It was my second time attending Micro-Mechanics (Holdings) Ltd (SGX: 5DD) AGM. I might be mistaken, but I sensed a happier pre-AGM mood as compared to previous year.
Hmm, maybe it’s the snack that they provided this year?
Jokes aside. Perhaps the optimistic mood was a reflection of the promising 1Q 2025 results, indicating potential for sustained growth in the coming quarters.
Revenue for the quarter increased by 2.5% year-on-year (YOY) to S$16.2 million, with net profit jumped by 14% to more than S$3 million.
I like that they’ve broken down the revenue this quarter to show the Wafer Fabrication Equipment (WFE) segment’s contribution. As illustrated from the chart, both consumable tools and WFE segments saw an uptick in the revenue.
It’s particularly encouraging to see the WFE segment, which is under the purview of MMUS, achieved profitability after years of losses.
Here are some other interesting Q&A exchanges, though not verbatim.
1. Is the company benefitting from AI?
Deputy CEO Kyle shared that they do not know what their customers are working on.
But based on the stringent requirement for the parts, they can only guess that these parts are used in wafer fabrication equipments for producing the more advanced chips.
CEO Chris added that the 50% gross profit margin is indicative of a competitive advantage and that the company aims to increase its market share within this segment.
For those unfamiliar with the business, Micro-Mechanics doesn’t supply components directly to wafer fabrication plants. Rather, they provide parts to manufacturers of equipment used in these facilities.
2. Can cost at MMUS be reduced further?
The primary objective of the MMUS restructuring was strategic. By focusing on areas where the company possesses a competitive advantage, significant cost savings have been achieved.
3. Any intention to list in US for better valuation?
CEO is grateful to be listed in Singapore Exchange. He shared that the company has learnt much about good governance here. He believes that if the company continues on getting the fundamentals right, they will be able to protect shareholder value.
4. Will the new directors have their skins in the game?
There are two new independent directors replacing the two retired. Both have expressed interest in acquiring a stake in the company, as per their usual practice with other companies.
Kazuo Joseph Takeda is the more intriguing of the two new directors. With a background in senior management roles at Fortune 500 companies and tech startups in the US, he brings a strong operational and productivity focus to the board.
Beside the questions asked during the AGM, there were more questions asked this year prior to the AGM. You can read the company’s responses here.
Despite its modest market capitalisation of only S$234 million, Micro-Mechanics Micro-Mechanics has proven resilient, weathering both industry booms and busts.
I continue to believe in their potential to deliver good long-term returns to shareholders, hence I will maintain my position in the stock.
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