SCICOM (MSC) Bhd, an outsourcing firm, has proposed to move up to the main market from the ACE Market, to boost interest in its stock. It has met all the profit track record requirements for the transfer, which it expects to be done in the first quarter of 2010. Companies typically ask to move to the main market because certain big investors are prevented from buying stocks that are considered too small.
"The proposed transfer will enhance Scicom's credibility, standing and appeal among investors, especially institutional investors," Scicom said in a statement to Bursa Malaysia yesterday. Earlier, chief executive officer Leo Ariyanayakam said Scicom could sustain its growth for financial year ending June 30 2010. "We expect to increase our staff as we are now in the growth mode and plan to even expand our operations abroad," he told the media after the company's annual general meeting in Kuala Lumpur yesterday.
Scicom counts multinationals like handphone maker Nokia, budget carrier AirAsia and telecoms group Singapore Telecommunications as clients. Ariyanayakam said the company has been short listed for jobs worth millions of ringgit by several multinational corporation abroad but he did not want to elaborate. Scicom also reported its first quarter results yesterday. Its net profit for the quarter to September 30 2009 fell 29 per cent to RM2 million from a year ago, on revenue of RM31 million, which dropped 7.3 per cent.
The lower figures were mainly due to staff reduction in the US and unrealised losses on foreign exchange due to a strong ringgit. Scicom is confident of growing its earnings in fiscal 2010. "The main thrust for our business continues to be in the outsourcing sector with high value prospects in the pipeline which we expect to close within the financial year," Scicom said.
Simple observation: Good for the company. Might attract some interest on the stock. Nevertheless, stock looks expensive for an ACE stock with highish PER of mid teens. Borrowings minimal at half a million while cash is at RM4.7mil, balance sheet looks ok.
Shares issued: 265.3mil
Market Cap: RM114.1mil
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