Mems Part III

Let me paste again what i wrote in part 2: Mems Part II

The key point for me is REASONABLE EXPECTATION.

Now look at how S&P expectation. As mentioned earlier..As can seen from the table posted by S&P, Mems did managed to post a net earnings of 13.7 million for its fiscal year 2005. What i see next is S&P projecting a net earnings of 17.9 million for Mems fiscal year 2006. Oh, this works out to be a growth rate of 31%. And the next fiscal 2007, Mems is projected to earn a net earnings of 47.6 million.Wow!from 13.7 -> 17.9 -> 47.6!!!!Sayyyyyy ... isn't S&P is projecting a compounded annual growth rate of 86.4% for Mems next two fiscal years??

I keep asking me-self this….a 86.4% compounded annual growth rate for the next two fiscal year?

Does Mems earnings power deserve such highly optimistic expectation?

Isn’t it just wayyyyyyyyyyyyy too lebih?

Mems reported its 2006 Q1 earnings today.

Quarterly rpt on consolidated results for the financial period ended 31/10/2005

It had sales turnover of 11.061 million. Net earnings was a decent 3.009 million.

Which is decent i guess...

However... consider the fact that folks like S&P was recommending a hold when Mems was trading at 0.64 when it first iniated coverage on the stock.

And now consider that S&P estimated/projected/assumed net earnings for Mems fy 2006 is at 17.9 million.

err... this 3.009 million net profit from Mems looks might disappointing, doesn't it?

how?

Was Mems performance really that poor or was the expectations/estimation/projected earnings simply too optimistic?

how?

Mems closed today's trade at 0.365 sen.