10 November 2011

M-MODE BERHAD (MMODE, 0059) - Q3 2011 :Keep Moving and Growing

M-MODE BERHAD (MMODE, 0059) Third Quarter Report comes out early yesterday night. What a surprise!! The new strategy implemented by the company look really work well. Firstly, let's see what is the comment from the company:

"The Group recorded an impressive increase in revenue as compared to the previous year's corresponding quarter from RM7,580,000 to RM17,610,000. whereas, the profits attributable to shareholders has increased by RM3,014,000 to RM3,913,000 as compared to previous year's corresponding quarter of RM899,000. The increase in revenue was mainly due to new strategic directions set by the Management in leveraging our strong execution capabilities and providing a wider premium portfolio of media assets to increase user' value and loyalty to our services."

"The Group's turnover Decreased by 21.0% as compared to the previous quarter. The Group's net profit before taxation for the current quarter under review has increased by 5.1% due to lower expenses incurred in this quarter. "

"The Board is expecting a challenging year ahead for the Technology, Media, Telecommunications ("TMT") industry. The Group is continuing to enrich and enhance quality of content libraries and media services in order to maintain its customer base and to meet subscriber’s demand. Besides that, the Group will continue to monitor closely its business development plan and revise accordingly to adapt to the changes of the industry. Barring any unforeseen circumstances, the Board expects the Group to have positive growth and continue to enjoy better future earnings in view of its continuous efforts in enhancing mobile media services and its venture into the "TMT" market."

Next, I must admit that I always have a doubt or two in the comments of a company. Guess what, it sometimes help me get away from big losses, but the cost is I may loss some opportunity to optimize my profit.

Some analysis of me:
Estimated PE in this fiscal year:
-Three quarter EPS is 6.78sen, let's assume the coming quarter EPS is 2.22sen, total one year got 9sen. With market price of RM0.40, PE will be 0.40/0.09 = 4.44.
-So, what is the reasonable PE MMODE supposedly should have? PE of 8?

Besides PE, we can go and see how many CASH and LOAN in the company. (Net Cash, actually)

In this quarter, around 80% of earning has been received: that is, EPS of 6.78sen, around 5sen has been received.
So, estimated dividend of 0.4*4 = 1.6sen in this fiscal year. This is based on previous record of 0.4sen when ESP was 2sen. So, with received CASH of 5sen, 1.6sen dividend should be no problem. (Or DY is 4% with buying price of RM0.40)

For future, it is still dependent on the business performance. Is the new business strategy can still grow the company profits in the future? The answer will be in next quarter report.
For more precisely, we can use (total cash)/(total number of share) to get how many cash per share.

Net Change in Cash & Cash Equivalents
6,407,000 or 4sen per share
Cash & Cash Equivalents at Beginning of Financial Period
11,739,000 or 7sen per shareWeighted average number of ordinary shares in issue

Total 11sen cash per share now, what company will do next in the final quarter report?
Paying all debt?
Term loan (Repayment more than 1 year)
Term Loan (Repayment less than 1 year)
Total loan: 3,204,000 or 2sen per shares.

So, after paying all loan, still got 9sen per share. What is the next?
The important thing is to know what we have bought instead of predicting how the price move.
 (Share share only, don't be too serious.)

I hold MMODE from its first impressive EPS result in the first quarter this year at buying price of 0.17 only. But before its second impressive result came out, I sold some of them to hedge the possible risk from unexpected future performance. Until now, all my MMODE is free of charge. So what is my next plan now. Yes, hold it until it is over-valued. Although my profit is relatively lower compared to if I simply hold MMODE from 0.17 to now (0.40), I never regret with this matter since I still monitor my portfolio according to my plan.

Future is unpredictable. Investment is a life long business. After learning from my first 200% profit from VIS investment, I believe the remainder free MMODE will help me to generate more profit in the future with peace of mind since all of them are FOC.

That's all for today. More fascinating articles and sharing will be updated from time to time in Xaivier Blog. So, you are welcome to subscribe our feed, look at our sitemap or simply visit our Homepage.

Written by: Xaivier Chia



navaneedh said...

Great thoughts you got there, believe I may possibly try just some of it throughout my daily life.

Group revenue management

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