Micro-Mechanis (Holdings) Ltd- Review of FY 2013 Q3 result

Micro-Mechanics designs, manufactures and markets high precision tools, parts and assemblies for the semiconductor, medical, aerospace and other high technology industries. It has six manufacturing facilities located in Singapore, Malaysia, China, Thailand, the Philippines and the USA, and a direct sales presence in Taiwan, Indonesia and Europe.

Recently, the Group has just announced its FY 2012/2013 Q3 results. It is noted that Q3 2013 revenue has stayed relatively constant at approximately at approximately- S$9.2mil ( as compared to S$9.4mil in the compartive period). GP Margin has improved from 46% in the comparative period to 47.7% in current period. Management represented in the news that the improved GP margin is due to the effort put in place by the Group in improving operational efficiency and productivity. Profit before tax has increased by 36%, due to the improved GP margin and gain on disposal of property, plant and equipment of S$379k.

Based on our review, the Group has a relatively strong financial liquidity, with a net current asset of S$11.9mil and nil loans and borrowings as at 31 March 2013. The Group has S$7.4mil of cash and cash equivalents, S$7.0mil of trade and other receivables and S$3.3mil of trade and other payables.

The Group made a very comprehensive review (from our perspective) in certain aspect of the financial performance and operational statistics (e.g. utilisation rate). This is very helpful for investor to review and understand the Company before they invest in the Group's shares.

Just a snapshot of the EPS, NAV, Share price and estimated dividend of the Group, as below:

Net asset value per share as at 31 Mar 13- S$0.26

Bid price as at 19 Apr 2013- S$0.45

YTD EPS- 3 Quarters- S$0.0258

FY 2012 actual dividend- S$0.03 (assuming S$0.03 for FY 2013 full yeardividend, dividend yield will be 6.7% based on current share price of S$0.45)

Second Chance Properties Ltd

Second Chance Properties Ltd is an entity listed on SGX mainboard. According to the website of Second Chance Properties Ltd , it is involved in 3 core businesses:
- retailing of apparel
- retailing of gold jewellery
- property investment

We noted that the Group has generated consistent profits for at least past five financial year (i.e. FY 2008 till FY 2012). On 27 March 2013, the Group announced its half year result for the period ended 27 February 2013. We noted that the Group continued to be in profit-making position with a profit before tax of S$6.5mil for the half-year ended Feb 2013, as compared to preceding peroid of S$7.3mil. This is despite the increase in Group's revenue of approximately 4.7%.

Based on our personal interpretation, this could be due to:
- the decrease in GP Margin from 59.6% in prior comparative period to 57.9% in current period; and
- the decrease in gain on fair valuation of investment proprerties from S$2.8mil prior comparative period to S$0.4mil in current period

It is noted that EPS (basic) for the 6-month ended 28 Feb 2013 has decreased from 1.74 cents in prior comparative period to 1.04cents in current period. Based on our interpretation, the P/E ratio is about 20x. On the other hand, on 27 March 2013, the Group announced that: barring any unforeseen circumstances, the Group intended to distribute a tax exempt (one tier) dividend of 3.4cents per ordinary shares - this translate to a dividend yield of approximately 8% - assuming a market price of S$0.415.

Does the market value appears to be at a resonable range for you - if the P/E ratio of Second Chance Properties Ltd is at 20x?