MTQ Corporation

[asphodeli]

From July till now, MTQ has experienced a dip of nearly 40% from 1.57 till 1.04 today.

I did a study of their business and they are mainly engaging in the aftermarket business nature for the O & G industry. It is unlike the nature of the business for Rig and OSV builders as their business flavor really coincides with the oil price movement.

As I have always been involved in the aftermarket business in O & G, it is very recurring in nature and a lot of businesses are based on trust and long term relationship. This sharp dip in share price might be the works of the sellers based on sentiments.

Since every single O & G based machinery are still rotating and turning, regardless of the oil price, repair and refurbishment business at MTQ corp will still be coming in. Thus, it might be worthwhile to pick some shares on MTQs on the dips.

The above is just my 2 cents worth, look forward to comments.

Belg.

I have enjoyed the ride on MTQ since 2012 and divested in July this year when the valuation became excessive. With the substantial fall in share price, the price has started to look attractive to me again. Notwithstanding that, it is important to note that the Management has always been quite optimistic when it made forward looking statements but the tone of the guidance the Management gave in its latest (2Q15) financial statement was less optimistic.

1Q15
"The immediate outlook for the oil and gas industry still remains positive in the markets that the Group operates in, notably the Middle East. The Group remains committed to growing its oilfield
engineering and subsea services businesses and remains well poised to capitalise on opportunities moving ahead."

2Q15
"With significant new drilling assets poised to join the market, market sentiment is likely to remain muted. Notwithstanding this business environment, the Group will continue to drive efforts to
secure sales while looking to expand service offerings in new markets."

I have started to accumulate MTQ slowly as I believe in the Management's ability to grow the business after following this stock for the last two years. It is now trading at an extrapolated PER of 8.4, which is attractive to me.

The information provided by Belg has made me understand more of MTQ's competitive advantage.

MTQ may continue to experience price weakness in the short-term; hence, I am accumulating its shares slowly.

I actually picked up MTQ at around 70 cents during 2007, and sold off during recovery in 2009...Kicked myself for not being able to hold through the subprime crisis...This time, I'm keeping it around

Entire supply chain will be affected. It takes a lot of patience and conviction to go against the tide.

But a bear market is the best time to analyse and pick out the alpha stocks. I've met management and pretty impressed that he said he had not met expectations. Most people don't say that.

In a bull market even sh*t floats. In a bear market is where you can see who were swimming naked and you can point out the decent ones

Management needs to justify its high director fees as Stephen wrote...with that said however, it is true that when there's blood in the water, sharks come out to play

[specuvestor]

Entire supply chain will be affected. It takes a lot of patience and conviction to go against the tide.

In the short-term, when oil price falls, producing wells should continue to pump so long as the marginal market price of oil is above the marginal cash cost of production of those wells. Otherwise, those wells with marginal cash cost of production higher than the marginal market price of oil would simply shut down. The economics are quite simple, but would have to apply to individual oil and gas well. Of course, we must also remember that many oil and gas companies spread their risks over many wells by taking up fractional stakes in them, so if their overall finances remain ok, such companies will likely survive a major downturn.

Actually plugging a well is a big decision. Doing so is not just a view on the current oil price but a reflection of their view in the near future.

When times are bad, customers start to squeeze on pricing and margins. Thats why small caps usually suffer because they dont have bargaining power

Long term survival maybe but MOS drops significantly as ROIC collapses. But thats the nature of investing small cap. One can take their time assessing who has been swimming naked. People often forget that watching the show does not require tickets

[brattzz]

If i am Quah, i will wait for price to go down to 80++ cts and do a GO...
Settle this once and for all!

Unfortunately, he show a bit of hand by buying at $1.30... so oppss...

[Contrarian]

If delist the company, harder to borrow money.

[Bibi]

If delist the company, harder to borrow money.

Delist then wait few yrs. Change co name to QTM Corp then list at a premium again. Just like amtek.

[Contrarian]

> Delist then wait few yrs. Change co name to QTM Corp then list at a premium again. Just like amtek. Big Grin

Haha A Good One. Not all will play this game. Amtek is delisted and relisted by Private Equity Investors

[sykn]

Thanks to all of you for your sharing; I would not have taken notice otherwise. Decided to throw my hat into the ring at $1.04; pretty solid growth story, but I guess time will tell, especially now with the oil scare.

[brattzz]

go slow, figure it will go below $1 as the oil scare drags longer, at the same time take the Q reporting to see the impact to biz.

[sykn]

Thanks for the advice. I'm new to the O&G industry, so need to tread carefully. But if ever there was a good time for entry, I guess it's now when the valuations have come down a bit. But as always, the challenge is when to enter.

[CityFarmer]

I don't know the company well. I know it because of MW blog.

MW, do you still holding the stock? The company balance sheet remain healthy.

MTQ’s 3Q earnings fall 66% on lower contribution from Singapore business

SINGAPORE (Jan 30): MTQ Coporation said earnings were down 66% for the 3Q15 ended Dec 31, 2014 to $2.2 million or 1.43 cents a share against $6.4 million or 4.22 cents a year ago.

The group told SGX this evening that the lower earnings for the quarter was due to lower gross profit and margins recorded in the Oilfield Engineering business in Singapore and the inclusion of Binder's losses.

Quarterly revenue declined marginally to $74.9 million versus 3QFY14's $75.14 million.

However, the group said both Bahrain and Neptune recorded higher revenues and gross profits.

"Lower sales activities were recorded in all the Singapore businesses reflecting the impact of weaker market conditions. Notwithstanding the additional costs arising from the inclusion of Binder's results, overall operating costs as a percentage of revenue remained comparable to 3QFY2014," it explained.

While Bahrain maintained its momentum and delivered a stronger quarter, Neptune recorded higher operating expenses for the quarter which lowered its overall contributions, the group said.

The group maintained a strong financial position with higher cash balances and lower net debt gearing as at Dec 31, 2014. Cash flows from operations of $20.7 million for 9MFY15 boosted the group's cash balances to $44.0 million as at Dec 31, 2014 after further investments in the businesses, dividend payment and net repayment of borrowings which resulted in lowered the net debt gearing from 16.8% to 10.8%.

Kuah Boon Wee, Group Chief Executive Officer, expects the operating environment to remain subdued for the foreseeable future.

"Most of our customers are looking to reduce exploration expenditure and we are focused on capturing all available market opportunities. We will continue to watch our cost base with the imminent Neptune rationalisation an important part of that objective.

"The group is in strong financial shape with low gearing. We are well positioned to remain strong through current troughs and to look forward to the inevitable recovery," he added.

MTQ closed unchanged at $1.025, giving it a market capitalisation of $157.66 million.
http://www.theedgemarkets.com/sg/article...e-business