Saturday, February 09, 2008

MTouche

Saw that Star Bizweek carried a huge article on MTouche.


  • After a tough year
    It is easy to regard wireless application service provider Mtouche Technology Bhd as a stellar performer on Mesdaq. Since it made its debut on the exchange three years ago, its unique business model and focus on being lean and mean has won over investors with a huge appetite for high growth stocks.

As mentioned in the article, MTouche indeed had performed grandly during its early days.

  • For its financial year ended December 2005, Mtouche recorded net profit of RM12.62mil.

    In the following year, it continued to excite when its net profit increased by 61.17% to RM20.63mil.

    At the height of its momentum, Mtouche's share price stood at the RM4.18 mark.

It was remarkable. If not mistaken the stock was trading well below 1.00 back in 2005. And with a peak of rm4.18, this stock was simply a darling.

Then came 2007.

Well, the below picture simply said it all.

(the picture was posted on a posting: here )

Price of MTouche fell to a amazing low price of 0.93 on Nov 16th 2007.

And in today's Star Bizweek, the company explains 2007.

  • In defence of 2007

    No doubt, 2007 was a challenging year for the company. Up to the nine months to September 2007, the company recorded net profit of RM5.4mil.

    As indicated in its announcement to Bursa Malaysia, the poor results were largely due to higher expenses from its new subsidiaries, provision of doubtful debts and higher depreciation and amortisation of intellectual property.

    This is largely in relation to setting up new subsidiaries in Hong Kong, India, and Vietnam.

    The group has also spent over RM30mil expanding via acquisitions.

    These include a 20% stake in IdotTV Sdn Bhd, 51% stake in Singapore-based Inova Venture Pte Ltd, 30% in GMO Global Ltd, 10% in British-based Cellcast plc and a 70% stake in British Virgin Islands-based Rayson Management Ltd.

    Investors with short investment horizons didn't waste time off loading their shares in the company and this resulted in the counter falling off the radar screens of investors through much of last year.


    Another humbling point – its share price has slid to astounding levels; it is currently trading at 58 sen.

    Soon, Mtouche is set to announce its full year results (by mid February) and the picture may continue to look bleak.

    Its chief executive officer Eugene Goh however explains that much of the year was spent on keeping its house in order.

    “We expanded so fast in 2006 into many markets. So, in 2007, we streamlined our acquisitions. We put in our own people and our own expertise in these countries. It took time to do that.”

That was the company's explanation for the poor 2007.

This is how MTouche has performed since Nov 2007.


MTouche last traded at 0.585!

WOW!

I guess this is why the experts always say that bottom fishing is so damn difficult and incredibly hazardous to your money!!!

**********

I just realised that I have to take into consideration that MTouche just has a rights issue c/w warrants completed on Jan 2008! ( See announcement here ) Hence the comments of the low of 0.585 is probably very harsh!

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