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Moolah
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Posting #1: Wed Nov 21st, 2007 08:25 |
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Was reading OSK report on Mems,...
does not sound good at all.... cos if the implications or speculation is true... then what we have is another...'mi-stating of earnings'... 
anyway... i did a blog on it.. which includes the osk report.. http://whereiszemoola.blogspot.com/2007/11/osk-comments-on-mems.html
any comments?
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Moolah
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Posting #2: Wed Nov 28th, 2007 01:21 |
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Posted an update on this one my blog: http://whereiszemoola.blogspot.com/2007/11/update-on-mems-accounting-issue.html
So what is happening is:
In light of the above, and after due deliberation, the Board has resolved not to recognize revenue of RM19.72 million. As a result of this, the unaudited consolidated revenue for the financial year ended 31 July 2007 will be revised to RM53.7 million. This will consequently result in the unaudited profit after tax for the financial year ended 31 July 2007 to be reduced from RM21.47 million as announced on 27 September 2007, to RM13.45 million.
Reduced from 21.47 million to 13.45 million.
And this the said Sept Q earnings.
Quarterly rpt on consolidated results for the financial period ended 31/7/2007
Which means an updated table will look like this...
earnings
2005 13.693
2006 13.975
2007 13.45 |
Now tell me... that's a rather flat earnings, no?
So wasn't Mems touted for its growth?
I have made several postings on this stock too.
Consider the following posting: Sept 2005 (my first ever blog post! )
http://whereiszemoola.blogspot.com/2005/10/sp-coverage-on-mems.html
S&P made the following projection..
FY Jul./MYR mln 2004 2005 2006F 2007F
Revenue 33.8 48.3 80.3 223.1
Net Profit 8.2 13.7 17.9 47.6 |
See how they projected some 17.9 and 47.6 million?
Update to that posting: http://whereiszemoola.blogspot.com/2007/03/mems-part-vi.html
And then consider the blog posting here: http://whereiszemoola.blogspot.com/2005/12/mems-part-iv.html
In which I made the following remarks:
Did Mems deserve the rather optimistic projections, assumptions from folks in CIMB, OSK and even S&P?
How?
For me, i believe this is a rather simple example of an overly-hyped stock which simply failed to meet their expectations. It reminds me of Warren Buffett's mumbling that when the tide resides, we will know who has been swimming naked. Well, from Mems actual reported quarterly earnings, we can clearly see the nakedness in Mems share price and of course the insane earnings projections assigned to Mems.
So curious to know... since Mems has not meet these so-called expectations... i wonder... i really wonder... did Mems failed or did the market itself failed? What do you reckon?
Last but not least... http://whereiszemoola.blogspot.com/2006/03/mems-part-vi.html
That's how Mems had performed since listing, which was pretty decent i think. Yes, the cash flow is a bit questionable but all in Mems is decent. (Oooh.. cash flow looking really questionable!)
Did Mems deserve the rather optimistic projections, assumptions from folks in CIMB, OSK and even S&P?
How?
For me, i believe this is a rather simple example of an overly-hyped stock which simply failed to meet their expectations. It reminds me of Warren Buffett's mumbling that when the tide resides, we will know who has been swimming naked. Well, from Mems actual reported quarterly earnings, we can clearly see the nakedness in Mems share price and of course the insane earnings projections assigned to Mems.
So curious to know... since Mems has not meet these so-called expectations... i wonder... i really wonder... did Mems failed or did the market itself failed?
What do you reckon?
How?
With a questionable cash flow and now that Mems is restating a chunk of their profits made last fiscal year... what do you think of this company?
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Moolah
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Posting #3: Wed Nov 28th, 2007 03:33 |
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Here's a snapshot of RHB's write-up...
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Moolah
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Posting #4: Wed Nov 28th, 2007 03:42 |
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If one had noticed.. MEMS stock was sliding like nobody business... just like GPacket.
And today... we all know what exactly was the reasoning behind it.
And here's another interesting issue yet again...
when a so-called good investment stock keeps falling and falling... is this a good chance to buy the stock?
