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Pleasant surprise for shareholders to be rewarded with an equivalent 1.5% yield of dividend shares. Few years ago the management made a tough decision to raise capital through private placement to diversify into SMBU business, which was not well received by the market that dropped the share price down to RM1, but also present huge opportunities for investors to accumulate at low prices. Turns out to be a brilliant decision as the SMBU now becomes a cash cow that provide stable recurring profit to complement the cyclical SEBU equipment business. In terms of PEG of less than 1 at current price, Mi remains a hidden gem for value investors due to being overlooked by institutions that largely prefers to promote Vitrox, Inari etc that is grossly inflated in comparison. I think Mi still has a huge upside and long runway with the SGX listing catalyst and potentials of the two new business ventures. Now that the management has a proven past track record of delivering SMBU, we can have more confidence in the company's VTBU and STBU investments.
One key point that makes the QR very positive is that its SEBU business is showing sign of turnaround with increasing revenue and profit this quarter. SEBU profit is considered high quality profit compared to profit from SMBU and foreign currency exchange. With positive future guidance of China economy reopening and new product launch from SEBU indicating growth is sustainable and possible valuation re-rating
