Micro-Mechanics (Holdings) Ltd: Accelerating Our Journey to Excellence – Investor Report Highlights

Overview and Strategic Positioning

Micro-Mechanics (Holdings) Ltd, a leading supplier of high precision tools and parts for the semiconductor industry, presented a robust operational and financial update during its CGSI Retail Webinar on 12 February 2026. With a proven track record since its founding in 1983 and public listing in 2003, the Company boasts over 600 global customers and operates across five facilities in the USA, Singapore, Malaysia, China, and the Philippines.

Key Mission

Micro-Mechanics is purpose-driven, focusing on “Perfect Parts and Tools, On Time, Every Time” through scalable, repeatable, cost-effective, and data-driven processes. The business model targets both front-end (IDM, Foundry) and back-end (OSAT) semiconductor manufacturers, supporting applications from smartphones to automotive and industrial sectors.

Operational Updates: Building Resilience and Capacity

The Company continues to fortify its Five-Star Factory initiative, emphasizing excellence in core areas that underpin performance. Capital expenditure (CAPEX) is being strategically allocated to growth, notably in Advanced Packaging and Wafer Fab Equipment (WFE) manufacturing. A significant increase in CAPEX is expected, with S\$2.3 million earmarked for 2HFY2026, up from S\$799k in 1HFY2026.

• New Machine Investment: A new machine for WFE will be installed at the US plant in 1QFY2027 to boost machining quality and efficiency.
• China Expansion: Localized capabilities are being expanded to meet rising demand for consumable tools in China.
• Innovation: Physics-based programming technology is set to improve material removal rates by 10-30%, with implementation targeted for 2HFY2026.

Decentralised Customer Engagement

Micro-Mechanics has strengthened its decentralised structure, establishing dedicated teams for Taiwan and Arizona—regions seeing significant investments in Advanced Packaging and WFE. This move enables faster, more customized responses to customer needs, supporting geographical resilience and positioning the Group to capture high-value opportunities.

Human Capital and Workplace Excellence

The Company adopted “Performance Share Plan (PSP 2025)” to reward high-performing employees, reinforcing an ownership culture and aligning incentives with productivity. Upskilling and training are ongoing to master new industry techniques. Three of its five plants have received the “Five-Star 8S” rating for efficiency, cleanliness, safety, and environmental responsibility.

Financial Highlights: Strong Growth and Profitability

Micro-Mechanics reported stellar financial performance for 1HFY2026:

• Group Revenue: S\$35.4 million, up 8.7% yoy.
• EBITDA: S\$12.6 million (+13.7% yoy), with a margin of 35.6%.
• Net Profit: S\$6.9 million (+12.5% yoy).
• Cash and Bank Balances: S\$27.2 million, with zero borrowings.
• Return on Equity (ROE): 25.1%, indicating high capital efficiency.
• Dividend: 1HFY2026 interim dividend of 3.0 cents, payout ratio of 60.8%.
• Cumulative Dividend Per Share: 137.9 cents since listing; >700% shareholder returns.

Revenue Segmentation and Geographic Diversification

The Company’s revenue growth is led by consumable tools sales, which reached a 14-quarter high. WFE segment sales rebounded 27.2% qoq to S\$3.8 million in 2QFY2026, following recovery from material delays. Geographically, China, USA, Malaysia, and Singapore remain key markets, with China’s revenue up 23.7% yoy, reinforcing the Group’s resilience against geopolitical and supply chain risks.

Cash Flow and Balance Sheet Strength

Operating cash flow remains robust, demonstrating healthy working capital cycles. As of 31 December 2025, the Group had S\$27.2 million in cash, zero debt, and a net asset value per share increased to 37.82 cents. Inventory management is tight, with inventory at S\$3.7 million (5.3% of sales), and write-offs remain low.

Industry Outlook: Positive Sector Momentum

The global semiconductor industry is experiencing an upward revision in demand, particularly in Logic and Memory, driven by AI applications and data centre infrastructure. WSTS forecasts worldwide semiconductor revenue to hit US\$772 billion by end-2025 and US\$975 billion in 2026, a 26.3% yoy growth. Micro-Mechanics is strategically positioned to benefit from this upswing.

Strategic Priorities for FY2026

• Disciplined Capital Management: Maintaining positive operating and free cash flow, with strategic investments in growth areas.
• Advancing Five-Star Factory Initiative: Providing local support across all five factories, improving planning, streamlining manufacturing, and progressing towards the “Five-Star 8S” rating at all plants.
• Innovation: Fresh thinking and adoption of new technologies for product and process improvements.
• Good Governance: Foundation for long-term success.

Investment Highlights: Shareholder Value Drivers

• Favourable Industry Outlook: Riding the semiconductor recovery wave.
• Diversified Customer Base: Serving over 600 clients worldwide.
• Geopolitical Resilience: Decentralised operations and Singapore listing buffer against risks.
• High-Quality Earnings: Expanding gross profit margins and high ROE (>20%).
• Strong Total Shareholder Returns: TSR of over 3,000% since listing.

Potential Price-Sensitive and Shareholder Information

Key factors that may affect share values:

• Announcement of S\$2.3 million CAPEX for 2HFY2026, targeted at strategic growth areas and capacity expansion.
• Installation of new WFE machinery in the US plant expected in 1QFY2027, which could enhance efficiency and margins.
• Continued dividend payout with a high payout ratio and cumulative returns, supporting shareholder value.
• Strong financial position—zero debt, high cash reserves, and steady margin expansion.
• Positive industry outlook, with semiconductor sector forecasted to grow sharply in 2026.
• Innovative process improvements (physics-based programming) potentially boosting productivity by 10-30%.
• Geopolitical resilience through decentralised structure and localised capabilities, reducing risk exposure.

Conclusion

Micro-Mechanics (Holdings) Ltd is demonstrating a strong trajectory of growth, operational excellence, and shareholder value creation. The Company’s strategic investments, innovation initiatives, and sector tailwinds position it as an attractive investment opportunity as the semiconductor industry enters a new phase of expansion.

Disclaimer: This article is based on information provided in Micro-Mechanics (Holdings) Ltd’s 12 February 2026 CGSI Retail Webinar Presentation. It contains forward-looking statements subject to risks and uncertainties that may cause actual results to differ materially. Investors should not place undue reliance on these statements and are advised to conduct their own due diligence. The Company has no obligation to update any forward-looking statements.

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