For the fourth quarter ending on October 31, 2023 (Q4 FY2023), the company's revenue amounted to approximately RM8.71 million, an increase of around 19.97% compared to the preceding quarter's RM7.26 million. This growth was primarily driven by an increase in revenue from stockbroking, especially in brokerage fees, underwriting fees, and placement fees.

Out of the RM8.71 million in revenue, approximately RM6.35 million came from the stockbroking business, marking a sequential increase of about 42.09%. The remaining revenue of about RM2.35 million is derived from corporate financing activities.

It is noteworthy that throughout the fiscal year, MERSEC's corporate finance team successfully facilitated the listing of two companies on the ACE Market of Bursa Securities and completed various secondary fundraising activities, including underwriting and placement.

Net Profit Comparison (YoY = N/A, QoQ -111.31%)

Despite the growth in operating revenue, the company reported a net loss of approximately RM0.42 million for this quarter. This was due to one-off expenses in the quarter, amounting to around RM3.93 million. Excluding these expenses, the adjusted pre-tax profit for this quarter would be approximately RM4.60 million.

Nonetheless, the company maintained a relatively high gross profit margin of around 57.93% for the quarter. Additionally, the company carries no bank loans and holds a substantial cash position of approximately RM82.50 million for the quarter.

Furthermore, MERSEC announced a mid-term dividend of RM0.0050 per share during this quarter, with the ex-dividend date on January 11, 2024, and the payment scheduled for February 2, 2024.

Outlook

The company plans to continue expanding its stockbroking services and strengthen its online trading platform to broaden and increase its client base.

With the anticipated recovery of the stock market and potential growth in IPO activities in 2024, MERSEC's stockbroking and corporate finance businesses are expected to continue growing.

So, dear readers, are you excited about MERSEC's future growth and the continued rise of its stock price?

———————————————————————————————————————————————————

Disclaimer: The above is purely for educational purposes and reflects personal opinions. It does not constitute any buying or selling recommendations.

If you are interested in opening a CGS-CIMB trading account, please sign up using the following link:

https://forms.gle/kZVCyDxUurxChMcg9

———————————————————————————————————————————————————————————