MIKROMB (0112) - MIKRO MSC BERHAD - Company Visit on 31/5

MIKRO MSC BERHAD - Company Visit on 31/5

During this visit, we had a corporate presentation meeting with Managing Director, Mr. Yim Yuen Wah and Executive Director, Mr. Fong See Ni. Both of them are very nice in explaining and answering our questions.

MIKRO was involved in manufacturing of supporting (electronic) components for the distribution industry such as industrial, commercial, residential and transportation. Its hot selling product is protection relay and it had more than 50% market share in Malaysia. MRT1, KLIA2 and Bahrain F1 circuit are using its relay.

Big electricity users are compulsory to have a protection relay in their circuit, or else TNB will not be supplying them electricity. The lifespan of a relay is approximately 10 years.

Currently, MIKRO are mainly focusing in Vietnam market. It is also trying to go into other countries. However, it had not met any good dealers so far in Indonesia and Thailand. India’s import duty is very high and man power is an issue for them as well. Overall, it will not be easy to penetrate and to obtain a market share in those countries.

Mr. Yim mentioned that they had gone through up and down over the past 20 years especially when MIKRO was newly set up. During that time, even though they were giving free protection relay, nobody was interested to use. Reputation and branding are very important. They had started from nothing to something. After many years of efforts, MIKRO had finally grabbed over its main competitor, MH brand, shares in Malaysia market.

MIKRO has a higher profit margin as compared to others, because the research, design and manufacture are all done by themselves. Besides, they also provide after-sales service for their customers. It is a very important element to protect their reputation and maintain their customers. Almost all of its competitors do not have this service.

In term of currency risk, Mr. Yim mentioned that USD/MYR above 4 will be an ideal number and it will be benefiting the company.

Other than that, MIKRO’s MSC status will be expired on year 2017. If it cannot be renew, MIKRO will have to pay additional tax of MYR800k to MYR1m.

MIKRO is affected by the construction industry. When the construction sector had slowed down, normally MIKRO will take 2 to 3 years to see the effect of slow down as its relays are only installed at the end of the construction projects.

MIKRO had no intention to transfer to Main Market even though they had hit the requirement.

Before we end the visitation, Mr. Yim and Mr. Fong brought us to visit the manufacturing site. Overall, from my point of view, Mr. Yim is a very capable and confidence business man. He knows the company from A to Z. I would say that MIKRO is a gem in Ace Market.

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MIKROMB (0112) - MIKRO MSC BERHAD - Company Visit on 31/5