Posted by: donmihaihai | November 30, 2021

Micro Mechanics

The management has every reason to be proud. Micro Mech generated ROE and total shareholder return of > 15% pa since listed over 20 years ago. Shareholders are so lucky that the management was in the 40s then and I don’t think 60s is old. Managing is not a physical contest. While I do not have any data on my hand, this type of return is likely to put Micro Mech right at the top tier for over 20 years locally and globally and possible within top 20 of all SGX listed co. Over a longer period, almost all co. will hit a wall or something. I will really take my hat off to the current management team if they are able to generate 15% pa for 40 years. That will require getting the next management ready, take over and also mature.

I hope that the current management foots are still firmly on the ground. I believe overconfident, arrogance and complacent are the major diseases against long-term performance. Management proudly communicate achievements to shareholders is good. Overdo it might signal the diseases.

Micro Mech is quite a rarity. Honest, hardworking and look to have their own unique culture and good communication to investors. This is the Micro Mech that is firmly printed on my mind. And I think That Micro Mech has changed recent years. Mature might be the better word. I don’t know the exact point, but perhaps since the decision to refocus CMA on semicon critical parts, Micro Mech has become clearer and clearer on what are they building.

The management is clear on communicating on the landscape and the potential(industry with long runway) and how to win against other players( competitive advantage). Which is so un-SGX. I can count the number of companies with just one hand. I know quite a handful of SGX listed co. pretty well.  

But then, I don’t think I will be writing much about Micro Mech any time soon. It is like watching the story of a boring company in a fast-changing industry in a slow-motion movie. Thing might change in the near/mid future as the industry is setting up for a massive excess. Till then or when share price became sensible.

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