GEORGE TOWN: MMS Ventures Bhd, which counts renowned LED-makers Osram and Lumileds among its customers, is anticipating a better financial year ending Dec 31, 2016 (FY16) in terms of both revenue and earnings, driven by both its smart devices and automotive lighting segments.

Chairman and chief executive Sia Teik Keat of the ACE Market-listed firm, based in the Bayan Lepas industrial zone, said the group hoped to achieve RM40 million sales in FY16 and book in better profits.

Its FY15 net profit came in at RM8.08 million on a revenue of RM31.29 million.

The group makes automated systems and machines, primarily for LED testing, vision and handling, including vision inspection under its smart devices segment, and the testing of LED components for vehicle parts like headlights and tail lights under its automotive lighting segment.

“We hope contributions from these two segments will help us achieve RM40 million revenue in FY16. We now have about RM9 million orders, which should last us until the third quarter of the year.

“We will have to work on picking up orders for the fourth quarter, as generally, most of our orders would have been delivered in July (the third quarter),” Sia told The Edge Financial Daily in a recent interview.

Presently, the group’s smart devices segment contributes 40% of its revenue, while the automotive segment contributes 30%. Its remaining three segments — general lighting, semiconductors and original equipment manufacturing — contribute 10% each.

About 60% of its customers are based in Europe and the US. The rest are locally-based multinationals.

As most of MMS Ventures’ transactions are denominated in US dollar, the group stands to gain when the greenback strengthens against the ringgit. Last Friday, the US dollar gained 0.26% to 4.09 against the ringgit, although it had slipped 4.78% year-to-date against the same, from 4.2943 on Dec 31 last year.

The group’s testing machines, which cost between US$30,000 and US$200,000 (RM122,400 to RM816,000) to produce one, sell for between US$50,000 and US$300,000 each. MMS Ventures sets aside about RM1.1 million to RM1.5 million for research and development expenditure yearly to develop and build its machines.

For the second financial quarter ended June 30, 2016, the group reported a 59.9% net profit gain to RM5.71 million from RM3.57 million a year ago, thanks to a 75.5% rise in revenue to RM20.07 million, which the group attributed to newly acquired customers from the smart devices segment.

This led to a cumulative six-month (1HFY16) net profit of RM5.49 million, up 5% from RM5.23 million a year ago, while 1HFY16 revenue grew by 25.3% to RM23.91 million from RM19.08 million.

LED testing equipment has been MMS Ventures’ core competency since its listing 10 years ago in 2006.

On future projects, Sia said the advent of the Internet of things, which allows everyday objects to have internet connectivity, will open up room for more applications using LED functions.

“This would be in the form of LED sensors or laser sensors. We hope to be able to work with companies which are in this line of business, probably in the next two years. We believe with our LED-tester knowledge, we would be able to tap [into] this segment,” he said.

Also in the pipeline is its proposed listing transfer to the Main Market of Bursa Malaysia, but Sia declined to say when it will happen. “All I can say is it’s in the process and we are working on it. We are aiming for a transfer to the Main Market soon.”

The group’s share price, which hit a one-year high of 75 sen on Nov 5, slid to its one-year low of 45 sen on March 7 this year, down 30 sen or 67%.

Sia and MMS Ventures non-executive director Goh Kim Hock control some 44.5% of the company.

Last Friday, its shares closed one sen higher at 64 sen, valuing it at RM102.35 million.