For me, good investment stocks do not usually free fall without a solid reasoning. And in our kampung market, it's best not be a hero.
Find out the reasoning first. If no news... perhaps.. it's an opportunity to invest.
And if one does not know the reasoning... it's best we stay away.
Not all dips are buying opportunities. Some do end up as a drastic value trap!
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hhc1977
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Posting #5: Wed Nov 28th, 2007 05:50 |
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Ahem,
Do these stocks sounds deja vu? Remember AKNMessage (i think) meteoric rise and collapse later on?
That's why MM sceptism on Messdaq is most of the time well-founded.....
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Moolah
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Posting #6: Wed Nov 28th, 2007 07:40 |
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All is giving us such a bad name.
In Mems case, yes it was not as drastic as say Megan or Transmile but over stating earnings is simply unacceptable.
Consider the following...
If Mems did not over-state their earnings, there would be no growth for 3 years!
Without the growth, MEMS would have been rather unattractive and most of all, it would never had commanded such a rosy stock price.
Just in July 2007, MEMS traded at a high of 81 sen, giving it a market valuation of 531 million. Now based on an actual earnings of 13 million, surely this 81 sen would have been an insane stock price for Mems!
Now consider this... let me flip it around....
Mems is now trading at 25 sen. Its market valuation is only some 163 million.
Ahem... consider this the other way around.. if the market valuation now is about fair for a company making only 13 million... then Mems is worth only some 163 million.
However.. due to the overstated earnings... MEMS was valued as much as some 531 million!!!
How?
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Moolah
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Posting #7: Thu Nov 29th, 2007 01:51 |
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Posted on BTimes...
SC probing MEMS for possible irregularities
Following MEMS' announcement that its auditors raised concerns over certain transactions, analysts have either downgraded or terminated coverage on the stock
By Adeline Paul Raj and Chong Pooi Koon Published: 2007/11/28
MEMS Technology Bhd, which lost almost half its market value yesterday, is being probed by the Securities Commission (SC) for possible accounting irregularities.
Analysts downgraded or terminated coverage on the stock yesterday after auditors, KPMG, raised concerns over the technology firm's accounts.
"The SC is investigating MEMS for possible irregularities in their financial statements," an SC spokesperson told Business Times yesterday.
Shares of the Mesdaq-listed firm nosedived yesterday, letting off 16 sen (or 44 per cent) to close at an all-time low of 20 sen. The stock fell by as much as 17.5 sen (47 per cent) earlier in the day.
It was the day's most active counter, with some 63 million shares traded, almost 13 times more than the previous day's volume.
Credit Suisse, which previously had an "outperform" recommendation on the shares with a target price of RM1.06, dropped coverage on the stock yesterday.
OSK Investment Research downgraded the stock to "sell" from "neutral" before, with a target of 29 sen while Kenanga Investment Research cut it to a "hold".
MEMS announced late on Tuesday that its external auditors were concerned about certain transactions relating to revenue and property, plan and equipment.
As a result, the company - which had been seeking a listing transfer to the main board - resolved not to recognise RM19.72 million of its revenue, leading to a 27 per cent lower unaudited revenue and a 37 per cent lower net profit for 2007.
This means that compared to a year ago, its revenue grew by only seven per cent to RM53.7 million and its net profit fell by 3.7 per cent to RM13.5 million.
MEMS appointed a committee comprising independent directors to consider matters highlighted by the external auditors, including the mandate to hire a professional firm to carry out a special audit.
OSK believes there will be further selling pressure on the stock until its audited financial statements for 2007 are out.
MEMS has already said that it will not be able to meet the November 20 deadline for release of its audited results.
KPMG, when contacted, confirmed that it was MEMS' appointed auditors, but declined to comment due to client confidentiality.
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Moolah
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Posting #8: Wed Dec 5th, 2007 12:25 |
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More shocking stuff...
1. The Board of Directors of MEMS wishes to announce that Bursa Malaysia Securities Berhad has, via its letter dated 4 December 2007, rejected the Company’s application for an extension of time of 45 days from 30 November 2007 to submit its’ Audited Financial Statements for the financial year ended 31 July 2007.
