Written by Leong Chan Teik

SOME INVESTORS take leave from work in order to attend AGMs where, instead of gorging on the food served after the event, they go up to the management and seek to understand the company’s business better – and its prospects.

One such investor is Royston Yang, a finance manager, who turned up at MTQ Corporation’s AGM last Friday. He spoke with Mr Kuah Kok Kim, the chairman of MTQ, and William Fong, the Group Financial Controller.

Here are some notes from Royston, and they pertain largely to MTQ’s current construction of a US$20m facility in Bahrain to service oilfield equipment – an ambitious project that is 3X the size of MTQ’s operations in Singapore.

And here are parts of the Q&A at the AGM:

Q: Although I have been holding the stock for umpteen years, this is my first attendance at the company AGM. Congrats on a good job. The company is stable. As you know, there are opportunities in Australia which is booming. May I know what you intend to do to exploit this potential?

Mr Kuah: We fully agree with you that Australia has a lot to offer to us to expand our business. We are actively looking into possibilities to take advantage of the buoyant economy. Having said this, business is not lying on the street waiting for us to pick it up. We also have to be careful and selective. As you can see from the records, we have had significant success in Australia in past years.

Q: Regarding the recently acquired distribution business involving Bosch products in the Australian car aftermarket, I am worried about over-stocking and the time spent on this business. Is it wise to develop this business instead of the oilfield engineering business which has greater potential?

L-R: CEO Kuah Boon Wee, Chairman Kuah Kok Kim, Group Financial Controller William Fong. Photo by Leong Chan Teik

Mr Kuah: We have an ongoing business in Australia, and any additional things that could be pushed through our existing infrastructure there – our branches, our IT systems – would be a big plus to us. Bosch, in particular, is very keen, it is a very reputable company – we view our relationship with Bosch will be very beneficial to us in the long run.

Regarding the risk of overstocking, my answer to you is, you have to have faith and confidence in the management. We are conscious of these issues.

Q: I think MTQ stock is under-valued and illiquid – I think it’s because of not enough financial public relations. I hope you can look into it so more people know about the business and the stock price can go up.

Mr Kuah: Share prices are a function of the market. What we can do is to keep the market as informed as we can: We announce our results promptly, we send newsletters to shareholders and we do have financial public relations. At the end of the day, people decide if they want to buy or sell our shares. We can’t go out and talk up the shares. If we don’t have news this week or next week, we don’t have news. If we have, we announce it promptly.

Q Do you have a dividend policy? Is a certain percentage of profit meant to be declared as dividends?

Mr Kuah: In past few years, our dividend payment has been fairly stable. We don’t have a policy cast in stone as we are mindful that the company has to cater for expansion. Directors are conscious of the fact we have to pay dividends to reward shareholders but we will do so in a manner that will not jeopardize the smooth running of the business. We also like some spare capacity to take advantage of opportunities when these appear.