MTQ Corporation Limited

[tonylim]

Very possitive news to MTQ.

[Musicwhiz]

Dear all, Part 1 of my analysis of MTQ's FY 2010 Results is now up on my blog. Please feel free to leave comments, thanks!

A snippet as follows:-

"If we glance at 1H versus 2H, it is quite apparent that revenues improved dramatically in 2H as the dip was only 5.2% and was attributed mainly to Oilfield Engineering. Engine Systems saw a boost in revenues due to the aforementioned Bosch deal, and also the purchase of Premier which expanded MTQES’ network around Australia. Cost of Goods Sold had dropped by 17.1% for 2H against a drop of 15% for 1H, and this showed better economies of scale as MTQ moved along in the financial year. The FY 2010 resulted in a drop of 8.8% in revenues while COGS dropped by a larger 16.1%, resulting in a RISE in gross profit of 4.2%. Cost control is very apparent at this juncture and it was a very good sign that even though revenues fell due to decreased spending by oil majors on E&P, MTQ had managed to eke out a small rise in gross profit due to their better performing Engine Systems division. With the closure of unprofitable segments of MTQES, I believe this division will continue to grow and expand with improved margins as time goes by."

[Musicwhiz]

From Straits Times today. Bahrain is courting more Singaporean companies......

May 19, 2010
sme spotlight
Bahrain seeks more investments from S'pore firms
By Jonathan Kwok

THE tiny Gulf state of Bahrain has weathered the recession and wants Singapore companies to again look to the region to invest.

Mr Kamal Ahmed, chief operating officer of Bahrain's Economic Development Board, told a business dialogue session that the 36 million people in the Gulf Cooperation Council (GCC) states make for an important market.

'Today, you are talking about a US$1 trillion (S$1.4 trillion) market, a high GDP per capita, the highest concentration of millionaires (in the world),' he said.

'Fifty per cent of the population in the Gulf is below 20, so there is strong purchasing power in the region.'

Bahrain - the size of Singapore with a population of slightly over one million - is well-placed for investors. It is next to Saudi Arabia, which has the world's largest reservoir of oil, and adjacent to the world's No. 1 gas exporter, Qatar.

Business-friendly Bahrain has zero corporate or personal taxes. Laws allow foreigners to fully own local companies. The state also has a well-trained and English-speaking workforce.

Mr Ahmed said that firms in finance, logistics, information and communication technology, as well as high value-added manufacturing sectors like the production of downstream aluminium products, would be welcome.

Some two dozen government and business representatives from Bahrain and Singapore attended the session held at the Singapore Business Federation office in Keppel Towers last Tuesday. Some said that there was potential for education, food and beverage and health-care firms.

Bilateral trade reached $557.06 million last year, up 18 per cent from 2008. Bahrain managed gross domestic product growth of over 3 per cent last year even as other countries saw their economies shrink.

Mr Ahmed told The Straits Times that investor confidence has been enhanced because Bahrain did not have to bail out any banks during the downturn. 'We didn't have to give any guarantees because our financial institutions are sound and strong.'

Several Singapore firms have a presence in Bahrain. The Islamic Bank of Asia, a joint venture between DBS Bank and some GCC partners, has an office there.

CapitaLand is building Raffles City Bahrain at Bahrain Bay, while BreadTalk opened two outlets in Bahrain through a local franchisee last year.

Engineering firm MTQ is building a facility to repair and refurbish oilfield equipment for Gulf customers which is expected to be operational early next year.

MTQ's chairman and chief executive Kuah Kok Kim said that Bahrain offers easy access to the region. 'It has the most business-friendly working environment in the entire Middle East region.'

But not all firms have found it smooth-sailing. Banyan Tree in Bahrain is embroiled in a legal dispute with the owner of Banyan Tree Al Areen resort, the Al Areen Holding Company.

[tonylim]

Many investors are begining to apprecite MTQ now.

[Musicwhiz]

Dear all, Part 2 of my analysis of MTQ's FY 2010 results is now up on my blog. Please feel free to leave comments, thanks!

A snippet as follows:-

"For 2H FY 2010, the ratio of sales for both divisions remains constant as in 1H FY 2010, and this is due to the stronger sales in Engine Systems compared to 2H FY 2009 which helps to boost the revenue figure amid a slump for Oilfield Engineering. For 2H FY 2009, Oilfield Engineering took up nearly two-thirds of revenues (66.6%) while Engine Systems took up just one-third (33.4%). It should be noted that revenues for Oilfield Engineering recovered slightly in 2H FY 2010 compared to 1H FY 2010 (from S$19.7 million to S$20.6 million), while for Engine Systems revenue improved to S$21 million from 1H FY 2010’s S$20 million, presumably due to the scaling up of offerings by MTQES."

[Musicwhiz]

Dear all, Part 3 of my analysis of MTQ's FY 2010 results is now up on my blog. Please feel free to leave comments, thanks!

A snippet as follows:-

"In Jan 2009, MTQ announced that they were venturing into Bahrain, a country in the Middle East, and were planning to build a new facility there up to 3 times the size of their Singapore Pandan Loop operations. Since then, they had awarded a contract to build Phase I of the development to a contractor, and work has since begun and is targeted to be completed by early 2011. Assuming the facility starts to attract customers and generates revenues, the revenue stream would be far more stable as the oil majors in the Middle East region are not so affected by fluctuating oil prices; rather their cost of production is probably just US$1 to US$2 per barrel!"

[Musicwhiz]

It is interesting to note that Mr. Kuah Kok Kim had increased his stake in MTQ on August 17, 2010, exactly 5 months after his last transaction on March 17, 2010 where he purchased 93,000 shares at a price of S$0.72. The most recent transaction sees him buying 25,000 shares at a price of S$0.83, which raises his total stake in the Company to 22,499,000 shares (or 25.55% of total issued share capital less treasury shares).

This could signify a vote of confidence for the prospects of the Company as his son Mr. Kuah Boon Wee had also recently purchased shares in the company on two separate occasions (11 and 12 Aug 2010) where he bought a total of 174,000 shares at 85 cents apiece, raising his stake to 1,578,000 shares or 1.79% of the Company.

I had personally also noted a very large transaction of 88,000 shares at 87.5 cents on August 17, 2010; but am unsure if it was either father or son who had purchased this block.

Anyhow, with the 1H FY 2011 results coming up in Nov 2010, there is good reason to look forward to an interim dividend as well as updates on the business, including the progress of their new workshop and facility in Bahrain. It is expected that the new facility which is 30,000 square metres will be fully operational from Jan 2011 onwards, although full contribution is not likely till April 2011 (i.e. FY 2012).

[Musicwhiz]

Today, during lunch time, it was announced that Mr. Kuah Kok Kim had purchased another 96,000 shares in MTQ at an average price of S$0.861, further raising his stake to 22,595,000 shares or 22.66% of the Company. This was even higher than his average purchase price of S$0.83 two days before and (to me) it provides a further signal of confidence in the Company's prospects.

[kennynah]

So MTQ is valued at ~S$86mil, correct?

[Musicwhiz]

So MTQ is valued at ~S$86mil, correct?

At S$0.86, it's about S$75 million.