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Highlights from Micro-Mechanics (Holdings) Ltd’s Latest Annual General Meeting

On 30 October 2017, Micro-Mechanics (Holdings) Ltd (SGX: 5DD) held its annual general meeting (AGM) for the financial year ended 30 June 2017 (FY2017).

Here are some highlights from the presentation slides that were shown during the AGM:

1. Micro-Mechanics was founded here in 1983 by Christopher Reid Borch, who is currently the chief executive officer. The company has since grown to boast a market capitalisation of close to S$300 million now.

2. The firm designs and manufactures high-precision tools and parts for the semiconductor industry. Many of them are consumables (an example of a consumable would be the ink cartridge for a printer).

3. Its factories are located in Singapore, Malaysia, Philippines, China, and the US.

4. The geometries of devices are getting smaller and smaller. Currently, requirements can go to 10 nanometers and below. To put the size into context, a human hair is 100,000 nanometres thick.

5. Due to the tiny size, the materials that are used to make the tools for its customers must be ESD-safe (ESD stands for electrostatic discharge) or else the chips will be “killed”.

6. Worldwide chip sales in August this year reached a record US$35 billion. Semiconductor sales for the eight-month period from January to August 2017 increased 20.5%, compared to the same timeframe last year.

7. The firm has a huge focus on transparency and good governance. It won three awards at the 18th Investors’ Choice Awards 2017, and they are Shareholder Communications Excellence Award (Small Cap), Singapore Corporate Governance Award (Small Cap) and Singapore Corporate Governance Award (Information Technology).

8. A quote from the presentation slides: “Transparency and good governance are more than just ticking boxes. Indeed, accurate, complete and timely information is the foundation for sound decision making – not just for investors – but for everyone at Micro-Mechanics from the board room to the shop floor”.

9. Dividend payment has grown from 0.8 Singapore cent per share in FY2003 to 8.0 cents in FY2017, bringing the total dividend payout since listing to 53.9 cents per share.

10. The dividend payout ratio for FY2017 was 75%, and the firm has a dividend policy of paying out not less than 40% of its earnings as dividends.

11. Pricing is an issue every day. Despite that, for FY2017, gross profit margin came in at 57.4%.

12. From the presentation slide: “Gross profit margin is one of the results that matters most – It reflects the value we help to create for our customers, and our ability to develop and deliver a cost-effective outcome”.

For FY2017’s earnings coverage, you can head here.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of Micro-Mechanics (Holdings) Ltd. Motley Fool Singapore contributor Sudhan P owns shares of Micro-Mechanics (Holdings) Ltd.