SHAH ALAM: ACE Market-listed Mikro MSC Bhd aims to transfer to the Main Market of Bursa Malaysia Securities Bhd in five years, when it doubles its profit to RM15-RM20 million a year driven by business growth, from RM10.89 million in the last financial year ended June 30, 2017 (FY17).
Managing director Yim Yuen Wah said although it has met the profit requirement for the Main Market three years ago, it still wants to strengthen its financial muscle before making the leap.
“At this size, if we move to the Main Market, it is still small. We want to make it bigger first, doubling our current profit to at least RM15-RM20 million a year, then maybe we’ll consider the move,” he told SunBiz in an interview.
Yim has been adamant on the company remaining on the ACE Market but is now slightly more receptive to the idea of moving to the Main Market given the better prospects and investors’ interest there.
He said the group’s financials have been steady and it will be more aggressive to drive its business going forward. The company posted a net profit of RM5.48 million for the nine months ended March 31, 2018, down a third from the RM8.25 million it posted for the nine month ended March 31, 2017. This was on revenue falling marginally by 3.35% for the nine month period ended March 31, 2018 at RM35.92 million, compared with RM37.17 million for the same period in 2017.
Mikro MSC is in the research, development (R&D) and design of analogue, digital and computer controlled electronic systems or devices for use in electrical, electronic and other industries. It also provides technical consultancy and maintenance services.
Currently, Mikro MSC produces RM50-RM60 million worth of products a year. Some of its products include protective relays, digital power metres and power factor regulators.
It has estimated a capital expenditure of RM4-RM5 million in FY19 for its new factory and equipment. The new factory in Kota Kemuning is expected to be completed by year-end and will commence operations next year, which will provide the company more room for expansion with the increased demand expected from overseas.
Yim explained that its overseas market share in control products is still small, at about 20-30% in Vietnam and less than 1% in Indonesia and Thailand, which means that there is more room for growth, compared with about 50% in Malaysia.
While Malaysia currently contributes about 55% of its revenue, and the remaining 45% from overseas, Yim hopes that in FY19, this ratio will be reversed.
Yim noted that the company’s FY18 revenue is unlikely to be better than FY17’s revenue of RM50.4 million, because of the expiry of its pioneer status incentive and the slowdown in the Malaysian market this year.
He added however that Mikro MSC’s R&D is constant, especially those in redesigning its products to mitigate the material price increase and increase its profit margin.