Micro-Mechanics (Holdings)

MMH@331 
Q1FY2021 Result was out and of course, nothing surprised.
https://links.sgx.com/FileOpen/MMH-SGXne...eID=688434

In fact, Sudhan of seedy wrote an articles before the Q1FY2021 was released and well, he is absolutely right about MMH.


https://drive.google.com/open?id=1-768fM..._Jgb9MFdaV


Gratitude!

Good morning valuebuddies.
Just read the following headline and let me know which company has paid dividends for the last 17 years?

https://drive.google.com/open?id=1-Af8SI...ueZWiwhrpi

Without thinking, MMH would be the natural answer to this questions.
Well, Royston of SmartInvestor shared Boustead Singapore which is the stock that he referred to in his article.
(click to read)

The keyword is actually "conglomerate", and MMH would not fit this title.  MMH only has 2 business segments, one is the slowly but steadily growing consumable tools business which is extremely reliable and trusted by its customer; and another one which seems to be fast growing (hopefully) and slowly gaining the trust in USA aka (spare) parts business.  This supplying of parts business was formally known as CMA and Chris was pushing hard on the "perfect part" strategy using highly automated process.  The reason why he is pushing so hard is obviously, he recognised that consumable tools biz is hitting a ceiling and there is a need to redeploy the profits earned from the consumable tools into another biz.  This time round, the investment must open up a new and much bigger TAM than the consumable biz.  As the world is still looking at Chris to execute his plan, the question remains whether the waiting is over (success is near) or there is still a lot of Work-in-progress?

From the latest QnA, it seems that MMH management had decided that enough is enough.  The focus would still be in organic growth and maintaining a fundamentally sounds financial and balance sheet.  This is a bit of surprised as before that, I perceived that MMH management would use the C19 to emerge stronger than before.  I guess, they had decided stronger means tighter synergy of people, process and technology and not mindlessly growing the business - which I think is ok to me too.  My rationale is simple, we do not know what will happen after C19.  What we are sure is the world norm will not be the same.  It's best to work on incremental improvement than a big leap. Noted.

Feel special?


Gratitude.

MMH@329
An up-to-date sharing of Semicon industry with focus on Singapore landscape.
The question on why MMH do not want to set up a factory in Taiwan, could be the reason - as I take note of the SWOT in Lei's video.

Sub-10nm, can MMH pull thru? can Singapore breakthru?
Unlikely siah. 



Gratitude.

MMH@345
Few days ago, DBS published a TP recommendation for MMH at $4.05.



For any valuebuddies who is not familiar with MMH, this would be a good read:

(link to edge)

The actual PDF is 29 pages and a rather easy read.

I'm not surprise that more analysts will starting to recommend MMH.  What surprise me is Paul Chew does not cover MMH when it's result was released.  I wonder what happens to Paul?

In any case, there are a lot of points and projections which makes sense to a investor.

I'm mindful that some valuebuddies prefers to point out MMH's weakness instead of keep repeating it's strength.

DBS kind of touch on a bit and allow me to share my thought:
1) MMH kept saying that there will only be a few suppliers in the sub-10nm space.
2) MMH vision is to be one of these suppliers.
3) By now, we know that there are nothing propitiatory such as Patents, trademark etc for MMH.  What MMH had is working hard (and harder) to work with customers to ensure perfect parts delivered at perfect time. Pure hardwork in gaining customers trust, day in day out.
4) What we also know is if a customer chosen MMH, they are likely to stick with MMH for life.  The opposite would likely to be true aka if a customer did not choose MMH, then they will not be MMH customer for a LONG LONG TIME.

Given these few points, my thinking is MMH had not been breaking thru in sub-10nm space aka non of the sub-10nm chips are using MMH's products.

Question is when can MMH breakthru into these space? The sooner the better, because based on point 4), if a customer already write-off MMH, then it will be a long long wait for the opportunities to come.



Gratitude.

Good morning valuebuddies.
Great to be up!
Wish everyone another chill day ahead.

Credit: https://www.businesstimes.com.sg/compani...tor-growth

MMH will be reporting it's 1H Result on 28 Jan 2022, likely during lunch break.

Given that C19 locked down and also electricity rationing in China, one would expect the result to be muted... unless, the hardworking and agile management team know how to navigate the terrain well.

