Asked on 09 Jun 2019
Super cheap stock (price-wise, trading at 0.001/0.002) with a 3-6% dividend yield. Seems like a turnaround story. Anyone else vested/have any opinions on this stock?
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:
Authorised distributor of mobile devices and accessories for brands like Huawei, LG, Nokia, Oppo, Samsung and Sony;
Key partner of telecommunications service providers, M1 and Singtel, through retail distribution networks under HandphoneShop and 3 Mobile respectively;
Distribution of Singtel prepaid cards and services in Singapore
Partner of Samsung branded retail concept stores in Singapore
Owner of HandPhoneShop.com, an e-commerce portal that offers the latest mobile devices, gadgets, and accessories
Provider of after-market services to end consumers for Samsung and Sony for equipment repairs and technical services in Singapore
Provision of digital inkjet printing for Point-Of-Sale and Out-Of Home advertising solutions in Malaysia
Authorised distributor of VT Cosmetics products
Possibility of entering property business
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.