2. The Board of Directors of MEMS (“Board”) wishes to announce that CIMB Investment Bank Berhad (“CIMB”) has on 5 December 2007 given the Company 2 months’ notice in writing of CIMB’s intention to resign as Sponsor. The reasons for resigning as Sponsor is because the Company did not accept the letter of appointment from CIMB within the stipulated timeframe as indicated in CIMB’s offer letter and following thereto, CIMB did not make another offer to the Company. The Board will endeavour to appoint a replacement Sponsor within the above notice period and make the relevant announcement upon appointment of the new Sponsor.
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Moolah
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Posting #9: Sat Dec 15th, 2007 04:10 |
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14-12-2007: Major MEMS Tech shareholder disposes of 1.8m shares
By Surin Murugiah
AKN Equity Ventures Sdn Bhd, a substantial shareholder of MEMS Technology Bhd which is being investigated by the Securities Commission for possible irregularities in its financial statements, has reduced its direct shareholding by selling 1.8 million shares or a 0.27% stake in the open market.
A filing with Bursa Malaysia on Dec 12 showed that after the disposals on Dec 7, 10 and 11, AKN Equity’s direct interest in the Mesdaq company was reduced to 126.9 million shares or 19.35%. The share price closed at 21, 20.5 and 20 sen respectively on the three days.
MEMS share price tumbled 16 sen or almost 45% on Nov 28 after the company told Bursa Malaysia it could not issue the audited accounts due to concerns over certain transactions.
Subsequently, the counter has been hovering between 19.5 sen and 21.5 sen with an average of 5.64 million shares traded daily.
On Nov 30, the company said it was not able to issue its audited financial statements for the financial year ended July 31, 2007 for public release, within the four months from close of the financial year, which falls on Nov 30.
”The board of directors of MEMS wishes to announce that the company is not able to issue its audited financial statements by Nov 30, 2007, as the company’s external auditors have expressed concerns over certain transactions relating to revenue and property plant and equipment.
”In light of the above, and after due deliberation, the board has resolved not to recognise revenue of RM19.72 million. As a result of this, the unaudited consolidated revenue for the financial year ended July 31, 2007 will be revised to RM53.7 million.
This will consequently result in the unaudited profit after tax for the financial year ended July 31, 2007 to be reduced from RM21.47 million as announced on Sept 27, 2007 to RM13.45 million,” it said.
Bursa Malaysia Securities on Dec 4 rejected the company’s application for an extension of 45 days from Nov 30, 2007 to submit its audited financial statements for the financial year ended July 31, 2007 (FY07).
Late last month, a SC spokesperson confirmed that the company was being investigated for possible irregularities in its financial statements.
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Moolah
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Posting #10: Thu Dec 27th, 2007 08:20 |
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27-12-2007: Bursa rejects MEMS Tech’s application for extension
KUALA LUMPUR: MEMS Technology Bhd said yesterday its application for an extension of 45 days from Dec 31, 2007 to finalise and issue its unaudited quarterly results for the financial period ended Oct 31, 2007 has been rejected by Bursa Malaysia Securities Bhd.
The company gave no other details. MEMS Tech had requested the extension as the special audit of its accounts was in the process of being finalised. Its independent audit committee had appointed external auditors Atarek Kamil Ibrahim & Co to conduct the audit.
MEMS TEch had previously applied for an extension of 45 days from Nov 30 to submit its accounts for the financial year ended July 31, 2007. However, that was also rejected by Bursa Securities.
The company has been unable to issue its audited financial statements for the 2007 financial year within four months from the close of the financial year. MEMS Tech has said its auditors had expressed concerns over certain transactions concerning revenue and property plant and equipment.
Following its board’s decision not to recognise revenue of RM19.72 million, its unaudited revenue for its 2007 financial year has been revised to RM53.7 million, leading to its unaudited net profit for the year being reduced from RM21.47 million to RM13.45 million.
The Securities Commission has started a probe into the company for possible irregularities in its financial statements.
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