A Look At Mems Technology Again

Now that Mems had finally reported its earnings and resumed its trading, I thought I take a look at Mems again.

Quarterly rpt on consolidated results for the financial period ended 31/1/2008

Net earnings was only 1.434 million from sales revenue of 16.464 million. Only 1.434 million. This is utterly smallish eh?

Let's look at the Balance Sheet.

Trade receivables now totals at 34.998 million. Reported period is at 31st January 2008. Compare to the column on left, receivables were only 22.824 million. Which means receivables increased a whopping 12.174 million. Which is extremely massive when the company's net earnings is only 1.434 million for this reported period.

Cash and bank balances as at January 2008 shrank to 9.874 when compared to July 2007's balance of 18.995 million.

And the below table highlights Mems' liabilities:

Total loans as at 31st Jan 2008 is at 43.355 million compared to a loan total of 34.267 million in July 2007. An increase of 9.088 million in loans.

How?

As it is what do you see?

I see its net earnings as rather extremely small with low profit margins with a rather below average set of balance sheet. Receivables and debts are increasing while cash is shrinking!

Back in July 2007, Mems was trading around 81 sen with a market capital of 531 million.

Oh yes by that much!

Given the current data, do you reckon that Mems justified such valuations?

Mems last traded at 14.5 sen, with a market capital of only 95 million!

And would you consider this as a clear decisive destruction of market capital???

Here is a newsclip on Mems:

• 07-05-2008: MEMS up 2 sen, heavily traded on re-quotation
  by Cindy Yeap
  
  KUALA LUMPUR: Shares of MEMS Technology Bhd were heavily traded on re-quotation yesterday after a nine-week suspension for failing to submit its annual report in time.
  
  The stock rose as much as three sen or 20.7% in early trade to 17.5 sen, but ended the day at 16.5 sen, up two sen or 13.8% from the 14.5 sen it last closed at on Feb 29.
  
  The Mesdaq-listed wafer fabrication and packaging company led the most active list yesterday with 30.51 million shares done, just ahead of Keladi Maju Bhd’s volume of 29.2 million shares.
  
  In retrospect, MEMS shares had plunged 16 sen or 44.44% to 20 sen on Nov 28 last year after the company said it was not able to issue its audited financial for the year ended July 31, 2007 in time as its external auditors had “expressed concerns” over certain transactions relating to its revenue as well as some of its assets.
  
  Its board had then ordered a special audit and decided not to recognise RM19.72 million revenue, which resulted in its unaudited net profit being cut to RM13.45 million from RM21.47 million. MEMS made RM13.11 million net profit on the back of RM53.7 million in revenue for the said financial year, according to its audited accounts submitted on April 24.
  A trade suspension on its shares, imposed on March 3, was lifted after MEMS submitted its annual report on Monday. The annual report was due for public release by Jan 31 this year.
  
  In its report, the company’s external auditor KPMG said the company’s accounts are “not subject to any other qualifications” apart from the several points it made pertaining to MEMS’ wholly owned subsidiary SenzPak (M) Sdn Bhd.
  
  MEMS has proposed to appoint Atarek Kamil Ibrahim & Co as its external auditor at its upcoming AGM as KPMG did not wish to seek re-appointment. The company’s AGM will be held on May 30.
  
  MEMS and its unit SenzPak are still under investigation by the Securities Commission, according to its 2007 annual report.