- Micro-Mechanics (SGX:5DD)’s 2QFY23 (Oct-Dec 2022) months ending Dec 2022) revenue came in at S$16.7m (-17% q-o-q, -18% y-o-y), which was below our expectations.
2QFY23 results below expectations
- - Read this at SGinvestors.io -
- difficulties faced by Micro-Mechanics’s China operations (Micro-Mechanics’s biggest market in recent years) due to COVID-19 related restrictions/lockdowns.
- - Read this at SGinvestors.io -
Margins at lowest point since 2015.
- Micro-Mechanics’s 2QFY23 gross margins declined to 45.2%, at a seven-year low since 2015. The decline in gross margins was due to
- significant decline in revenue contribution, which has resulted in the under-absorption of costs, as Micro-Mechanics’s cost structure is largely fixed in nature, amid
- continued inflationary pressure.
- 1HFY23 gross margins declined to 48.4% (versus 54.4% in 1HFY22), below management’s target of 50.0%.
- As a result, 2QFY23 EBIT and net profit margins dropped to 16.6% (versus 28.0% in 1QFY23) and 11.3% (versus 21.0% in 1QFY23), respectively. 1HFY23 net profit margin was at 16.6% (versus 23.3% in 1HFY22).
- On a positive note, despite moderating growth in 1HFY23, Micro-Mechanics has maintained its interim dividend at 6 cents (1HFY22: 6 cents) per share. See Micro Mechanics's Dividend History.
US subsidiary saw continued operating losses in 2QFY23.
- Read more at SGinvestors.io.
Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.
Elizabelle PANG DBS Group Research | Lee Keng LING DBS Research | https://www.dbs.com/insightsdirect/ 2023-01-31
Read also DBS's most recent report:
2023-05-02 Micro-Mechanics - Further Broad-Based Slowdown Ahead.
Price targets by other brokers at Micro Mechanics Target Prices.
Listing of research reports at Micro Mechanics Analyst Reports.
Relevant links:
Micro Mechanics Share Price History,
Micro Mechanics Announcements,
Micro Mechanics Dividends & Corporate Actions,
Micro Mechanics News Articles
