Micro-Mechanics (Holdings) (5DD) AI Stock Analysis

• Market Cap: S$233.57M
• Dividend Yield: 3.73%
• Average Volume (3M): 84.50K
• Price to Earnings (P/E): 17.7
• Beta (1Y): 0.88
• Revenue Growth: 12.70%
• EPS Growth: 48.43%
• Country: SG
• Employees: 495
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.03
• Shares Outstanding: 139,031,890
• 10 Day Avg. Volume: 79,160
• 30 Day Avg. Volume: 84,500
• PEG Ratio: 0.33
• Price to Book (P/B): 4.58
• Price to Sales (P/S): 3.45
• P/FCF Ratio: 13.38
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 75 Outperform
• Price Target: S$2.00 ▲(23.46% Upside)

The score is driven primarily by strong financial quality (high margins, very low leverage, strong ROE, and robust cash conversion). Valuation is supportive with a reasonable P/E and a solid dividend yield. Technicals are moderately positive but not decisively strong, limiting upside conviction from momentum alone.

Positive Factors

High profitability and margins

Sustained ~50% gross and ~19% net margins signal durable pricing power and efficient cost control in precision tooling. High margins support reinvestment, R&D, and dividends, providing resilience through cycles if product quality and customer qualifications remain intact.

Very low leverage / strong balance sheet

Debt-to-equity around 3% offers material financial flexibility, enabling the company to sustain operations during semiconductor downturns, fund capex or tooling investments, and pursue shareholder returns without relying on costly external financing.

Robust cash generation and conversion

Strong OCF (2.1x net income) and FCF near net income indicate high earnings quality and cash-backed profitability. This durable cash generation supports capex for precision manufacturing, steadier dividends, and the ability to weather cyclical revenue dips.

Negative Factors

Cyclical demand and growth volatility

Business revenues and free cash flow have been uneven across semiconductor cycles, reducing predictability. Durable capital allocation and planning are harder when consumable demand swings with end-customer fab utilization and device-cycle timing.

Uneven top-line trajectory

The company’s revenue has experienced material year-to-year declines, reflecting sensitivity to customer production and capex patterns. Long-term growth relies on sustained end-market expansion or share gains, which can be slow during industry downcycles.

Exposure to semiconductor industry cycles

Revenue drivers are tied to semiconductor production volumes and capex; consumable replacement rates fall in downturns. Structural dependence on one industry elevates cyclicality risk and makes long-term growth contingent on industry investment cycles and technology transitions.

Micro-Mechanics (Holdings) Business Overview & Revenue Model

Company Description

Micro-Mechanics (Holdings) Ltd. designs, manufactures, and markets high precision parts and tools used in applications for the wafer-fabrication and assembly processes of the semiconductor industry. It operates through five segments: Singapore, Malaysia, The Philippines, USA, and China. The company offers die attach - pick-up products, such as rubber tips, high-temp plastic tools, tungsten carbide tools, sensor assemblies, and vacuum wand tools; die attach - dispensing products, including dispense nozzle adaptors, dispense nozzles, pen dispense assemblies, writing pen nozzle tips, and epoxy stamping tools; and die attach - die ejection products comprising ejector needles, needle holders/pepper pots, and needle holder seals. It also provides thermosonic bonding products that include clamps and electronic flame off products; ultrasonic bonding products comprising clamps, bearing base assemblies, anvils, and wire cutters; and encapsulation products consisting of BGA dispensing nozzles, dispensing manifolds, pump screws, and O-rings. In addition, the company manufactures precision parts and assemblies on a contract basis for OEMs. Micro-Mechanics (Holdings) Ltd. was founded in 1983 and is based in Singapore.

How the Company Makes Money

Micro-Mechanics generates revenue through the sale of its precision tools and equipment, which are essential in various stages of semiconductor manufacturing. The company's revenue model is primarily based on direct sales to customers in the semiconductor industry, allowing for high margins on specialized products. Key revenue streams include the sale of manufacturing equipment, maintenance services, and replacement parts. Additionally, the company benefits from long-term partnerships with leading semiconductor firms, which provide a steady demand for its products. The continuous growth of the semiconductor market, driven by advancements in technology and increasing demand for electronic devices, further contributes to Micro-Mechanics' earnings.

Micro-Mechanics (Holdings) Financial Statement Overview

Summary

Strong overall fundamentals supported by high profitability (about 50% gross margin and ~19% net margin in TTM), an excellent low-leverage balance sheet (debt-to-equity ~3%) and strong ROE (~25%), plus solid cash conversion (operating cash flow ~2.1x net income; free cash flow ~95% of net income). The main drag is cyclical volatility and uneven revenue/FCF growth history, including prior-year revenue declines.

Income Statement

Profitability remains strong in TTM (Trailing-Twelve-Months), with roughly 50% gross margin and ~19% net margin, indicating good pricing power and cost control. Margins have improved meaningfully versus FY2024, reflecting a rebound in earnings quality. The main weakness is the uneven top-line trajectory: revenue growth is modest in TTM and prior years show notable declines (FY2023–FY2024), which adds cyclicality risk despite solid current profitability.

