For QE30/6/2013, MPI reported a net profit of RM10.7 million- an improvement of nearly 5-fold over the immediate preceding quarter and a turnaround from a loss of 7.4 million in the same quarter last year. The improved bottom-line was achieved on the back of increased revenue which rose 14% q-o-q or 18% y-o-y to RM326 million. MPI's revenue for Asia, USA & Europe grew q-o-q by 26%, 5% & 3%. This plus favorable forex movement & cost control measures taken, led to higher profit.
Table: MPI's last 8 quarterly results
Chart 1: MPI's last 26 quarterly results
Outlook for the Tech sector
As noted before, it is not meaningful to look at MPI's PE multiple as the company has been in & out of the red for the past two years. I better indication of the 'cheapness' of this stock is that it is now trading at a Price to Book of only 0.7 time (based on its current price of RM2.48 & NTA p.s. of RM3.78 as at 30/6/2013).
MPI has resting at the strong support of RM2.40 for the past 18 months. This means that all the weak shareholders (or, those who lost heart in the stock) had sold off while new shareholders (probably the majority shareholder, Quek) have bought in or increased their stake in the company. This has been happening in a lean picking period (a period of either loss-making or meager profits) and it could be a prelude to a bumper harvest ahead.
Chart 2: MPI's weekly chart as at Sept 2, 2013 (Source: Quickcharts)
Based on the return to profitability & 'undemanding' valuation, MPI could be a good stock for a recovery play.
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, MPI.