MTQ Corporation

[CityFarmer]

Profit guidance of the company for a loss making quarter...

(not vested)
-------------
The board of directors (the “Board”) of MTQ Corporation Limited (the “Company”, together
with its subsidiaries, the “Group”) wishes to advise shareholders, investors and potential
investors that, based on the preliminary assessment of the information available to the Board
including the unaudited management accounts of the Group and prevailing market
conditions of the industries the Group operates in, the Group is likely to incur goodwill
impairment charges with respect to the Engine Systems and Binder Engineering operations
in Australia in the last quarter of the financial year ended 31 March 2015 (“FY2015”).
The goodwill impairment charges will result in a loss making fourth quarter of FY2015.
Nonetheless, the Group is expected to be profitable for FY2015.
...
http://infopub.sgx.com/FileOpen/MTQ_Prof...eID=340512

[greengiraffe]

Noone will be spared under such a big climate... no surprises here...

Profit guidance of the company for a loss making quarter...

(not vested)
-------------
The board of directors (the “Board”) of MTQ Corporation Limited (the “Company”, together
with its subsidiaries, the “Group”) wishes to advise shareholders, investors and potential
investors that, based on the preliminary assessment of the information available to the Board
including the unaudited management accounts of the Group and prevailing market
conditions of the industries the Group operates in, the Group is likely to incur goodwill
impairment charges with respect to the Engine Systems and Binder Engineering operations
in Australia in the last quarter of the financial year ended 31 March 2015 (“FY2015”).
The goodwill impairment charges will result in a loss making fourth quarter of FY2015.
Nonetheless, the Group is expected to be profitable for FY2015.
...
http://infopub.sgx.com/FileOpen/MTQ_Prof...eID=340512

[asphodeli]

They've always given profit warning well in advance IIRC, unlike other companies. Current ratio remains stable at 2.31. Hopefully they can ride out the storm once again

[lilvestor]

Back to 76c today, years of gains erased in a matter of months... and you wonder why many people are sceptical about long term investing.

Vested, odd lots, should have sold this for a 200% gain when I had the chance... yes I know its easy to say this in hindsight.

[Tiggerbee]

Back to 76c today, years of gains erased in a matter of months... and you wonder why many people are sceptical about long term investing.

Vested, odd lots, should have sold this for a 200% gain when I had the chance... yes I know its easy to say this in hindsight.

The stock price of MTQ had a CAGR of over 13%. MTQ was super over bought way beyond its fair value when it reached its previous peak back in June 2014. After the steep correction, it's now in the super oversold region. But it might retrace further to 70-74c and even to as low as 55-60c if it corrects to an equivalent valuation level as the GFC.

If MTQ do retrace to about 60c, it will indeed be a great bargain.

[CY09]

If you had bought MTQ in 2 April 2010 at 78 cents, the current worth of your shares is $1.14 (after adjusting for the 2 rounds of bonus) and ignoring the extra dividends from your bonus share, you would have collected 20 cents of dividends. MTQ's CAGR is 11.4% for the past 5 years even taking into the account the recent share price rout, while the STI Index has not even delivered 8%. Even the star performers in the STI index like DBS delivered less than 11% CAGR!

<top 10 watchlist but not vested>

[lilvestor]

If you had bought MTQ in 2 April 2010 at 78 cents, the current worth of your shares is $1.14 (after adjusting for the 2 rounds of bonus) and ignoring the extra dividends from your bonus share, you would have collected 20 cents of dividends. MTQ's CAGR is 11.4% for the past 5 years even taking into the account the recent share price rout, while the STI Index has not even delivered 8%. Even the star performers in the STI index like DBS delivered less than 11% CAGR!

<top 10 watchlist but not vested>

Don't get me wrong, I wasn't complaining about the 5yr CAGR of MTQ, my point was that I should have sold this when the market grossly overvalued this stock, but I obviously didn't because I was planning to hold on to this "forever". Hence the view that long term investing seems pointless to me, God knows when I will be able to sell this for that kind of returns again, probably never I think.

Btw 11% CAGR is excellent for a blue chip like DBS, most people have large cap blue chips in their portfolio for stability/dividends, not growth.

[CY09]

Hi lilvestor,

yup quite true, one camp of investors will argue we should buy when it is undervalued and sell when it is overvalued. This is correct. However, there is another camp who will argue to hold on to a company for a very long time if it is a well manged company.

Both sides are right, I wonder which camp will one subscribe to.

[greengiraffe]

Back to 76c today, years of gains erased in a matter of months... and you wonder why many people are sceptical about long term investing.

Vested, odd lots, should have sold this for a 200% gain when I had the chance... yes I know its easy to say this in hindsight.

Maybe you have chosen wrong counter as long term investments. For cyclical counters, the long term investing model must have caveats.

For essential services like Telcos for example, long term investing may have more merits as earnings are more predictable but growth is less exciting...

GG

[Jacmar]

Hi lilvestor,

yup quite true, one camp of investors will argue we should buy when it is undervalued and sell when it is overvalued. This is correct. However, there is another camp who will argue to hold on to a company for a very long time if it is a well manged company.

Both sides are right, I wonder which camp will one subscribe to.

Both sides cannot be right. one of the sell reason is when the fundamentals has changed. Clearly the fundamental for MTQ has changed with the collapse of the oil price. no matter how great the mgt is, you cannot outperform the business environment. what is seemingly under valued can get cheaper till the full impact of the poor business fundamental is reflected in the share price.