Mun Siong Engineering

(22-12-2015, 06:32 PM)valuebuddies Wrote: Considering the headwind in o&g and the coming financial crisis, I think the share price would stay depressed for a prolonge period of time.

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Suggest that a distinction needs to be made between upstream and downstream o & g. Upstream is directly and adversely affected by the fall (crash?) in prices. However, downstream they take those raw materials and turn them into feedstock for plastics and other products. Reducing raw material costs should be beneficial in terms of future demand, at least in the medium term. Mun Siong appear to be primarily involved in downstream, so what is happening to o & g prices may be less of an issue than the current weakness in China and the effect that is having throughout Asia.

If there is lack of demand due to china weakness there will be impact to feedstock isn't it ?

(23-12-2015, 10:25 AM)Dosser Wrote:

(22-12-2015, 06:32 PM)valuebuddies Wrote: Considering the headwind in o&g and the coming financial crisis, I think the share price would stay depressed for a prolonge period of time.

[ stay vested without upsize ]

Suggest that a distinction needs to be made between upstream and downstream o & g. Upstream is directly and adversely affected by the fall (crash?) in prices. However, downstream they take those raw materials and turn them into feedstock for plastics and other products. Reducing raw material costs should be beneficial in terms of future demand, at least in the medium term. Mun Siong appear to be primarily involved in downstream, so what is happening to o & g prices may be less of an issue than the current weakness in China and the effect that is having throughout Asia.

Smart observation! Fully agreed.

Extract from latest results comments:

The Group has in recent months noticed that our business partners have held back or slowdown
the award of new works. New works that come on stream are awarded at lower 
prices causing a squeeze on profit margins. Strong competition among key service
providers, due to shortage of works, has caused profit margins to deteriorate.
The Group will continue its efforts to pursue business opportunities, both domestically and
in regional markets, to diversify and widen both the customer and revenue base. Such
initiatives include strategic investment opportunities to enhance its range of services and
products. However, these initiatives take time to bear fruits.

Seems like it doesn't matter up or down stream... a tsunami is approaching with competition intensifying...

Frankly even downstream will be affected as a result of poor demand for products... lower feedstock costs will help to ease margin compression for downstream plants but with the high fixed costs associated with such production facilities, it is only logical to assume that high volume of lower priced end products will be required to cover fixed costs of downstream plants and hence the shrinking works being handed down by these producers.

Anyway, such service engineering cos are small and cyclical players... if they can be big players, they would have been big long time ago.

Not Vested

(24-12-2015, 09:11 PM)greengiraffe Wrote: Extract from latest results comments:

The Group has in recent months noticed that our business partners have held back or slowdown
the award of new works. New works that come on stream are awarded at lower 
prices causing a squeeze on profit margins. Strong competition among key service
providers, due to shortage of works, has caused profit margins to deteriorate.
The Group will continue its efforts to pursue business opportunities, both domestically and
in regional markets, to diversify and widen both the customer and revenue base. Such
initiatives include strategic investment opportunities to enhance its range of services and
products. However, these initiatives take time to bear fruits.

Seems like it doesn't matter up or down stream... a tsunami is approaching with competition intensifying...

Frankly even downstream will be affected as a result of poor demand for products... lower feedstock costs will help to ease margin compression for downstream plants but with the high fixed costs associated with such production facilities, it is only logical to assume that high volume of lower priced end products will be required to cover fixed costs of downstream plants and hence the shrinking works being handed down by these producers.

Anyway, such service engineering cos are small and cyclical players... if they can be big players, they would have been big long time ago.

Not Vested

In the short term companies that are involved in both upstream and downstream may be slashing capital expenditure on both as a knee-jerk reaction to falling o & g prices. In the medium term, downstream activity (and capital expenditure) must be demand driven, and the falling cost of the raw material should be a positive factor, not a negative one.

Agree that the key issue for downstream in the medium term is demand for the product. Eventually, falling raw material prices (not just o & g) should translate into increased economic activity...just taking a long time to kick-in.

Also not vested

The key is how much increase in economic activities due to low price VS TRUE economic strength to demand for the raw material which is more sustainable.

Through her spouse, Chairlady Cheng Woei Fen today (17May16) started buying shares from the open-market.....
http://infopub.sgx.com/FileOpen/_MSE-201...eID=405442

As the counter has just gone 'XD' on 9May16, it appears the Chairlady is re-investing the money from her coming dividends, or just to show her commitment to the business.

The 1Q (ended 31Mar16) result (first released on 6May16) reflected a 'do more, but earn less' situation, and the erratic pattern of Mun Siong's earnings from project work (vs. maintenance contracts).....
http://infopub.sgx.com/FileOpen/MSE-2016...eID=403331 [1Q result announcement]
http://infopub.sgx.com/FileOpen/MSE-2016...eID=403332 [press release]

I suppose a quarter's numbers do not necessarily reflect a permanent trend, and instead we should try to look at Mun Siong's businesses further into the future.

While its peers such as Hai Leck and PEC have recovered from the effects of falling oil prices, Mun Siong remains in the doldrums:

http://infopub.sgx.com/FileOpen/MSE-2017...eID=453528

NPAT:
1Q17: $0.1m
4Q16: $2.4m
3Q16: ($0.4m)
2Q16: $0.3m
1Q16: $0.3m
4Q15: $2.2m
3Q15: $1.1m
2Q15: $0.2m

(12-05-2017, 11:49 PM)karlmarx Wrote: While its peers such as Hai Leck and PEC have recovered from the effects of falling oil prices, Mun Siong remains in the doldrums:

http://infopub.sgx.com/FileOpen/MSE-2017...eID=453528

NPAT:
1Q17: $0.1m
4Q16: $2.4m
3Q16: ($0.4m)
2Q16: $0.3m
1Q16: $0.3m
4Q15: $2.2m
3Q15: $1.1m
2Q15: $0.2m

It could be an one off loss that MS was bullied by new staff of a key customer according to recent AGM. No long term impact and trend.

Vested