As an initiative to raise the quality of AGMs, The Securities Investors Association of Singapore (SIAS) has engaged a team of analysts to research listed companies' annual reports and come up with questions that should be raised during their AGMs. The questions for Manufacturing Integration Technology (MIT) are:   

KwongKimMoneKwong Kim Mone, non-executive chairman, founded MIT in 1992.1. The 2018 annual report has been titled “A new beginning… Automating the future” to reflect the divestment of the semiconductor equipment business on 20 February 2019 and the shifting of its business focus on contract equipment manufacturing (“CEM”) and customised automation.

The CEM segment grew 52% from the previous year’s $18.7m driven mainly by new customised automation projects and improved Built-To-Print (BTP) orders, particularly in the semiconductor and LED markets.


(i) Other than semiconductor and LED (and perhaps garment), how well established/connected is the group in the other industries where it is aiming to serve, namely medical, consumer electronics, storage media, automotive and mobile devices?

(ii) What is the strategy to acquire new customers?

(iii) What are some of the opportunities or low hanging fruits in the next 18-24 months?

(iv) Has the board set a target for management in terms of the pace of growth for the CEM business? What would be the targeted level of sales, scale of operations and customer base in 5 years’ time?

For distribution to shareholders: S$77 m net proceeds from disposal of semicon subsidiary in Feb 2019

15.5 c/share

Paid on 12 Apr 2019

8.5 c/share

Expected in a few months’ time

3.5 c/share*

Expected in a few months’ time

3.5 c/share*

By Aug 2020

Total: 31 c/share

 

*Actual amount may vary according to fulfilment of certain sale & purchase terms & conditions.
NextInsight compilation.

2. The group is carrying out a capital reduction which will involve a cash distribution of 8.5 cents per share for each share held by shareholders. Following the distribution, the group would still have excess of S$12 million cash as at 31 December 2018 to fund the CEM business.

The group, through the newly renamed Automated Manufacturing Solutions Pte Ltd ("AMS"), has also leased an additional 15,000 square feet space in an adjacent factory to aggressively beef up and operationalise its engineering capabilities in anticipation of new orders.

(i) Can management help shareholders understand the level of capital expenditure required to scale up the business?

(ii) What was the utilisation rate of the plants in Shanghai and in Singapore?

(iii) Will the group be announcing its order wins to help shareholders understand the progress made in growing the business?



LimChinTong4.19Lim Chin Tong, CEO. NextInsight photo3. As announced by the company, Mr Lim Chin Tong has been re-designated as executive director and chief executive officer after serving as executive director since 15 August 2007 (page 4). The profiles of the key executive team members are shown on page 6 of the annual report.

(i) Is management still looking to add to its team to further bolster its CEM business?

(ii) Has the board reviewed if the group has the necessary human talent in place, especially in business development and technical expertise, to meet its objectives?

(iii) How much of the experienced staff remains with the group after the disposal? Does the group already have a core team to scale up its CEM operations?

The SIAS questions can be found here.

P/S: On 25 April, MIT posted its replies to the above questions on the SGX website.


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