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Last week, XMH Holdings has been buying back its shares, the first time in nearly four years.
XMH -- which is 18.8% owned by Koh Boon Hwee-backed private equity fund Credence Capital -- bought back 526,000 shares (see table).
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XMH's FY2018 (ended April 2018) saw a net loss of $3.5 million, the second consecutive annual loss.
But could XMH have bottomed out? The share buybacks appear to signal that, as well as reflect the big discount that the stock trades vis-a-vis its 55.4-cent net asset value.
The NAV, in turn, is based on the historical cost of the company's Tuas HQ building, whose market value is substantially higher at around S$80 million, according to an external valuation.
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S$’000 |
FY18 |
FY17 |
Change |
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Revenue |
72,886 |
90,151 |
(19.2) |
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Gross profit |
17,814 |
21,794 |
(18.3) |
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Gross profit margin |
24.4% |
24.2% |
0.2pp |
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Net loss |
(3,469) |
(1,071) |
N.M. |
In addition, the management sounded upbeat, citing:
♦ An increase in customer enquiries, and S$30 million in orders secured in the past four months from several sectors such as utilities, data centres, marine vessels and industrials.
The majority of these orders is expected to be fulfilled in FY19. XMH did not disclose its total orderbook, saying that would be available in its upcoming annual report.
♦ A jump in inventories from S$26.9 million as at end-Jan 2018 to S$33.3 million as at end-April 2018.
♦ The setting up of branches and employment of new staff in Indonesia to capture a potential return of business in its engine distribution segment.
 Elvin Tan, executive chairman & CEO, XMH Holdings: He owns 40.3% of XMH. NextInsight file photo"We believe that there is a gradual pickup in industry sentiment, which is reflected in our recent order wins," said executive chairman Elvin Tan."Overall, opportunities are beginning to present themselves in new and existing markets for the Group and we will put our best foot forward to convert these opportunities into tangible results.” |
For an idea of the marine engines that XMH distributes, watch this video -->