MFS Technology Ltd

[cyclone]

For FY2013, the Group is organised into two main business segments:
1. Flexible printed circuits (FPC) which accounted for about 2/3 of revenue and asset, and bulk of the profit.
2. Printed circuit boards (PCB) which accounted for about 1/3 of revenue and asset

MFS Technology is on trading halt now.
Reason :

The Company has requested for a trading halt in its securities listed on the SGX-ST. It is in advanced stages of discussions regarding the sale of a significant asset. The Company will make a further announcement to update the shareholders of the Company on the matter as soon as possible. In the meantime, trading of the Company's securities on the SGX-ST will remain halted until a further announcement is made.

I wonder what significant asset the company is selling ?

<vested>

[investright]

From 1Q report:

The non-current asset classified as held for sale as at 31 March 2014 relates to the leasehold land located at No. 161, Yuhua Road, Yuhua District, Changsha, Hunan which the Group has committed to sell.

My guess is this should be that significant asset. Its booked at $879K. I wonder how much could they sell it for?

[Behappyalways]

PROPOSED DISPOSAL OF THE ASSETS AND LIABILITIES OF THE COMPANY
http://infopub.sgx.com/FileOpen/MFSBindi...eID=308499

[BlueKelah]

I am a little confused but what this means is that they are selling off everything and end up as a listed shell company?

does this mean it will eventually gap up to the cash value?

this one on my radar, was waiting for a bit more net cash to buy in. too late now

[Harvest Time]

Bought some MFS, I hope can get a bit cheaper later.

[mohican]

I am a little confused but what this means is that they are selling off everything and end up as a listed shell company?

does this mean it will eventually gap up to the cash value?

this one on my radar, was waiting for a bit more net cash to buy in. too late now

In a nutshell, yes. They will end up as a cash company assuming the sale is completed.

I think it will trade at a discount to the cash value as:

1) 5% of the purchase consideration will be retained by the purchasers for a 12 month period to cover pre-completion tax liabilities etc, which may or may not materialise. Although not explicitly stated in the announcement, it is typical for sale and purchase agreements to include reps and warranties and the 5% withheld could potentially be used to offset any warranty claims.

2) there is uncertainty as to how this cash will be deployed.

There is also no certainty that this transaction will complete as the entry into a SPA is still subject to a number of conditions, including due diligence.

[Behappyalways]

bought some too yesterday....so vested now

Bought some MFS, I hope can get a bit cheaper later.

[Harvest Time]

I will explain more why I park some money here.

I will mention FA (result) first. Hoping when the deal is done soon, I can post more on the future plan.

1Q 2014 net profit is $1.658m. EPS 0.251 cents per quarter.
2Q 2014 net profit is $4.234m. EPS 0.648 cents per quarter.

1Q 2013 net profit is $1.202m. EPS 0.184 cents per quarter.
2Q 2013 net profit is $1.288m. EPS 0.197 cents per quarter.

The existing company management has improve the result.

Comment from 2Q 2014
Having benefited from the momentum built up with our existing customers and the contributions
from a diversified customers mix, the Group plans to invest selectively to grow its technological
capability in order to compete effectively; and will continue to pursue new customers and
product opportunities to diversify its revenue streams and support its growth objectives.

[tiyana]

good morning.
If the del goes through, will MFS distribute the cash or will they reinvest?
UE has a huge stake in MFS.
With Charoen eyeing UE, any idea if it would reinvest into a property play?

thanks.

[Behappyalways]

most probably they will do a RTO. As for cash distribution......probably.....


UE sold the assets of MFS instead of the company so that meant they want the shell company....a RTO is probably on the card. A friend highlights to me that they change a new CFO recently. A higher profile one so most probably they are going to scale up instead of scaling down.

what kind of rto?

my guess is UE's property assets....a reit or something.....
but now with Charoen coming in, if he manages to buy UE, then he might put something else into MFS.

vested....