M3Tech fixes private placement shares at 13 sen apiece

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KUALA LUMPUR (June 8): Mobile technology solutions provider M3 Technologies Asia Bhd (M3Tech) — whose counter has slumped 33.33% year-to-date — has fixed the price of the first tranche of its private placement shares at 13 sen apiece.

In a filing with Bursa Malaysia this evening, the loss-making M3Tech said the price of its first issue represented a 4.2% discount to its five-day weighted average price of 13.57 sen, calculated up to June 5, 2015.

M3Tech is expected to raise RM780,000, based on its plan to issue 6 million shares in the first tranche.

To recap, M3Tech had on Feb 17 this year proposed to raise some RM3.23 million by issuing 17.96 million placement shares, which represented up to 10% of its issued and paid-up capital.

According to M3Tech, the bulk of the proceeds will be used for working capital requirements that include product commercialisation expenses, purchase of new products, payment to suppliers and other operating and administrative expenses.

M3Tech is controlled by its founder and managing director Lim Seng Boon, with a 21.34% stake, which will be diluted to 19.41% upon completion of the private placement.

M3Tech (fundamental: 1.25; valuation: 0.9) has been bleeding losses for the last three financial years since June 30, 2013 (FY13).

In the third quarter ended March 31, 2015 (3QFY15), M3Tech saw its net loss narrow to RM4.01 million or 2.27 sen per share from RM5.55 million or 3.13 sen per share in 3QFY14, while revenue dropped 19.3% to RM24.76 million from RM30.7 million a year ago.

The stock has fallen 33.33% from 21 sen on Jan 5, 2015 to close at 14 sen today, giving it a market capitalisation of RM24.765 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)