Let's see.



Gratitude.

MMH@334

1H result is out and I think it's quite decent and especially the 6cts dividend is quite nice too... especially under current prolonged C19 situation, I am very appreciative of it's nice gesture to continue to share it's profit with shareholders.

Let's wait for the other business/investment analyst to put in their report.

Meanwhile, enjoy:

Gratitude.

MMH@330

After the 1H result released (with 6 cents dividend), there are no analyst report on MMH.

The only analyst still covering MMH is Royston from The Smart Investor dot com.
https://thesmartinvestor.com.sg/5-divide...th-s50000/


So far so good.

As far as I could see, most of our valuebuddies are on the sideline.  Especially those who had sold Micro Mechanics (like myself), are waiting for the right price for the re-entry. 

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Singapore Budget 2022: some pain for greater gain - Melody Tan
https://www.intheblack.com/articles/2022...udget-2022

To help sectors hard-hit by the pandemic, a Small Business Recovery Grant worth S$500 million will be provided for small and medium-sized enterprises (SMEs) that have been most affected by COVID-19 restrictions over the past year, such as the food and beverage, retail, tourism and hospitality sectors.

Key quotes from key stakeholders

Opinion leaders in finance and business share their takes on Singapore Budget 2022


Kam Wing Chow FCPA, Executive Director and CFO Micro-Mechanics Holdings

“The budget helps local SMEs to be more adaptive and competitive in the face of rapid change in the business landscape and the Covid-19 pandemic. Besides support measures to help SMEs upgrade their capabilities such as R&D collaboration with local institutions and financial assistance, there is a focus on reskilling and upskilling local workers to match market needs. The government will also spend more on digital infrastructure to facilitate the business environment. All are important for business and investors.

“One thing I really appreciate is the Green Transition. The carbon tax from S$5 per tonne of carbon emissions to S$25 per tonne, and eventually S$80 per tonne, shows the determination of the government to seriously look at climate change.


Gratitude.


Relax and watch Time(Inception)

MMH@3.12


Credit: https://www.choosemorganhill.com/news/20...ed-company

I was planning to read MMH's annual report over the weekend and just nice, I received not one but three copies in my letterbox. The same old stories and I really hope that MMH had cracked the sub-10nm challenges.

Quote:While it looks like the worst of the COVID-19 situation may be behind us, the Group continues to face significant challenges in the aftermath of the pandemic. These include staff shortages, inflationary pressures, supply chain shortages and other disruptions. Nevertheless, we have managed to keep the Group’s five worldwide factories running and focused on meeting the needs of customers.

Gratitude!

It is generally a tail of 2 cities for Micro-Mechanics - First is the immensely high ROE/margin backend parts business located in Asia. The 2nd is the non-profitable component business for frontend equipment manufacturers in the US.

As someone who has some experience with both frontend and backend, the first part of the business looks like a no brainer and it is for you to lose. To be entirely honest, there isn't a lot of (cutting edge) innovation in that part of the business (wire bonding, die attach) and it will  be pretty stable as it has proven over the years.

IMHO, the wild card for Micro-Mechanics would be the loss making US frontend component business. The Chip Acts to build Fabs in US will definitely open up the market for spare parts support, rather than having this spare parts support business outsourced/2nd sourced eventually in non-US Fabs.

TSMC plans to make more advanced chips in US at urging of Apple

Supply-chain disruptions and trade tensions with China have fuelled efforts to bring more manufacturing to the US and Europe. US lawmakers also passed the Chips and Science Act this year, offering US$50 billion in incentives for companies looking to create semiconductors in the country. TSMC is likely to receive billions in subsidies.

https://www.businesstimes.com.sg/compani...ging-apple

It will be good to start the development early to learn from his Old Man. And by his late 30s/early 40s, be ready to fully take over, and have a long run-away in front of him.

Appointment of Executive Director and Deputy CEO

Kyle is the eldest son of the Group’s founder and CEO, Mr Christopher Reid Borch. Kyle’s appointments dovetail with the Group’s succession planning. The Board, having reviewed his qualifications and work experience, warmly welcomes Kyle as a new board member and Deputy CEO.

https://links.sgx.com/FileOpen/MMH-Appoi...eID=741042