MMS Ventures Bhd
MMS Ventures (MMSV) designs and manufactures industrial automation as well as precision die sets, jigs and fixtures for the LED and semiconductor production industries.

MMSV’s past financial performance has been erratic, with losses in 2008, 2009 and 2012. However, it appears to have turned the tide since last year. The company attributes the turnaround to the switch in focus from producing semiconductor material test handlers to customised LED test equipment.

Revenue declined from RM25.7 million in 2010 to RM16.3 million in 2012 before recovering to RM26.7 million in 2013 due to increased orders for custom-made machinery in the LED sector.

Growth momentum appears strong for 2014, with half-year revenue of RM16.5 million already making up 66.7% of the full year revenue in 2013. That translated to stronger net profit of RM4 million for 1H2014, amounting to 80.3% of 2013’s full year profit of RM5 million.

At 59.5 sen, MMSV is trading at 3.9 times its book value of 15.3 sen per share with trailing 12-month trailing P/E ratio of 14 times, with a small market capitalisation of RM 97 million.  Its return on equity and return on assets were high at 32.9% and 32.1%, respectively.

The company’s cash on hand has been building since 2010, totalling RM10.1 million as at 30 June 2014. This translates to 6.2 sen per share, or 10.4% of the current share price.  On 20 May 2014, MMSV announced a dividend of 1 sen per share to shareholders, the first payment in seven years since 2007.

With the company turning around, investors will be keen to see how it plans to grow the business and use its rising cash pile, to either reinvest or return excess cash to shareholders.

This article first appeared in The Edge Financial Daily, on November 19, 2014.