Smart devices to drive MMS Ventures growth next year

MMS Group managing director T.K.Sia

GEORGE TOWN: MMS Ventures Bhd expects vision inspection equipment and LED testers for the automotive sector to drive its 2015 net profit.

Group managing director T.K. Sia told StarBiz that the group had delivered 30 units of high-margin equipment and testers in the first half of 2015, which is 10% more than the orders for the same period a year ago.

About 50% of the products were for the automotive sector, and the remainder for the consumer electronic and smart device segment.

“These are customised vision inspection and LED test equipment with a market value of about RM19mil, which will improve the net profit.

“For the second half of 2015, we have secured about RM10mil worth of orders from the automotive industry for vision inspection equipment and LED testers,” Sia said.

On the pricing of the group’s equipment, he said MMS was maintaining the selling price of two years ago of between US$100,000 and US$500,000, depending on the size and complexity of functions and features. The pricing is about 10% to 20% lower than branded vision inspection and LED test equipment.

Next year, the group expects the smart device segment to play a major role again in driving the company’s growth.

“Last year, the smart device segment was a key driver. We sold most of our vision inspection equipment for checking the flash lighting system used in smart devices.

“Because there are fewer models of smart devices being planned for release this year, the contribution from this segment will slow down.

“We expect this year to be flat against 2014 due to the slower sales of the smart device segment,” Sia said.

He said there are quite a number of new smart device models being planned for release in 2016. Their vision inspection and LED testers would be required to check the new generation of flash lighting system used in them, Sia said.

MMS sells its products to multinational corporations in Malaysia and in the US. On the impact of the weaker ringgit, Sia said the group imported about a fifth of the raw materials such as the customised motor control system from the US.

“We sourced the remainder such as metal parts, active and passive electronic components, and cables locally, which has seen little increase in prices.

“We sell 70% of the products in US dollars, which helps to offset the higher importation cost for the 20% of raw materials,” he said.

A recent report from the International Data Corporation Worldwide Quarterly Mobile Phone Tracker said smartphone shipments were expected to grow 11.3% in 2015 from 27.6% in 2014. It said while overall smartphone growth would continue to slow, many markets would experience robust growth in 2015 and beyond.