Balance Sheet

The balance sheet is a clear strength: leverage is very low (debt-to-equity ~3% in TTM (Trailing-Twelve-Months)), providing significant financial flexibility and resilience through semiconductor cycles. Equity and assets have trended upward versus prior years, and return on equity is strong (~25% in TTM), signaling efficient capital use. The key watch-out is that strong returns are dependent on sustaining current profitability, which has fluctuated across the cycle.

Cash Flow

Cash generation is healthy: operating cash flow exceeds net income by ~2.1x in TTM (Trailing-Twelve-Months), and free cash flow is close to net income (~95%), suggesting earnings are well-supported by cash. Free cash flow is also solid in absolute terms, supporting reinvestment or shareholder returns. The main weakness is growth volatility—TTM free cash flow growth is slightly negative, and historical free cash flow growth has been choppy, consistent with a cyclical demand environment.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	65.21M	57.89M	67.02M	82.46M	73.73M
Gross Profit	32.22M	27.19M	31.19M	44.04M	40.02M
EBITDA	22.62M	18.23M	20.33M	32.24M	29.72M
Net Income	12.40M	8.04M	9.77M	19.81M	18.06M
Balance Sheet
Total Assets	60.84M	56.86M	58.19M	73.69M	72.33M
Cash, Cash Equivalents and Short-Term Investments	23.28M	16.57M	14.27M	20.37M	20.61M
Total Debt	2.06M	1.77M	2.20M	1.61M	2.49M
Total Liabilities	11.63M	10.79M	11.75M	15.39M	14.36M
Stockholders Equity	49.21M	46.07M	46.44M	58.30M	57.97M
Cash Flow
Free Cash Flow	16.83M	12.12M	14.36M	20.32M	18.92M
Operating Cash Flow	18.28M	14.58M	17.70M	25.22M	25.70M
Investing Cash Flow	-1.23M	-2.25M	-2.42M	-4.52M	-6.72M
Financing Cash Flow	-9.90M	-9.93M	-20.78M	-20.75M	-19.30M

Micro-Mechanics (Holdings) Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.62
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG:5DD, the sentiment is Positive. The current price of 1.62 is below the 20-day moving average (MA) of 1.63, below the 50-day MA of 1.63, and below the 200-day MA of 1.67, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 67.60 is Neutral, neither overbought nor oversold. The STOCH value of 76.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SG:5DD.

Micro-Mechanics (Holdings) Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5DD	75 Outperform	S$233.57M	17.67	24.01%	3.73%	12.70%	48.43%
558	69 Neutral	S$1.19B	28.57	9.60%	3.88%	1.24%	-10.12%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
MZH	56 Neutral	S$371.49M	28.50	3.50%	1.12%	22.66%	83.49%
AWX	52 Neutral	S$606.48M	43.68	2.87%	―	4.60%	―

Micro-Mechanics (Holdings) Corporate Events

Micro-Mechanics Highlights Strong Performance at 29th AGM

Micro-Mechanics (Holdings) Ltd. held its 29th Annual General Meeting, where the CEO and Senior Vice President of Finance presented updates on the company’s business operations and financial performance. The meeting highlighted the company’s achievements and consistent strong performance, particularly in manufacturing, operational efficiency, corporate governance, and transparency. The company also announced its 1QFY2026 financial results, which were released on the Singapore Exchange earlier that day.

The most recent analyst rating on (SG:5DD) stock is a Buy with a S$2.00 price target. To see the full list of analyst forecasts on Micro-Mechanics (Holdings) stock, see the SG:5DD Stock Forecast page.

Micro-Mechanics Discusses Strategic Initiatives at EGM

At the Extraordinary General Meeting, Micro-Mechanics discussed a proposed share buy-back plan and the implementation of the Performance Share Plan 2025. The Board emphasized their commitment to balancing shareholder interests and long-term strategic goals, while the CEO explained the PSP’s aim to align employee incentives with business performance metrics to enhance ownership and engagement.

The most recent analyst rating on (SG:5DD) stock is a Buy with a S$2.00 price target. To see the full list of analyst forecasts on Micro-Mechanics (Holdings) stock, see the SG:5DD Stock Forecast page.

Micro-Mechanics Wins Shareholder Communications Excellence Award

Micro-Mechanics (Holdings) Ltd., a Singapore-based company, has been recognized as a Joint Winner in the Small-Cap category for the Shareholder Communications Excellence Award at the SIAS Investors’ Choice Awards 2025. This accolade highlights the company’s commitment to strong corporate governance, transparency, and effective shareholder communication, as well as its dedication to enhancing shareholder returns through initiatives like the Five-Star Factory. This marks the sixth recognition by SIAS, further solidifying Micro-Mechanics’ reputation for exemplary investor relations and governance practices.

The most recent analyst rating on (SG:5DD) stock is a Buy with a S$2.00 price target. To see the full list of analyst forecasts on Micro-Mechanics (Holdings) stock, see the SG:5DD Stock Forecast page.