Summary: No Buy
Business is probably too diversified with 7 dormant companies under mDR group. Business model and stiff competition hampers room for growth. Net profits (in '000) have been decreasing since 2013 (35,107 to 26,762) and do not pass the 3-year test. There's 65.1 bil shares (which severely dilutes the share price), yet the money raised still did not generate more profits for the company. EPS for the 12 months ended Dec 31 came in at 0.01 Singapore cent, from 0.032 cents in the previous year. The company also has difficulty meeting the minimum trading price of $0.20.
mDR is an after-market service provider for mobile phones and various consumer electronics products.
mDR Group's businesses include:
Annual Report 2018
Higher revenue for FY17 was primarily due to surge in other income, which trebled to $2.4 million on the back of interest earned from a loan extended to a third party. It is safe to assume net profits for FY17 is lower than that of FY16.
Revenue contribution from Distribution Management Solutions (“DMS”) division decreased by $9 million to $232.85 million. This was 4% lower than DMS’s FY2017 revenue of $241.76 million due to a decline in the distribution and retail sales of accessories, lower revenue from franchisee operations, prepaid cards sales, and handsets distribution.
Year-on-year revenue from After Market Solutions (“AMS”) division decreased by $1.8 million to $24.24 million, primarily due to lower repair volumes. This was 7% lower than AMS’s FY2017 revenue of $26.03 million.
Competition in the telco industry is expected to continue to intensify with the entry of the 4th operator, the various mobile virtual network operators and low barrier of entry.
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