DMX Technologies

An undervalued company with solid fundamentals and strong growth.

surprisingly, nobody has started a thread discussing the merits of this company. KDDI and Venture Corporation both are major shareholders and the company has a strong growing digital media business. reported solid results for this quarter. seems like a seriously undervalued counter.

(14-11-2013, 10:58 PM)n3wbie Wrote: surprisingly, nobody has started a thread discussing the merits of this company. KDDI and Venture Corporation both are major shareholders and the company has a strong growing digital media business. reported solid results for this quarter. seems like a seriously undervalued counter.

When Venture Corp became a substantial shareholder that time, they bought the stake at 70+ct. They even have to write down the investments when the DMX share price slide. Now at a mere 20+ ct. if its undervalue i wonder why Venture didnt pump in more money or take over the company?

Whats the PE, PB ratio? I only know DMX changed CEO and an accountant trained lady took over as CEO.

Sure DMX had been reporting a good set of results but is it cheap for a reason? It seems like A company that can bill but expects money only much later - 1/4 of trade receivables due more than 1 year, another 1/3 between half to one year.

It becomes a working capital mgmt game - I dun see them being able to do the terms (who would) for suppliers, employees. So cash is being drained, they can't pay much dividends (if any). Not much hard assets to obtain secured borrowings.

Eventually they have to think about other available funding options - get more from shareholders, debt securitisation etc.

3/4 of current assets are trade receivables which for most companies would have been liquid, but in DmX's case quite misleading as a significant part of it is really non-current (>12 months looking at historic patterns).

Are u comfortable w such a business?

(15-11-2013, 06:38 AM)FatBoi Wrote: Sure DMX had been reporting a good set of results but is it cheap for a reason? It seems like A company that can bill but expects money only much later - 1/4 of trade receivables due more than 1 year, another 1/3 between half to one year.

It becomes a working capital mgmt game - I dun see them being able to do the terms (who would) for suppliers, employees. So cash is being drained, they can't pay much dividends (if any). Not much hard assets to obtain secured borrowings.

Eventually they have to think about other available funding options - get more from shareholders, debt securitisation etc.

3/4 of current assets are trade receivables which for most companies would have been liquid, but in DmX's case quite misleading as a significant part of it is really non-current (>12 months looking at historic patterns).

Are u comfortable w such a business?

Very valid points indeed and thanks for sharing your view! Funding would be quite an issue if it is via placement etc, considering the share price is trading close to its 52-week low with substantial selling pressure too recently.

The situation of cash drain is probably due to its system integration businesses in both ICT and digital media which are largely capital intensive too but I think what the market fails to recognize is the contribution on the bottomline from the digital media business.

Quite honestly, the case of a privatisation actually makes economic and business sense. I consider it to be an undervalued counter based on a simple EV/EBITDA calculation which place them at about 3.8. This is certainly a very attractive figure for PE funds (since it is a profitable business with growth prospects), not to mention that DMX's free float in the market is just under 30%.

Share price plunges ~19% today due to CEO & CFO arrested.


DMX: CEO & CFO Arrested By Commercial Crime Bureau Of HK Police Force, Executive Duties Suspended.

10 Feb 2015 10:23

DMX Technologies Group Limited wishes to announce that Ms. Jismyl Teo Chor Khin, the Executive Director and Chief Executive Officer of the Company and Mr. Skip Tang, the Chief Financial Officer of the Company, have been suspended from all executive duties with effect from 9 February 2015 for an indefinite period. The Board made its decision after it was informed by the CEO that the CEO and CFO were arrested by the Commercial Crime Bureau of the Hong Kong Police Force on 3 February 2015. The CEO and CFO were subsequently released on bail. No formal charges have been laid by the HK Authorities against the Company or any of its officers, including the CEO and CFO...

http://dmx.listedcompany.com/news.html/id/449249

(not vested)

Up the lorry.

(A) ISSUES RAISED BY INVESTIGATIONS BY HK COUNSEL
(B) REQUEST FOR SUSPENSION OF TRADING IN SHARES

The Findings indicate that there were irregular accounting practices at two of the Company’s
subsidiaries in 2008 and 2009. Based on the Findings, the Company was advised by HK
Counsel to make a report to the Hong Kong Police Force and did so on 23 March 2015.
In addition, HK Counsel has been tasked by the Company to continue and expand the scope
of its investigations.
In view of the above, the Company has requested for the trading halt to be converted into a
suspension of trading of the Company's shares on SGX-ST with effect from 9.00am on
25 March 2015.
(vested)